Legislature(2021 - 2022)ADAMS 519

03/03/2022 09:00 AM House FINANCE

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                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 3, 2022                                                                                            
                         9:01 a.m.                                                                                              
9:01:22 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Merrick called the  House Finance Committee meeting                                                                    
to order at 9:01 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen (via teleconference)                                                                              
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
Representative Bryce Edgmon                                                                                                     
ALSO PRESENT                                                                                                                  
Representative  Mike  Prax, Sponsor;  Representative  George                                                                    
Rauscher, Sponsor; Ryan  McKee, Staff, Representative George                                                                    
Rauscher;  Caroline  Schultz,   Policy  Analyst,  Office  of                                                                    
Management  and  Budget,  Office  of  the  Governor;  Claire                                                                    
Gross, Staff, Representative  Jonathan Kreiss-Tomkins; Nancy                                                                    
Meade, General  Counsel, Alaska Court System;  Kelly Howell,                                                                    
Special Assistant to the  Commissioner, Department of Public                                                                    
PRESENT VIA TELECONFERENCE                                                                                                    
Corey Bigelow,  Operations Manager, Permanent  Fund Dividend                                                                    
Division,  Department of  Revenue; Kara  Moriarty, President                                                                    
and  CEO, Alaska  Oil and  Gas Association;  Colleen Glover,                                                                    
Director,    Tax    Division,   Department    of    Revenue;                                                                    
Representative   Jonathan   Kreiss-Tomkins,  Sponsor;   Lisa                                                                    
Purinton,    Bureau    Chief,     Criminal    Records    and                                                                    
Identification, Department of Public Safety.                                                                                    
HB 158    PFD CONTRIBUTIONS TO GENERAL FUND                                                                                     
          HB 158 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 246    ACCESS TO MARIJUANA CONVICTION RECORDS                                                                                
          HB 246 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 281    APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
          HB 281 was SCHEDULED but not HEARD.                                                                                   
HB 282    APPROP: MENTAL HEALTH BUDGET                                                                                          
          HB 282 was SCHEDULED but not HEARD.                                                                                   
HB 287    A: OIL & GAS TAX CREDIT FUND APPROP.                                                                                  
          HB 287 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
Co-Chair Merrick reviewed the meeting agenda.                                                                                   
HOUSE BILL NO. 158                                                                                                            
     "An Act relating to contributions from permanent fund                                                                      
     dividends to the general fund."                                                                                            
9:01:58 AM                                                                                                                    
9:02:09 AM                                                                                                                    
AT EASE                                                                                                                         
9:02:29 AM                                                                                                                    
REPRESENTATIVE MIKE  PRAX, SPONSOR, explained that  the bill                                                                    
would give  individuals the opportunity to  give their share                                                                    
of the  Permanent Fund  Dividend (PFD)  payment back  to the                                                                    
state  if they  desired. The  bill asked  the Department  of                                                                    
Revenue (DOR) to modify the  electronic PFD application form                                                                    
to  include  a check  box  that  would allow  applicants  to                                                                    
contribute  up  to  the  full   value  of  the  dividend  in                                                                    
increments of $25.                                                                                                              
Representative LeBon  asked if individuals would  be able to                                                                    
designate which agency the funds would go to.                                                                                   
Representative Prax  answered in the negative.  He explained                                                                    
that the that funding would go to the General Fund.                                                                             
Representative LeBon asked if  the sponsor believed it would                                                                    
be  more popular  if Alaskans  could donate  the money  to a                                                                    
specific  department  such  as   the  Department  of  Public                                                                    
Representative  Prax agreed.  He  believed the  idea may  be                                                                    
worth considering in  the future. His goal for  the bill was                                                                    
to make the basic option available to see how it worked.                                                                        
Vice-Chair  Ortiz  shared that  he  had  been approached  by                                                                    
several  constituents  who  would  like to  see  their  PFDs                                                                    
invested  in a  separate Permanent  Fund account  that would                                                                    
grow over time and would be  available to them at some point                                                                    
in the future. He asked the  bill sponsor if he had explored                                                                    
the idea.                                                                                                                       
9:06:08 AM                                                                                                                    
Representative Prax  answered that he  had looked into  it a                                                                    
bit. He stated  that it sounded like a  great idea; however,                                                                    
it would be legally challenging.  He explained that it meant                                                                    
there would be money in  the Permanent Fund that belonged to                                                                    
the public and individuals. He  thought was a good idea, but                                                                    
it was complicated to set up.                                                                                                   
Representative  Thompson thought  he  would  likely come  up                                                                    
