Legislature(2003 - 2004)

02/24/2004 05:21 PM House EDT

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
        HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT,                                                                      
                INTERNATIONAL TRADE AND TOURISM                                                                               
                       February 24, 2004                                                                                        
                           5:21 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Cheryll Heinze, Chair                                                                                            
Representative Nancy Dahlstrom                                                                                                  
Representative Vic Kohring                                                                                                      
Representative Sharon Cissna                                                                                                    
Representative Harry Crawford                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Lesil McGuire, Vice Chair                                                                                        
Representative Pete Kott                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 419                                                                                                              
"An  Act relating  to regional  seafood development  associations                                                               
and to regional seafood development taxes."                                                                                     
                                                                                                                                
     - MOVED CSHB 419(EDT) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 512                                                                                                              
"An  Act  establishing the  Hydrogen  Energy  Partnership in  the                                                               
Department of  Community and Economic Development;  requiring the                                                               
commissioner  of  community  and  economic  development  to  seek                                                               
public  and private  funding for  the partnership;  providing for                                                               
the contingent repeal of an  effective date; and providing for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 419                                                                                                                  
SHORT TITLE: REGIONAL SEAFOOD DEVELOPMENT ASS'NS./TAX                                                                           
SPONSOR(S): REPRESENTATIVE(S)  OGG BY REQUEST OF  SALMON INDUSTRY                                                               
TASK FORCE                                                                                                                      
                                                                                                                                
02/02/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/02/04       (H)       EDT, RES, FIN                                                                                          
02/10/04       (H)       EDT AT 10:00 AM CAPITOL 120                                                                            
02/10/04       (H)       Heard & Held                                                                                           
02/10/04       (H)       MINUTE(EDT)                                                                                            
02/24/04       (H)       EDT AT 5:15 PM CAPITOL 120                                                                             
                                                                                                                                
BILL: HB 512                                                                                                                  
SHORT TITLE: HYDROGEN ENERGY RESEARCH PROGRAM                                                                                   
SPONSOR(S): REPRESENTATIVE(S) CRAWFORD                                                                                          
                                                                                                                                
02/16/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/04       (H)       EDT, FIN                                                                                               
02/24/04       (H)       EDT AT 5:15 PM CAPITOL 120                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE DAN OGG                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Spoke as  sponsor of  HB 419 by  request of                                                               
the Joint Legislative Salmon Industry Task Force.                                                                               
                                                                                                                                
GERALD McCUNE, President                                                                                                        
Cordova District Fisheries United                                                                                               
Cordova, Alaska                                                                                                                 
POSITION STATEMENT:  Spoke in support of HB 419.                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-12, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  CHERYLL  HEINZE  called the  House  Special  Committee  on                                                             
Economic Development, International Trade  and Tourism meeting to                                                               
order at  5:21 p.m.  Representatives  Heinze, Kohring, Dahlstrom,                                                               
Cissna, and Crawford were present at the call to order.                                                                         
                                                                                                                                
HB 419-REGIONAL SEAFOOD DEVELOPMENT ASS'NS./TAX                                                                               
                                                                                                                                
CHAIR HEINZE announced that the  first order of business would be                                                               
HOUSE  BILL  NO.  419,  "An  Act  relating  to  regional  seafood                                                               
development  associations  and  to regional  seafood  development                                                               
taxes."   [In  packets was  a new  proposed committee  substitute                                                               
(CS), Version Q, labeled 23-LS1418/Q, Utermohle, 2/16/04.]                                                                      
                                                                                                                                
Number 0066                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAN  OGG,  Alaska  State  Legislature,  presented                                                               
HB 419  as sponsor  by request  of the  Joint Legislative  Salmon                                                               
Industry  Task  Force.   He  explained  that  HB 419  will  allow                                                               
different regions in the state to  set up their own marketing and                                                               
development organizations  in order  to enhance their  ability to                                                               
sell their own fish.   He said the last time  he presented HB 419                                                               
to this  committee, there was  some concern because there  was an                                                               
indeterminate fiscal note for the bill.                                                                                         
                                                                                                                                
