Legislature(2021 - 2022)BARNES 124
04/12/2022 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB167 | |
| HB349 | |
| HB402 | |
| HB411 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 167 | TELECONFERENCED | |
| *+ | HB 349 | TELECONFERENCED | |
| *+ | HB 402 | TELECONFERENCED | |
| *+ | HB 411 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
April 12, 2022
8:05 a.m.
MEMBERS PRESENT
Representative Sara Hannan, Co-Chair
Representative Calvin Schrage, Co-Chair (via teleconference)
Representative Harriet Drummond
Representative Mike Prax
Representative Ken McCarty
Representative Kevin McCabe
MEMBERS ABSENT
Representative Josiah Patkotak, Vice Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 167
"An Act relating to specie as legal tender in the state; and
relating to borough and city sales and use taxes on specie."
- HEARD & HELD
HOUSE BILL NO. 349
"An Act relating to the establishment of oil and gas drilling
units and patterns."
- HEARD & HELD
HOUSE BILL NO. 402
"An Act relating to identification requirements for contractors
and home inspectors."
- HEARD & HELD
HOUSE BILL NO. 411
"An Act relating to municipal tax exemptions and deferrals on
economic development property."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 167
SHORT TITLE: GOLD AND SILVER SPECIE AS LEGAL TENDER
SPONSOR(s): REPRESENTATIVE(s) MCCABE
04/09/21 (H) READ THE FIRST TIME - REFERRALS
04/09/21 (H) CRA, STA, FIN
03/29/22 (H) CRA AT 8:00 AM BARNES 124
03/29/22 (H) -- MEETING CANCELED --
04/05/22 (H) CRA AT 8:00 AM BARNES 124
04/05/22 (H) -- MEETING CANCELED --
04/12/22 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 349
SHORT TITLE: HEARING ESTABLISH DRILLING UNITS/SPACING
SPONSOR(s): REPRESENTATIVE(s) RAUSCHER
02/22/22 (H) READ THE FIRST TIME - REFERRALS
02/22/22 (H) CRA, RES
03/29/22 (H) CRA AT 8:00 AM BARNES 124
03/29/22 (H) -- MEETING CANCELED --
04/05/22 (H) CRA AT 8:00 AM BARNES 124
04/05/22 (H) -- MEETING CANCELED --
04/07/22 (H) CRA AT 8:00 AM BARNES 124
04/07/22 (H) -- MEETING CANCELED --
04/12/22 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 402
SHORT TITLE: IDENTIFICATION OF CONTRACTOR IN ADS
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
03/18/22 (H) READ THE FIRST TIME - REFERRALS
03/18/22 (H) CRA, L&C
03/29/22 (H) CRA AT 8:00 AM BARNES 124
03/29/22 (H) -- MEETING CANCELED --
04/05/22 (H) CRA AT 8:00 AM BARNES 124
04/05/22 (H) -- MEETING CANCELED --
04/07/22 (H) CRA AT 8:00 AM BARNES 124
04/07/22 (H) -- MEETING CANCELED --
04/12/22 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 411
SHORT TITLE: MUNICIPAL TAX EXEMPTIONS/DEFERRALS
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
04/04/22 (H) READ THE FIRST TIME - REFERRALS
04/04/22 (H) CRA, L&C
04/05/22 (H) CRA AT 8:00 AM BARNES 124
04/05/22 (H) -- MEETING CANCELED --
04/07/22 (H) CRA AT 8:00 AM BARNES 124
04/07/22 (H) -- MEETING CANCELED --
04/12/22 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
REPRESENTATIVE KEVIN MCCABE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 167.
JULIE MORRIS, Staff
Representative Kevin McCabe
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave a sectional analysis of HB 167 on
behalf of Representative McCabe, prime sponsor.
PAMELA LEARY, Director
Treasury Division
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Responded to questions during the hearing
on HB 167.
REPRESENTATIVE GEORGE RAUSCHER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 349.
RYAN MCKEE, Staff
Representative George Rauscher
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Offered the sectional analysis to HB 349 on
behalf of Representative Rauscher, prime sponsor.
JEREMY PRICE, Chair/Commissioner
Alaska Oil and Gas Conservation Commission
Department of Commerce, Community & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
349.
JESSIE CHMIELOWSKI, Engineering Commissioner
Alaska Oil and Gas Conservation Commission
Department of Commerce, Community & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
349.
RYAN JOHNSTON
Staff, Representative Calvin Schrage
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 402 and HB 411 on behalf of
Representative Schrage, prime sponsor.
