Legislature(2015 - 2016)SENATE FINANCE 532

03/17/2016 09:00 AM FINANCE

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Heard & Held
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Heard & Held
-- Public Testimony --
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Heard & Held
SENATE BILL NO. 170                                                                                                           
     "An   Act  authorizing   the   Department  of   Natural                                                                    
     Resources,  division  of   geological  and  geophysical                                                                    
     surveys,  to collect  fees  for facilities,  equipment,                                                                    
     products,  and  services;  relating to  accounting  for                                                                    
     certain   program  receipts;   and  providing   for  an                                                                    
     effective date."                                                                                                           
9:07:26 AM                                                                                                                    
SENATOR CATHY GIESSEL, SPONSOR,  explained that SB 170 would                                                                    
make  the Department  of Natural  Resources (DNR)  a greater                                                                    
revenue generator.  She presented a  core from an  oil field                                                                    
drill.  She explained  that the  Geological Material  Center                                                                    
(GMC) had been  located for several decades  in Eagle River,                                                                    
where materials  had been stored in  conexes (unheated metal                                                                    
containers)  and  had been  exposed  to  cold and  moisture,                                                                    
causing deterioration.  She relayed that DNR  had bought the                                                                    
Sam's  Club   building  in   East  Anchorage   from  Walmart                                                                    
Corporation several  years ago,  and that the  structure had                                                                    
been  reconfigured as  the  Geologic  Materials Center.  She                                                                    
said that  the library  of rocks  contained in  the building                                                                    
could  generate  revenue  because  it  was  of  interest  to                                                                    
exploders. She  referred to the  document, "FAQs  related to                                                                    
Senate  Bill 170"(copy  on file).  The document  contained a                                                                    
statement from Repsol,  and the role of the  center in their                                                                    
recent  discovery  on  the  Colville   Delta;  the  GMC  had                                                                    
facilitated in  the discovery and  exploration of  the area,                                                                    
possibly  the largest  oil  field  discovered since  Prudhoe                                                                    
Bay.  She  related  that  DNR currently  did  not  have  the                                                                    
authority to charge for use  of their facility, the bill was                                                                    
intended to establish that authority.                                                                                           
9:10:39 AM                                                                                                                    
Co-Chair MacKinnon looked at Page  1, lines 11 and 13, which                                                                    
spoke  to  the  printing  and publication  of  reports.  She                                                                    
wondered whether  the figure was antiquated,  or had digital                                                                    
imaging been  explored as an  alternative to  publishing and                                                                    
printing hard copies.                                                                                                           
Senator  Giessel  replied that  all  of  the materials  were                                                                    
available  to view  online, but  that most  people liked  to                                                                    
work from actual paper copy maps.                                                                                               
9:11:36 AM                                                                                                                    
AKIS GIALOPSOS, STAFF, SENATOR  CATHY GIESSEL, discussed the                                                                    
Sectional Analysis (copy on file):                                                                                              
     *Section  1.  Provides  that   fees  collected  by  the                                                                    
     Department of  Natural Resources (department)  under AS                                                                    
     41.08.045, added  by bill section 3,  will be accounted                                                                    
     for separately and that  appropriations from these fees                                                                    
     are not made from the unrestricted general fund.                                                                           
     *Section 2.  Conforms AS 41.08.030 to  the changes made                                                                    
     to AS 41.08 by section 3 of the bill.                                                                                      
     *Section 3. Adds  a new section to  AS 41.08 permitting                                                                    
     the   department's    division   of    geological   and                                                                    
     geophysical  surveys to  charge  and  collect fees  for                                                                    
     facilities, equipment,  products, or services  that the                                                                    
     division offers. Institutes a fee waiver for students                                                                      
     using the facilities, equipment, products or services                                                                      
     for educational purposes.                                                                                                  
     *Section 4. Amend uncodified law to permit the                                                                             
     department to adopt regulations necessary to implement                                                                     
     changes made by the Act.                                                                                                   
    *Section 5. Makes section 4 effective immediately.                                                                          
     *Section 6. Gives sections 1-3 an effective date of                                                                        
     July 1, 2016.                                                                                                              
9:14:07 AM                                                                                                                    
Senator Bishop  wondered how the department  would arrive at                                                                    
a fee schedule.                                                                                                                 
9:14:31 AM                                                                                                                    
STEVE  MASTERMAN,  DIRECTOR,   DIVISION  OF  GEOLOGICAL  AND                                                                    
GEOPHYSICAL   SURVEYS,  DEPARTMENT   OF  NATURAL   RESOURCES                                                                    
FAIRBANKS   (via  teleconference),   stated  that   the  fee                                                                    
schedule  was currently  under evaluation  and  would be  an                                                                    
amalgam  of fees  charges in  other states.  He stated  that                                                                    
they  did not  want to  discourage use  by setting  fees too                                                                    
9:15:56 AM                                                                                                                    
Senator Giessel looked at Page  4 of the aforementioned fact                                                                    
sheet,  which  reflected  a   bar  graph  illustrating  core                                                                    
repository service fees in other states.                                                                                        
9:16:22 AM                                                                                                                    
Co-Chair MacKinnon  wondered why  the word "shall"  had been                                                                    
used instead of "may" on Page 2, line 25 of the bill.                                                                           
Mr. Gialopsos  responded that the  division had  intended to                                                                    
promulgate  regulations to  do the  waiver for  students. He                                                                    