REPRESENTATIVE  OGG  said  [his  staff]  has  been  working  with                                                               
different departments to make HB  419 more user-friendly.  Noting                                                               
changes in [Version  Q], he said a $500 application  fee has been                                                               
added.  Also,  because of concern from the  Department of Revenue                                                               
(DOR), there  is now language  to ensure  that only one  tax rate                                                               
applies to  each region; the  previous version  allowed different                                                               
fisheries  within  a region  to  establish  different tax  rates,                                                               
which   make  it   hard   for  DOR   to   determine  the   fiscal                                                               
ramifications, so this new version clarifies that issue.                                                                        
                                                                                                                                
REPRESENTATIVE  OGG explained  that  language had  been added  to                                                               
close  what DOR  calls the  "purchaser loophole."   He  explained                                                               
that  under current  statute, if  a fisherman  sells his/her  own                                                               
product to someone  who is not a licensed  fishery, the fisherman                                                               
is not liable for payment of  the tax; the proposed changes would                                                               
make that fisherman liable for the  tax.  He said the last change                                                               
referred to ensuring  inclusion into the associations  [set up by                                                               
HB 419].   He  noted that  the former  version had  language that                                                               
would allow  the association to  exclude an individual  or group;                                                               
the new section  would make sure that any fisherman  or groups of                                                               
fishermen that wanted to participate  in the regional association                                                               
would be allowed to join.                                                                                                       
                                                                                                                                
REPRESENTATIVE  OGG  offered  his  belief  that  the  changes  in                                                               
Version Q made HB 419 a  much better bill, that going through the                                                               
different committees  had been  a learning  process, and  that he                                                               
feels HB 419 has come a long way and is something that works.                                                                   
                                                                                                                                
Number 0294                                                                                                                     
                                                                                                                                
CHAIR  HEINZE referred  to  the handout  in  packets labeled  "CS                                                               
change for HB 419,"  noting that the fourth  section [relating to                                                               
Sec. 44.33.065(a)(3)]  says "any  fisherman or  other persons  or                                                               
groups".  She asked what "other persons or groups" refers to.                                                                   
                                                                                                                                
REPRESENTATIVE OGG referred to [Version  Q], page 9, line 30, and                                                               
said the  language would allow  processors to be  affiliated with                                                               
the  association.    He  then  noted  a  typographical  error  on                                                               
page 10,  line   28,  where  "Northern"  should   be  changed  to                                                               
"Norton".                                                                                                                       
                                                                                                                                
Number 0426                                                                                                                     
                                                                                                                                
GERALD  McCUNE,  President,  Cordova  District  Fisheries  United                                                               
(CDFU),  spoke  in  support of  HB  419.    He  said CDFU  has  a                                                               
marketing  committee  that  has  been  marketing  their  region's                                                               
salmon for  eight years, and feels  passage of HB 419  would help                                                               
to  fund their  marketing committee,  which is  now dependent  on                                                               
grants.   The increased funding from  the tax would help  CDFU do                                                               
more things  such as  expand its business  from the  Copper River                                                               
salmon  into  chum  salmon  and  other species.    He  said  CDFU                                                               
wholeheartedly  supports  HB 419  with  the  changes proposed  in                                                               
Version Q.   He said  he envisions a  committee in his  area with                                                               
the  mayor, the  processors, and  the fishermen  sitting together                                                               
and coming up with better  advertising, more effective marketing,                                                               
and increased sales of their product.                                                                                           
                                                                                                                                
Number 0516                                                                                                                     
                                                                                                                                
CHAIR HEINZE  stated that  because the  committee had  just heard                                                               
the  bill last  week, she  felt  everything was  covered but  the                                                               
fiscal note.                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 5:30 p.m.                                                                                 
                                                                                                                                
Number 0554                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA moved [to  adopt Amendment 1, which amended                                                               
Version  23-LS1418/Q, Utermohle,  2/16/04,  not  yet adopted]  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Page 10, line 28,                                                                                                          
     Delete "Northern"                                                                                                          
     Insert "Norton"                                                                                                            
                                                                                                                                
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
Number 0591                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAHLSTROM  moved to report [CSHB  419, Version 23-                                                               
LS1418/Q, Utermohle,  2/16/04, as amended] out  of committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.                                                                                                                           
                                                                                                                                
Number 0603                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOHRING objected for purposes of discussion.                                                                     
                                                                                                                                