ROBERT PEARSON, Local Government Specialist V
Community Aid & Accountability Section
Division of Community and Regional Affairs
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
411.
ACTION NARRATIVE
8:05:08 AM
CO-CHAIR SARA HANNAN called the House Community and Regional
Affairs Standing Committee meeting to order at 8:05 a.m.
Representatives McCabe, Prax, Drummond, McCarty, and Hannan were
present at the call to order. Representative Schrage arrived
(via teleconference) as the meeting was in progress.
HB 167-GOLD AND SILVER SPECIE AS LEGAL TENDER
8:06:22 AM
CO-CHAIR HANNAN announced that the first order of business would
be HOUSE BILL NO. 167, "An Act relating to specie as legal
tender in the state; and relating to borough and city sales and
use taxes on specie."
8:06:56 AM
REPRESENTATIVE KEVIN MCCABE, Alaska State Legislature, as prime
sponsor, paraphrased the sponsor statement [included in the
committee packet], which read as follows [original punctuation
provided]:
The purpose of HB 167 is to recognize Alaska's
constitutional duty, power and right under Section 10,
Article I, of the United States Constitution, and the
Tenth Amendment of the United States Constitution to
make gold and silver legal tender in the payment of
debt. HB 167 will secure the rights of citizens of
this state under the Ninth and Tenth Amendments of the
United States Constitution to tender gold and silver
in the payment of a debt should the merchant or payee
agree to accept it. This bill will bring Alaska into
full compliance with the United States Constitution
with the policies, practices, and procedures of this
State with respect to the use of gold, silver and
specie as legal tender in the payment of debt. In
these unprecedented times, this bill will preserve,
protect, and promote the state and its economic
security, safety, health, and welfare of the people of
this state; and protect this state and its citizens in
the acquisition and possession of gold and silver and
their use as legal tender in the payment of debt.
REPRESENTATIVE MCCABE remarked that "it sounds dangerous." He
noted many states have done this. He said there is interest in
the bill, which would create a study in the House Finance
Committee on "the possibility of establishing an alternative
form of legal tender for the payment of debts, public charges,
taxes, and other money owed to the state."
8:11:43 AM
JULIE MORRIS, Staff, Representative Kevin McCabe, Alaska State
Legislature, on behalf of Representative McCabe, prime sponsor
of HB 167, read the sectional analysis [included in the
committee packet].
8:14:07 AM
REPRESENTATIVE MCCABE, in response to Representative McCarty's
query as to the trustworthiness of gold specie, said he thinks
it is as trustworthy as any other legal tender. In response to
a follow-up question regarding changes in the value of gold,
said he cannot say what the value of the gold, in terms of
carats, is in the specie, but he could find out. He said other
states just look up the value of gold; he acknowledged that the
value fluctuates.
REPRESENTATIVE MCCARTY said, "I think this is a great idea."
8:18:59 AM
REPRESENTATIVE PRAX suggested the problem is that many years ago
U.S. Congress abandoned "the constitutionally required manner of
establishing a currency." It is the value of the federal
reserve note that fluctuates. He indicated it is the public
that will have to accept it.
8:20:21 AM
REPRESENTATIVE DRUMMOND observed that "this appears to be
applied to plastic" and said she is used to "gold or ...
metallic foils, in printing, being stamped onto paper." She
asked, "How do you know there's gold in this, and how do you
recover it from plastic, which melts when you apply heat to it?"
REPRESENTATIVE MCCABE said he did not know, but was assured from
a dealer that [the specie samples he had brought for the
committee to view] were legitimate. In response to a follow-up
question, he said the states that issue these accept them as
legal tender.
REPRESENTATIVE DRUMMOND noted the words "should the merchant or
payee agree to accept it" in the sponsor statement and
considered that since the value fluctuates, the burden to
determine the value would fall on the merchant.
REPRESENTATIVE MCCABE likened that to setting gas prices.
8:24:59 AM
PAMELA LEARY, Director, Treasury Division, Department of
Revenue, in response to a question from Representative McCarty
regarding tax reporting in relation to species, said she does
not know the tax ramifications but guessed that the value
tendered would be the reported income value, as with any other
currency. She said she would need to do some research to
provide a definite answer to that question.
8:27:57 AM
CO-CHAIR HANNAN asked Ms. Leary to also find out whether the
states using species accept them for state tax purposes and how
states are dealing with this within the states' treasuries.
MS. LEARY responded that some of the states have gold
repositories, so that may be how they are able to "accept that."
She said she could do further research.
8:29:00 AM
REPRESENTATIVE PRAX suggested Ms. Leary research Epperly v.