with an amendment  to allow people to donate  the funding to                                                                    
the General Fund or to  the principal of the Permanent Fund.                                                                    
He asked the sponsor for his opinion.                                                                                           
Representative Prax  did not object  to the idea.  He stated                                                                    
the  money belonged  to  the  donor so  they  should get  to                                                                    
choose where it  went. He explained that the  PFD funds were                                                                    
in the  General Fund prior  to going to individuals.  He did                                                                    
not  know about  the mechanics  of transferring  the funding                                                                    
back into the Permanent Fund.                                                                                                   
Representative  Thompson asked  for  more  detail about  his                                                                    
Representative Prax  answered that the concepts  proposed by                                                                    
Representative  Thompson  and  Representative LeBon  may  be                                                                    
something worth investigating in  another bill. He wanted to                                                                    
see if the  basic bill was a success first.  He believed the                                                                    
legislature  should  consider  building on  the  idea  after                                                                    
determining how the basic concept worked.                                                                                       
9:08:30 AM                                                                                                                    
Representative  Wool  asked  how  much  Representative  Prax                                                                    
thought people would  donate back. He asked if  there was an                                                                    
approximation, or  if the  sponsor was  "throwing it  to the                                                                    
Representative Prax  answered it  was hard  to guess  and he                                                                    
was throwing it  to the wind. He detailed  that the previous                                                                    
year, 105 people knew they  could donate their check back to                                                                    
DOR  by  endorsing  the  check   and  mailing  back  to  the                                                                    
department. He  noted that in  order to return the  funds to                                                                    
DOR by mail,  recipients had to remember to  request a paper                                                                    
check when applying  for the PFD. He  anticipated the number                                                                    
would  increase because  applicants  determined  what to  do                                                                    
with their  PFD in March,  at the same time  the legislature                                                                    
was discussing the budget. He  noted that quite a few people                                                                    
had stated they  would rather have services  than the check.                                                                    
He  explained  that  the  bill  would  make  it  easier  for                                                                    
individuals to  do. He  did not  believe people  realized it                                                                    
was  possible  to return  their  PFD  to the  department  at                                                                    
Representative   Wool   referenced   Representative   Prax's                                                                    
statement  that individuals  would  be deciding  what to  do                                                                    
with  their  PFD  at  the  same  time  the  legislature  was                                                                    
discussing the budget. He noted  there was a spring forecast                                                                    
coming  up that  would  likely be  advantageous to  Alaska's                                                                    
pocketbook.  He thought  people may  choose to  accept their                                                                    
full  PFD if  there  was  plenty of  money  coming into  the                                                                    
state. He asked if the bill  was only aimed at giving people                                                                    
the option [to  return the funds to the state].  He asked if                                                                    
the  bill   was  also  aiming   to  retrieve  some   of  the                                                                    
expenditures.  He asked  the sponsor  if  he believed  there                                                                    
would be a substantial amount of money redeemed.                                                                                
Representative Prax believed the  funds redeemed as a result                                                                    
of the  bill would be enough  to cover the costs  of setting                                                                    
up the computer program to  accept the funds. He stated that                                                                    
any operating  costs would  be de  minimis once  the program                                                                    
was  set up.  From a  business perspective,  he believed  it                                                                    
would be worth  putting money aside to  advertise the option                                                                    
to people. He explained that  as long as the operating costs                                                                    
were covered, there would be a profit for the state.                                                                            
Co-Chair  Merrick noted  that  Representative Rasmussen  had                                                                    
joined the meeting via teleconference.                                                                                          
9:11:56 AM                                                                                                                    
Representative  Thompson was  interested in  the people  who                                                                    
received  a  paper  check  and  sent  it  back  to  DOR.  He                                                                    
highlighted that  once a  person received  a paper  check, a                                                                    
tax liability  was created.  He asked if  people had  to pay                                                                    
taxes on the returned funds.  Alternatively, he asked if the                                                                    
State  of Alaska  was considered  a  nonprofit donation.  He                                                                    
highlighted  there was  an annual  limit  on donations  that                                                                    
could be claimed against a person's taxes.                                                                                      
Representative  Prax confirmed  that individuals  [returning                                                                    
the  funds] were  liable  for the  tax.  He noted  committee                                                                    
members'  packets  included  a   legal  memo  specifying  it                                                                    
appeared the  donation would  be considered  tax deductible.                                                                    
The  donation  back  to  the  state  was  considered  a  tax                                                                    
deduction  and  how  it  applied to  any  individual  was  a                                                                    
