Legislature(2003 - 2004)
02/24/2004 05:21 PM House EDT
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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.
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