Alaska. He said the federal reserve notes are "accepted" but
"not constitutionally authorized."
8:30:44 AM
REPRESENTATIVE DRUMMOND said she sensed this could present a
problem to the recreational marijuana industry, which currently
cannot be served by Alaska's financial institutions because of
federal laws.
8:31:54 AM
REPRESENTATIVE MCCABE countered that making species be legal
tender would actually benefit the marijuana industry, because
currently it cannot put its dollars in a bank, and dollars lose
value. He said, "These wouldn't lose value because they're tied
to gold." To Representative McCarty's question about taxes, he
surmised that if [a merchant] brings in one dollar's worth in
gold, and at the end of the year it is worth $20, then the
merchant would have to [report that as taxable income] "much the
same as you would with interest." He offered his understanding
that the value of the dollar has gone down 30 percent in the
last three years. In closing, he asked for the committee's
support of HB 167 and indicated upcoming testimony and receipt
of letters of report.
8:34:25 AM
CO-CHAIR HANNAN announced that HB 167 was held over.
8:34:34 AM
The committee took a brief at-ease at 8:34 a.m.
HB 349-HEARING ESTABLISH DRILLING UNITS/SPACING
8:35:21 AM
CO-CHAIR HANNAN announced that the next order of business would
be HOUSE BILL NO. 349, "An Act relating to the establishment of
oil and gas drilling units and patterns."
8:35:48 AM
REPRESENTATIVE GEORGE RAUSCHER, Alaska State Legislature, as
prime sponsor of HB 349, paraphrased the sponsor statement,
which read as follows [original punctuation provided]:
HB 349 was written because the way we search for and
produce oil in the 21st century, has changed since the
1950's. During that time, policymakers were worried
that oil companies might drill too many vertical wells
that were spaced too tightly together, resulting in
oil left in the ground that could no longer be
recovered. Try googling Spindletop images.
Today, no one is spending millions of dollars to drill
unnecessary wells in Alaska. In the decades since the
early days of the industry, advancements in drilling
technology allows wells to be directionally drilled
underground, sometimes with multiple lateral wells
from a single motherbore or parent well. Holes can be
a few thousand feet deep, yet tens of thousands of
feet long to recover greater amounts of oil and gas.
Unfortunately, our outdated statutes have not kept up
with the advancements in the oil and gas industry. The
statutes being amended by this legislation were
originally designed to provide oversight by involving
another step, to provide assurance that perforations
into the ground were not going to be too close,
jeopardizing substructure integrity of the field or
zone. This extra oversight is no longer necessary,
slows down development and costs the state time and
money. HB 349 eliminates needless regulatory red tape,
as drilling and production processes have
fundamentally changed since the statue was written.
8:38:40 AM
The committee took an at-ease from 8:38 a.m. to 8:41 a.m.
8:41:17 AM
RYAN MCKEE, Staff, Representative George Rauscher, Alaska State
Legislature, read the sectional analysis to HB 349 [included in
the committee packet] on behalf of Representative Rauscher,
prime sponsor.
8:43:03 AM
REPRESENTATIVE MCCARTY questioned the significance of a change
from "that" to "which".
MR. MCKEE suggested someone from the Alaska Oil and Gas
Conservation Commission (AOGCC) should be able to explain.
8:43:31 AM
REPRESENTATIVE DRUMMOND remarked that the sectional analysis
should explain what would happen to law as a result of the
change from "which" to "that", and she said she was not sure the
sectional analysis would "stand up to scrutiny."
8:44:00 AM
CO-CHAIR HANNAN noted that the change from "which" to "that" is
found in Section 1, on [page 1], line 6, and asked a
representative from AOGCC to offer explanation.
8:44:24 AM
JEREMY PRICE, Chair/Commissioner, Alaska Oil and Gas
Conservation Commission, Department of Commerce, Community &
Economic Development, told Co-Chair Hannan that that particular
change had been made by [Legislative Legal Services] rather than
requested by AOGCC. In response to a follow-up request from Co-
Chair Hannan, he offered his understanding that the goal of the
legislation is to no longer require a holding of a hearing in
instances of well spacing and regarding drilling. He said AOGCC
is pleased to see the substantive change, in Section 1, from
"may" to "shall" in direction of the commission establishing a
drilling unit for each pool. He offered further clarification
as to the process of discovery and drilling and spacing
exceptions.