conversation between  the individual, their  accountant, and                                                                    
the IRS.                                                                                                                        
9:13:24 AM                                                                                                                    
Representative   Johnson  thanked   the  bill   sponsor  for                                                                    
introducing the legislation.  She expressed appreciation for                                                                    
bills that  came from  the people. She  asked if  the option                                                                    
provided  by  the  bill  would be  another  check  box  like                                                                    
Pick.Click.Give  or  the  education lottery.  She  asked  if                                                                    
there were any associated costs.                                                                                                
Representative Prax  answered that  the box would  appear at                                                                    
the bottom  of the  list of  the Pick.Click.Give  choices on                                                                    
the application screen.                                                                                                         
Representative Johnson asked  how much it would  cost to add                                                                    
the option.                                                                                                                     
Representative  Prax  replied  the option  would  appear  as                                                                    
another  check  box  below   the  Pick.Click.Give  list.  He                                                                    
detailed that  the fiscal notes estimated  a programming and                                                                    
set  up  cost  of  $43,600.  He  elaborated  that  the  bill                                                                    
included   a  7   percent  charge   similar  to   the  other                                                                    
Pick.Click.Give  contributions. He  thought it  could be  an                                                                    
amendment for consideration. He  did not believe there would                                                                    
be an expense after setting the option up.                                                                                      
Representative Carpenter asked  about the difference between                                                                    
not  applying  for  the  PFD   and  receiving  the  PFD  and                                                                    
returning it.                                                                                                                   
Representative Prax  answered that if someone  did not apply                                                                    
PFD,  their  share was  distributed  between  all the  other                                                                    
applicants. He  explained that opting  not to apply  for the                                                                    
PFD did not accomplish the  objective of directing the money                                                                    
back to the General Fund.                                                                                                       
9:16:37 AM                                                                                                                    
Representative LeBon  asked if the contribution  back to the                                                                    
General Fund would  avoid a tax liability. He  wondered if a                                                                    
person  made  a  taxable  donation they  never  really  took                                                                    
possession of  the funding and  the funds never  really left                                                                    
the state.                                                                                                                      
Representative  Prax  answered  that  it  was  difficult  to                                                                    
estimate  the number  of  people who  wanted  to give  their                                                                    
check back without  asking them first. He  explained that if                                                                    
a person said  they wanted to give the funds  back, they had                                                                    
technically  taken  possession  of payment  even  though  it                                                                    
never reached their hands.                                                                                                      
Representative   Carpenter  asked   how  many   people  were                                                                    
eligible for the PFD who did not apply.                                                                                         
Representative Prax  answered that the number  was around 15                                                                    
percent. He did not have the figure on hand.                                                                                    
Co-Chair Merrick asked if DOR could answer the question.                                                                        
COREY BIGELOW,  OPERATIONS MANAGER, PERMANENT  FUND DIVIDEND                                                                    
DIVISION,  DEPARTMENT   OF  REVENUE   (via  teleconference),                                                                    
replied he  was uncertain the division  had the information.                                                                    
He explained  that the  PFD Division  received approximately                                                                    
670,000  applications  annually.  He  noted  that  duplicate                                                                    
applications  could   reach  up  to  several   thousand.  He                                                                    
reasoned it could be possible  to determine the number based                                                                    
on  the  number of  applicants  compared  to the  number  of                                                                    
Alaskan residents. He did not have the information on hand.                                                                     
Representative  Carpenter considered  individuals who  chose                                                                    
not to apply  for the PFD because  they were philosophically                                                                    
opposed or because they thought  the funds remained with the                                                                    
government.  He thought  the individuals  may choose  to use                                                                    
the program  to ensure the  funds went to  state government.                                                                    
He did not believe there was a way to determine the number.                                                                     
9:20:34 AM                                                                                                                    
Co-Chair Merrick OPENED public testimony.                                                                                       
Co-Chair Merrick CLOSED public testimony.                                                                                       
9:21:03 AM                                                                                                                    
Co-Chair Merrick  asked the department to  review the fiscal                                                                    
Mr. Bigelow provided a brief  summary of the fiscal note. He                                                                    
stated that the  bill would enable Alaskans  to direct their                                                                    
PFD funds to the state's  General Fund during the electronic                                                                    
application  process.  He  detailed  that  the  contribution                                                                    