REPRESENTATIVE  KOHRING  said  the committee  had  addressed  the                                                               
concept of  organizations taxing themselves before,  when dealing                                                               
with the tourism industry.   He asked Representative Ogg why this                                                               
legislation is  necessary when the  groups could raise  the money                                                               
themselves.                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG  acknowledged that  the groups could  do that,                                                               
but said having a statute would  make it harder for the attorneys                                                               
to break the association apart.                                                                                                 
                                                                                                                                
Number 0716                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOHRING  noted that  there would probably  be some                                                               
people who  didn't want  to participate  in the  regional seafood                                                               
associations,  and  asked if  Representative  Ogg  has heard  any                                                               
strong opposition to the passage of HB 419.                                                                                     
                                                                                                                                
REPRESENTATIVE OGG  said he was  on the Joint  Legislative Salmon                                                               
Industry Task  Force and hadn't  heard any opposition to  HB 419.                                                               
He said CDFU had proposed the  idea for HB 419 because of concern                                                               
that  many of  the regional  organizations are  currently run  by                                                               
grant funding, that those grants are  hard to find, and that they                                                               
won't  always  be  available.    He said  the  concern  from  the                                                               
industry was  in regard to  creating competition  among different                                                               
regions within  the state;  that issue  was addressed  by putting                                                               
language into the  bill that promoted cooperation  with the other                                                               
regions  as  well  as  the  Alaska  Seafood  Marketing  Institute                                                               
(ASMI).  He  added that inclusion into  the regional associations                                                               
was voluntary  and that a person  could decide whether or  not to                                                               
become involved.                                                                                                                
                                                                                                                                
Number 0848                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOHRING asked  if individual  fishermen would  be                                                               
taxed as  a result of  HB 419, or if  the entity of  the regional                                                               
associations would be taxed.                                                                                                    
                                                                                                                                
REPRESENTATIVE OGG  answered that if  a fisherman voted  into the                                                               
regional association,  then that  fisherman would be  taxed under                                                               
HB 419.                                                                                                                         
                                                                                                                                
Number 0900                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOHRING  expressed  concern   that  this  may  be                                                               
opening the door for future  taxation of fishermen, and he wasn't                                                               
sure he wanted to go down that road.                                                                                            
                                                                                                                                
REPRESENTATIVE  OGG responded  that it  was a  good idea  to look                                                               
down the  road, and  while putting  together HB  419 he  was very                                                               
specific  with the  wording.    He added  that  because only  the                                                               
legislature could  impose taxes, the  bill is very  particular in                                                               
setting up the tax range from 0.5  percent to 2 percent.  He said                                                               
in order for  the taxing structure to change, it  is necessary to                                                               
come back to the legislature.                                                                                                   
                                                                                                                                
REPRESENTATIVE  KOHRING  commended  Representative  Ogg  and  the                                                               
fishing industry for  pushing forward HB 419.  He  stated that he                                                               
felt it  was respectable  when an industry  was willing  to self-                                                               
impose a tax to help generate  revenue.  However, his problem was                                                               
philosophical,  he  said,  since   he  didn't  feel  establishing                                                               
another taxing entity  was the proper course.  He  said he'd feel                                                               
better  if  the associations  could  be  set  up outside  of  the                                                               
governmental realm.                                                                                                             
                                                                                                                                
REPRESENTATIVE  OGG responded  that if  it could  have been  done                                                               
another way, it probably  would have been.  He said  HB 419 had a                                                               
governmental  connection that  was as  limited as  possible while                                                               
still allowing the regional associations to form.                                                                               
                                                                                                                                
Number 1012                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA  asked for clarification on  the term "tax"                                                               
when  referring to  this bill.   She  said she  wasn't sure  if a                                                               
group  of people  getting together  and voluntarily  contributing                                                               
money in an  effort to get something done fell  under the general                                                               
definition of a tax.                                                                                                            
                                                                                                                                
REPRESENTATIVE  OGG  replied  that what  he  felt  Representative                                                               
Cissna  was referring  to was  more along  the lines  of property                                                               
owners.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  CISSNA   said  that  was  similar   to  what  was                                                               
happening  with this  association, since  the permit  holders are                                                               
essentially property  owners.   She said  she was  just wondering                                                               
about the use of words.                                                                                                         
                                                                                                                                
REPRESENTATIVE OGG said he hoped he was helpful.                                                                                
                                                                                                                                