8:47:36 AM
JESSIE CHMIELOWSKI, Engineering Commissioner, Alaska Oil and Gas
Conservation Commission, Department of Commerce, Community &
Economic Development, specified the changes requested by AOGCC
are relatively small and occur on page 1, lines 7-8, the
deletion of "shall" and insertion of "may"; and on page 1, lines
14-15, the deletion of "after notice and hearings". She said
those changes give AOGCC more flexibility and help it change its
goal.
8:48:33 AM
CO-CHAIR HANNAN mentioned news coverage regarding a gas leak
that happened the day before, and she interpreted the article to
indicate that there had not been well spacing that was
adequately evaluated. She said she thought this is the problem
that well spacing language is meant to prevent. She asked
whether a hearing [of the commission] could have prevented that
occurrence and whether well spacing has "anything to do with
that discharge of gas."
8:50:27 AM
MS. CHMIELOWSKI indicated that the well in question would not
have qualified for an exemption. She offered further details.
In response to a follow-up question regarding the protection of
economic development alongside assurance of no risk to the
public, she first explained that what is being talked about is
not the distance of the well from another well's surface, but
rather where the well penetrates the reservoir. She noted that
when a well is drained too quickly, it results in waste, and
AOGCC encourages "ultimate maximum recovery from a reservoir."
It monitors where wells are drilled. Wells are built based on
geology and reservoir characteristics; default drilling sections
based on governmental sections are out of date, she explained.
She described a well that goes down vertically and then changes
to horizontal, crossing multiple governmental sections. There
can be multiple, long lateral [drills]. She said building more
than one well in a governmental section does not promote waste;
it allows for more recovery from the reservoir, which is a goal
of AOGCC. She explained that [through HB 349], AOGCC is asking
the legislature to relieve the commission from an administrative
burden. She noted that the protection of owners to receive
their share of the resource would remain unchanged under the
proposed legislation.
8:56:40 AM
MR. PRICE proffered that a governmental section is 160 acres of
subsurface distance around a well. He said at this point in
time, when a company finds oil and gas, it has to "settle in for
a while" before it is able to drill additional wells, in order
to "jump through these hoops that are largely unnecessary at
this point in time."
8:58:25 AM
MS. CHMIELOWSKI, in response to Representative Prax, confirmed
that the spacing of the well in the aforementioned event of
yesterday was not the issue. What happened was a surprise that
could not have been predicted.
8:59:00 AM
REPRESENTATIVE RAUSCHER, in response to a query from
Representative Prax, said he would bring photos showing how
wells were drilled [on the North Slope], where he worked in the
'70s and '80s, with comparison to how wells are drilled now. He
clarified that the proposed legislation would clean up language
to avoid requiring an unnecessary process.
9:01:46 AM
CO-CHAIR HANNAN noted this is not a North Slope issue but a Cook
Inlet one, and she said she would like the committee to
understand the problem being faced in that location. She
mentioned "spindle tops" in Allegheny, New York, which have been
in existence since the 1860s.
9:03:10 AM
REPRESENTATIVE DRUMMOND reflected on the number of drilling
sites she has seen in the Kern River oil field, in Bakersfield,
California.
9:04:01 AM
CO-CHAIR HANNAN announced that HB 349 was held over.
9:04:04 AM
The committee took a brief at-ease at 9:04 a.m.
HB 402-IDENTIFICATION OF CONTRACTOR IN ADS
9:04:54 AM
CO-CHAIR HANNAN announced that the next order of business would
be HOUSE BILL NO. 402, "An Act relating to identification
requirements for contractors and home inspectors."
9:05:07 AM
RYAN JOHNSTON, Staff, Representative Calvin Schrage, Alaska
State Legislature, presented HB 402 on behalf of Representative
Schrage, prime sponsor. He said the bill would address an issue
related to the advertising requirements of contractors, based on
statute established in 1968. The contractors currently are
required "to list fairly specific language" and HB 402 would
provide opportunity for an online option. He read the sectional
analysis of HB 402, included in the committee packet. The bill
would amend AS 08.18.171 to add new language specifying that a
contractor's Internet website or "landing page" satisfies the
contractor's identification requirements. He said Section 2
would amend AS 08.18.053(b); he indicated that the same action
would be taken for home inspectors. He noted that HB 402 would
add the definition of "landing page" a single page that
appears in response to clicking on a search engine and other
advertisement.
9:07:15 AM
REPRESENTATIVE DRUMMOND expressed total understanding of the
proposed legislation.
MR. JOHNSTON noted that the bill looks to help small business
owners with multiple licenses by modernizing the process.
9:09:06 AM
MR. JOHNSTON, in response to Representative McCarty, explained
that the bill would establish a way for all licensing
information to be made available in one online search platform.