would  be available  for individuals  filing for  themselves                                                                    
versus individuals  filing on behalf of  another person. The                                                                    
department  expected   the  latter   to  be   excluded.  The                                                                    
department estimated it  would take 150 hours  to modify the                                                                    
online  application  and an  additional  150  hours to  make                                                                    
changes to the "My Info"  portal where Alaskans logged on to                                                                    
view  their application  history  and  status. He  explained                                                                    
that all  of the  hours pertained to  the initial  build and                                                                    
the  PFD  Division  would  absorb   any  ongoing  costs  for                                                                    
administering the program for all subsequent years.                                                                             
Co-Chair Merrick  set an amendment  deadline for March  7 at                                                                    
5:00 p.m.                                                                                                                       
HB 158 was HEARD and HELD in committee for further                                                                              
9:24:03 AM                                                                                                                    
AT EASE                                                                                                                         
9:24:42 AM                                                                                                                    
HOUSE BILL NO. 287                                                                                                            
     "An Act  making an  appropriation for  oil and  gas tax                                                                    
     credits; and providing for an effective date."                                                                             
9:24:54 AM                                                                                                                    
REPRESENTATIVE GEORGE RAUSCHER, SPONSOR, thanked the                                                                            
committee for hearing the legislation. He introduced the                                                                        
bill with prepared remarks:                                                                                                     
     House Bill 287  provides the $60 million  that is still                                                                    
     owed for  the oil tax  credits that were  overlooked in                                                                    
     the  2022 state  budget.  A promise  made  should be  a                                                                    
     promise kept and a statute  written should be a statute                                                                    
     followed. An oversight occurred  for the legislators in                                                                    
     2021  that while  trying to  decide the  proper funding                                                                    
     source for  the oil  tax credits in  the amount  of $60                                                                    
     million,  we ended  the  year with  an  amount owed  to                                                                    
     certain  companies in  the oil  industry that  actually                                                                    
     never got  paid. HB 287  rights that wrong and  pays it                                                                    
     from  the  undesignated   general  funds.  Hundreds  of                                                                    
     millions  of  dollars  were   still  owed  certain  oil                                                                    
     companies their  portion of these oil  tax credits, and                                                                    
     the state had an agreement  to repay them by making our                                                                    
     installments  each year  from  the budget.  As we  move                                                                    
     this state  forward, we must protect  our credit rating                                                                    
     and put confidence back in  our investors by paying our                                                                    
     business partners  what we  owe them  by law,  we'll do                                                                    
     just that.                                                                                                                 
     Last  year we  were  $60 million  short  and by  rights                                                                    
     we're  behind  in  our  payments  today.  HB  287  will                                                                    
     reverse that by paying this overdue note.                                                                                  
Representative Rauscher asked his staff to review the                                                                           
sectional analysis.                                                                                                             
9:27:10 AM                                                                                                                    
RYAN MCKEE, STAFF, REPRESENTATIVE GEORGE RAUSCHER, reviewed                                                                     
the sectional analysis (copy on file):                                                                                          
     Section 1:                                                                                                                 
     This section appropriates  $60,000,000 from the general                                                                    
     fund to the oil and gas tax credit fund (AS 43.55.028)                                                                     
     Section 2:                                                                                                                 
     This section  specifies that the appropriation  made in                                                                    
     section 1 is for the  capitalization of a fund and does                                                                    
     not lapse.                                                                                                                 
     Section 3:                                                                                                                 
     This section  provides that this act  would take effect                                                                    
     immediately under AS 01.10.070(c)                                                                                          
Mr. McKee listed other individuals available online to                                                                          
speak to the bill.                                                                                                              
9:28:11 AM                                                                                                                    
KARA MORIARTY, PRESIDENT AND CEO, ALASKA OIL AND GAS                                                                            
ASSOCIATION (via teleconference), thanked the committee for                                                                     
the opportunity to provide testimony.                                                                                           
     AOGA is the professional  trade association for the oil                                                                    
     and gas industry in Alaska  and we do represent most of                                                                    
     the  companies  exploring,   producing,  refining,  and                                                                    
     transporting oil  and gas resources  in our  state. Our                                                                    
     mission is  to advocate for the  long-term viability of                                                                    