Number 1162                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAHLSTROM moved  to adopt  CSHB 419,  Version 23-                                                               
LS1418/Q, Utermohle,  2/16/04, as a  work draft.  There  being no                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
Number 1166                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  again  moved   to  adopt  Amendment  1                                                               
[changing "Northern"  to "Norton"  on page 10,  line 28].   There                                                               
being no objection, it was so ordered.                                                                                          
                                                                                                                                
Number 1182                                                                                                                     
                                                                                                                                
REPRESENTATIVE DAHLSTROM  renewed the motion to  report CSHB 419,                                                               
Version  23-LS1418/Q,  Utermohle,  2/16/04, as  amended,  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note.  There  being no objection, CSHB  419(EDT) was                                                               
reported   from  the   House   Special   Committee  on   Economic                                                               
Development, International Trade and Tourism.                                                                                   
                                                                                                                                
HB 512-HYDROGEN ENERGY RESEARCH PROGRAM                                                                                       
                                                                                                                                
Number 1216                                                                                                                     
                                                                                                                                
CHAIR HEINZE announced that the  final order of business would be                                                               
HOUSE  BILL NO.  512, "An  Act establishing  the Hydrogen  Energy                                                               
Partnership  in   the  Department   of  Community   and  Economic                                                               
Development;   requiring  the   commissioner  of   community  and                                                               
economic development to  seek public and private  funding for the                                                               
partnership; providing for the contingent  repeal of an effective                                                               
date; and providing for an effective date."                                                                                     
                                                                                                                                
Number 1231                                                                                                                     
                                                                                                                                
REPRESENTATIVE   CRAWFORD,  sponsor,   explained   that  HB   512                                                               
establishes a  hydrogen energy partnership within  the Department                                                               
of Community &  Economic Development (DCED).   Noting that Hawaii                                                               
has a  similar commission, he said  passage of the bill  is about                                                               
"the future of  Alaska, the future of America, and,  I think, the                                                               
future of  the human  race."   He used  an analogy  to illustrate                                                               
that  Alaska  needs to  be  forward  thinking when  dealing  with                                                               
energy resources.  He said  [the country] will shift from carbon-                                                               
based energy in  the future, and he feels hydrogen  energy is how                                                               
the energy  needs will be  met.  Saying he  wants Alaska to  be a                                                               
leader in  the hydrogen-based energy economy,  he emphasized that                                                               
HB 512 would help with that.                                                                                                    
                                                                                                                                
REPRESENTATIVE  CRAWFORD shared  the reasons  Alaska should  move                                                               
into hydrogen  energy research.   He cited uncertain  supplies of                                                               
natural gas and the aging  infrastructure [of the oil suppliers],                                                               
and  opined that  exploring hydrogen  energy sources  could bring                                                               
stability.  He explained that the  best way for Alaska to produce                                                               
hydrogen energy is  by using renewable resources  that Alaska has                                                               
an abundance of.   He cited a statistic that  there are about 100                                                               
years' worth  of oil resources  left in the  world and 150  - 200                                                               
years  of coal  resources left.   He  pointed out,  however, that                                                               
there are  enough geothermal resources  to produce  45,000 years'                                                               
worth of energy.                                                                                                                
                                                                                                                                
Number 1385                                                                                                                     
                                                                                                                                
REPRESENTATIVE CRAWFORD  said one  reason geothermal  energy goes                                                               
unused  is  because  the  areas with  the  resources  have  small                                                               
populations.    Hydrogen  can  be  produced  from  seawater  with                                                               
geothermal  resources  and  shipped  in  tankers  throughout  the                                                               
world.  He  suggested Alaska could set up power  plants in remote                                                               
villages and run those plants from  hydrogen fuel cells.  He also                                                               
pointed out  that hydrogen is  a nonpolluting energy  source that                                                               
only produces water  vapor.  He said pushing this  type of energy                                                               
source would  help with  global warming  because it  would reduce                                                               
the emission of carbon monoxide into the atmosphere.                                                                            
                                                                                                                                