furthered  that the  statutory  regulation  was intended  to                                                                    
ensure  that students  using the  facilities would  still be                                                                    
able to do so, without  the danger of regulations rescinding                                                                    
9:17:26 AM                                                                                                                    
Vice-Chair  Micciche commented  that  industry would  offset                                                                    
the cost of running the  facility, and that the language was                                                                    
in  no  way meant  to  discourage  students from  using  the                                                                    
9:17:52 AM                                                                                                                    
Co-Chair MacKinnon  wondered what  would keep  industry from                                                                    
using students  or interns  in order  to bypass  paying fees                                                                    
for facility use.                                                                                                               
Senator Giessel looked at page  2 of the facts document, and                                                                    
pointed out that public school  groups constituted only 5 to                                                                    
10 percent of the annual  visitors to the facility. She said                                                                    
that  the intention  had that  elementary, junior  high, and                                                                    
high school  classes that might be  interested in geological                                                                    
careers would  be able to  visit the facility at  no charge.                                                                    
She spoke  to Co-Chair  MacKinnon's concern  that "students"                                                                    
was a  broad term,  but she believed  that the  division was                                                                    
clear on  the intent  of the sponsor.  She trusted  that the                                                                    
level of  student that  would be allowed  to enter  for free                                                                    
would be clearly defined in regulation.                                                                                         
Co-Chair  MacKinnon understood  that Senator  Giessel viewed                                                                    
university  students  and  academics  differently  than  the                                                                    
student intended under the waiver.                                                                                              
Senator Giessel replied that that  had been the intention of                                                                    
the Senate Resources Committee.                                                                                                 
9:19:43 AM                                                                                                                    
Co-Chair MacKinnon  though that  the language could  be more                                                                    
9:20:08 AM                                                                                                                    
Vice-Chair  Micciche  felt  that  an  intern  working  under                                                                    
contract  with  an  industry party  would  have  their  fees                                                                    
covered  by the  industry  employer. He  specified that  his                                                                    
intent had  been that  the facility  would be  available for                                                                    
free  to individual  students who  were interested  in doing                                                                    
research in the facility.                                                                                                       
9:20:51 AM                                                                                                                    
Senator  Olson queried  that amount  of anticipated  revenue                                                                    
from the facility.                                                                                                              
Senator Giessel deferred to Mr. Masterman.                                                                                      
9:21:15 AM                                                                                                                    
Co-Chair  MacKinnon  directed  committee  attention  to  the                                                                    
fiscal note,  which reflected that  revenue was  expected to                                                                    
increase as usage grew; up to $485 thousand by FY 22.                                                                           
9:21:54 AM                                                                                                                    
Mr.  Masterman interjected  that the  fiscal note  contained                                                                    
estimates that were  based on the past history  of usage and                                                                    
new services  that the  facility planned  to offer.  He said                                                                    
that  the picture  would become  clearer after  the facility                                                                    
began charging revenue.                                                                                                         
9:22:44 AM                                                                                                                    
Senator Bishop offered support for the legislation.                                                                             
9:23:28 AM                                                                                                                    
Vice-Chair   Micciche  wondered   whether  the   members  of                                                                    
industry  could  obtain  electronic seismic  data  from  the                                                                    
Mr. Masterman replied  in the affirmative. He  said that the                                                                    
intent was  to work  with the division  to make  the seismic                                                                    
surveys available through the GMC.                                                                                              
9:24:12 AM                                                                                                                    
Vice-Chair  Micciche  asked whether  it  would  be the  most                                                                    
valuable data at the center.                                                                                                    
Mr. Masterman replied  that it was a  possibility, and there                                                                    
was a  hope that such  valuable information would  provide a                                                                    
significant revenue stream for the facility.                                                                                    
9:24:59 AM                                                                                                                    
Co-Chair  MacKinnon  wondered   why  there  the  anticipated                                                                    
revenue  did  not result  in  a  corresponding drop  in  the                                                                    
General Funds reflected in the fiscal note.                                                                                     
Mr. Masterman responded  that at this point  the revenue was                                                                    
intended  to bring  the building  into  the public  building                                                                    
fund,  which had  an  entry level  threshold.  He said  that                                                                    
until the  GMC revenue  reached the  threshold to  enter the                                                                    
fund, the revenue generate would  enter the General Fund. He                                                                    
believed that the fiscal note offered further explanation.                                                                      
Co-Chair MacKinnon OPENED public testimony.                                                                                     
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
9:27:32 AM                                                                                                                    
AT EASE                                                                                                                         
9:29:48 AM                                                                                                                    
SB  170  was  HEARD  and   HELD  in  committee  for  further                                                                    

Document Name Date/Time Subjects
SB 101 Briefing Paper.pdf SFIN 3/17/2016 9:00:00 AM
SB 101
SB 101 Transmittal Letter.pdf SFIN 3/17/2016 9:00:00 AM
SB 101
SB0170-Explanation of Changes-Version A to Version W.pdf SFIN 3/17/2016 9:00:00 AM
SB 170
SB0170-Sectional Analysis-Version W.pdf SFIN 3/17/2016 9:00:00 AM
SB 170
SB0170-Sponsor Statement.pdf SFIN 3/17/2016 9:00:00 AM
SB 170
SB0170-Supporting Document-FAQs from DNR-DGGS.pdf SFIN 3/17/2016 9:00:00 AM
SB 170
SB0170-Supporting Document-Letter-DNR-DGGS.pdf SFIN 3/17/2016 9:00:00 AM
SB 170