In response to a follow-up question, he confirmed Representative
McCarty was correct in saying that the website information would
still need to be included in a print advertisement.
9:11:53 AM
CO-CHAIR HANNAN, to clarify, offered her understanding that the
proposed bill would not require use of a website but would allow
it.
MR. JOHNSTON confirmed that is correct.
9:13:54 AM
CO-CHAIR SCHRAGE, as prime sponsor, confirmed that Co-Chair
Hannan had aptly expressed the status quo in comparison to what
HB 402 would allow.
9:14:04 AM
CO-CHAIR HANNAN announced that HB 402 was held over.
9:14:10 AM
The committee took a brief at-ease at 9:14 a.m.
HB 411-MUNICIPAL TAX EXEMPTIONS/DEFERRALS
9:14:34 AM
CO-CHAIR HANNAN announced that the final order of business would
be HOUSE BILL NO. 411, "An Act relating to municipal tax
exemptions and deferrals on economic development property."
9:14:48 AM
RYAN JOHNSTON, Staff, Representative Calvin Schrage, Alaska
State Legislature, presented HB 411 on behalf of Representative
Schrage, prime sponsor. He said the bill seeks to allow
municipalities to offer tax exemptions and deferrals on economic
development property within service areas. The bill would amend
AS 29.45.050(m) to allow the exemptions and deferrals, but it
would provide a 30-day window for the service areas to concur or
disagree with the potential tax deferral.
9:16:33 AM
ROBERT PEARSON, Local Government Specialist V, Community Aid &
Accountability Section, Division of Community and Regional
Affairs, Department of Commerce, Community & Economic
Development, in response to a question from Representative
Drummond as to the definition of "special service area", offered
his understanding that the definition is in statute, but he did
not know it offhand.
9:18:57 AM
MR. JOHNSTON, in response to a concern from Representative Prax
that some service areas may not meet often enough to be able to
respond within 30 days, said that possibility has been
considered by the bill sponsor, and one idea would be to specify
30 days "from notice" to the service area. To a follow-up
question, he confirmed the bill sponsor's office has been in
contact with the Fairbanks North Star Borough.
9:21:03 AM
REPRESENTATIVE DRUMMOND said by-laws for meeting notification
may result in the need for the notice proposed under HB 411 to
be increase to 60 or 90 days. She said again she would like a
definition of service areas.
9:21:39 AM
MR. JOHNSTON, in response to Representative McCarty, gave
Girdwood as an example of service area governed by a board and a
place that cannot be offered economic development incentives by
the Municipality of Anchorage. In response to a follow-up
question, regarding why Girdwood would be approaching the state,
he offered his understanding that when the statute was first put
in place, there was concern that a municipality could "do
anything" without [consulting] with the service area. He said
he would seek a better answer for Representative McCarty.
9:24:07 AM
REPRESENTATIVE PRAX said he thinks it is fair to say that
currently a second-class borough could grant tax exemption from
borough imposed taxes, but should not be allowed to require the
service area to agree to the tax exemption of the service area
tax. He offered his understanding that that could be done
today, and that is what HB 411 is trying to prevent.
9:25:06 AM
MR. PEARSON said he thinks Representative Prax is correct. He
said the makers of the existing statute were trying to avoid a
situation by disallowing it altogether; whereas HB 411 would
allow it with the approval of the service area.
9:26:21 AM
REPRESENTATIVE DRUMMOND noted the government structure of
Anchorage and how it is different from that in Girdwood.
9:27:04 AM
CO-CHAIR HANNAN asked Mr. Pearson for knowledge about what
statute allows for service areas within municipal governments
and how many of them there are.
MR. PEARSON estimated there are potentially hundreds of service
areas that could be affected by HB 411. In response to a
follow-up question, he said there are property taxes in various
sized city governances, but there are many jurisdictions without
property taxes.
9:29:33 AM
REPRESENTATIVE PRAX surmised that citizens could establish a
service area which taxes itself in order to have police
protection, for example.
9:30:28 AM
REPRESENTATIVE DRUMMOND offered an example of expansion of a
police service area in Anchorage.
9:31:52 AM
MR. JOHNSTON, in response to a request from Representative Prax
for a definition of "economic development property", directed
attention to the definition on page 2, lines 8-24.
9:33:12 AM
CO-CHAIR HANNAN announced that HB 411 was held over.
9:33:25 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:33 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB167 VerO.SupportingLetters2.4.11.22.pdf |
HCRA 4/12/2022 8:00:00 AM |
HB 167 |