REPRESENTATIVE CRAWFORD,  noting that shipping  hydrogen requires                                                               
the use of  zeolites, said Alaska has a lot  of zeolite resources                                                               
that  could  be  mined,  and   that  industry  could  be  further                                                               
developed.  He  said there are lots of other  reasons for further                                                               
developing hydrogen  energy resources, an area  Hawaii is already                                                               
exploring.  He said Alaska  has the resources to develop hydrogen                                                               
energy, and has a site on the  island of Akutan that could be set                                                               
up as  a demonstration project.   He said the only  thing that is                                                               
holding this project up is [the legislature].                                                                                   
                                                                                                                                
Number 1494                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOHRING asked  whether Representative Crawford has                                                               
heard any opposition from the  oil industry, and wondered if [the                                                               
state] hadn't  seen aggressive development in  hydrogen resources                                                               
because the  oil industry is  powerful and is pushing  to further                                                               
develop oil resources.                                                                                                          
                                                                                                                                
REPRESENTATIVE CRAWFORD answered that  he hadn't heard opposition                                                               
from the oil industry.  He  said companies are starting to buy up                                                               
land in other states that  have geothermal potential because of a                                                               
strong  belief that  this  type  of energy  is  the future  power                                                               
source for vehicles.  Representative  Crawford reported he'd seen                                                               
some hydrogen  cars when  he went to  the National  Conference of                                                               
State Legislatures  (NCSL) in  San Francisco  and felt  that "the                                                               
future is  now."  He stressed  that Alaska needs to  develop this                                                               
resource now, before it is too late.                                                                                            
                                                                                                                                
Number 1586                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOHRING related his  understanding that it takes a                                                               
lot of  energy to create  hydrogen, and surmised  that geothermal                                                               
energy is  so attractive because  it is  clean and abundant.   He                                                               
asked  Representative  Crawford  where the  realistic,  potential                                                               
geothermal energy sites are in Alaska.                                                                                          
                                                                                                                                
REPRESENTATIVE CRAWFORD  answered that there are  potential sites                                                               
all through  the Alaska  Peninsula, the island  of Akutan,  and a                                                               
site  west of  the Beluga  power  plant that  have potential  for                                                               
geothermal energy  harnessing.   He added  that the  Beluga power                                                               
plant had excess power capacity  and doesn't run efficiently.  He                                                               
said the excess power could be  used to create hydrogen and store                                                               
that energy  for times of  need.  He added  that the same  can be                                                               
said for  coal plants, and  the utilization of this  excess power                                                               
to create hydrogen would drive the cost down for the consumer.                                                                  
                                                                                                                                
Number 1701                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOHRING  commented that  those ideas  sound great,                                                               
and asked  why some corporation  or entrepreneur  hadn't invested                                                               
money into the development of hydrogen.                                                                                         
                                                                                                                                
REPRESENTATIVE  CRAWFORD replied  that he'd  discussed that  with                                                               
the  developers  of the  hydrogen  fuel-cell  cars at  the  NCSL;                                                               
they'd told  him that without  government involvement,  there was                                                               
no impetus  to invest in a  distribution system as long  as there                                                               
was oil to burn.  He  added that without the distribution system,                                                               
there is  no impetus to build  the cars; the auto  industry could                                                               
have the cars available if  there were a distribution system; and                                                               
the  service stations  will invest  in  the distribution  systems                                                               
when there is a demand for them.   Thus the government has to get                                                               
the ball rolling and create the impetus for both sides.                                                                         
                                                                                                                                
REPRESENTATIVE CRAWFORD noted that  in Iceland, they are changing                                                               
over to hydrogen-powered vehicles.   Saying California would love                                                               
to have  clear skies  again, he said  he felt this  was a  way to                                                               
make  that happen.   He  said it  will take  the policymakers  to                                                               
initiate this change, and HB 512 is the start of that.                                                                          
                                                                                                                                
Number 1822                                                                                                                     
                                                                                                                                
CHAIR HEINZE noted that Chugach  has one of the largest fuel-cell                                                               
demonstration projects  in the world.   She shared that  during a                                                               
recent briefing  on mining, she  learned that some  companies are                                                               
going to start  mining north of Fairbanks for  platinum that will                                                               
be used for fuel-cell development.   She said Representative Kott                                                               
is interested  in fuel cells,  and announced that the  bill would                                                               
be  held over  for further  discussion and  for his  involvement.                                                               
[HB 512 was held over.]                                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special  Committee on  Economic Development,  International Trade                                                               
and Tourism meeting was adjourned at 5:25 p.m.                                                                                  

Document Name Date/Time Subjects