     the  industry  and  one   of  our  organization's  main                                                                    
     priorities   is   to   constantly  advocate   for   the                                                                    
     industry's fiscal  stability and consistency,  which in                                                                    
     this case  includes a long-term payment  of the roughly                                                                    
     $600  million   in  outstanding  liabilities   for  the                                                                    
     refundable tax  credit program,  which has  been stated                                                                    
     has ended, but of course the payments remain.                                                                              
     Just  as a  reminder, the  legislature created  the oil                                                                    
     and  gas  tax  credit  program over  a  decade  ago  to                                                                    
     incentivize  and encourage  small producers  to explore                                                                    
     and  produce  in  Alaska.  To  be  eligible  for  these                                                                    
     credits,  companies  had  to   have  less  than  50,000                                                                    
     barrels  per  day  of  production.  I  always  like  to                                                                    
     clarify     that     companies     like     ExxonMobil,                                                                    
     ConocoPhillips,  and BP  were never  eligible for,  nor                                                                    
     did  they ever  receive these  credits, nor  would they                                                                    
     receive any of the  suggested $60 million appropriation                                                                    
     in the bill before you today.                                                                                              
     Originally  these credits  were not  cashable, but  the                                                                    
     legislature  later  allowed  for direct  cash  payments                                                                    
     after the  program started and  the program  worked. We                                                                    
     had a  number of small  companies that came  to Alaska.                                                                    
     Other existing small  companies and refineries invested                                                                    
     money     in    exploration     projects,    production                                                                    
     enhancements,  and  refining upgrades  and  expansions.                                                                    
     These credits for those  that remember, were originally                                                                    
     designed  to   bring  new  companies  to   Cook  Inlet.                                                                    
     Especially, at a time when  the Southcentral region was                                                                    
     preparing   for   natural   gas  shortages   and   were                                                                    
     conducting  rolling  brownout   drills  throughout  the                                                                    
     Railbelt.  Not   only  did   the  state   benefit  from                                                                    
     investors coming  to Alaska, like Hilcorp  did, to Cook                                                                    
     Inlet ten years  ago, but the state  also obtained data                                                                    
     from  companies  they  would not  have  been  privy  to                                                                    
     before  because   companies  needed  to   provide  that                                                                    
     information to justify the  expenditures to approve the                                                                    
     credits. So,  the state gained  by learning  more about                                                                    
     the resources through these credits.                                                                                       
     As  the credit  program was  no longer  feasible, given                                                                    
     the state's  unfortunate fiscal position  several years                                                                    
     ago,  all of  these  investment-based cashable  credits                                                                    
     for  the North  Slope  and Cook  Inlet were  completely                                                                    
     phased out with  the passage of House Bill  247 in 2016                                                                    
     and House  Bill 111 in  2017. The gas  storage facility                                                                    
     and refinery  credits have also sunset.  This means the                                                                    
     state no  longer offers refundable or  cashable oil and                                                                    
     gas tax  credits. I think  it's also important  to note                                                                    
     that  the money  was spent  by the  companies prior  to                                                                    
     being  eligible for  these credits.  So, the  liability                                                                    
     before you  in this bill  and the remaining  balance is                                                                    
     for  work that  has  long been  done.  While there  are                                                                    
     other entities around the state  that hold these credit                                                                    
     certificates awaiting payment such  as the Interior Gas                                                                    
     Utility, almost  half of my  membership is  impacted by                                                                    
     this  outstanding   balance.  Including   one  in-state                                                                    
     refinery,  Petro   Star,  which   is  a   wholly  owned                                                                    
     subsidiary  of   Arctic  Slope   Regional  Corporation,                                                                    
     explorers like Repsol,  which is a 49  percent owner of                                                                    
     the  Pika Unit,  and  other small  producers like  Blue                                                                    
     Crest, ENI,  Furie, HEX, and  Glacier Oil and  Gas, are                                                                    
     all part of the overall credit liability.                                                                                  
9:33:03 AM                                                                                                                    
Ms. Moriarty continued her prepared remarks:                                                                                    
     I think  the question  today, as you  all know,  is not                                                                    
     whether the  state should have offered  this tax credit                                                                    
     program or not,  but the question is  really should the                                                                    
     state pay the minimum  statutory payment as outlined in                                                                    
     AS  43.55.028 for  the credits  that have  already been                                                                    
     earned. Statewide,  hundreds of millions of  barrels of                                                                    
     oil along  with trillions  of cubic  feet of  gas still                                                                    
     sit in the ground waiting  to be developed. Many by the                                                                    
     very same  companies influenced to  invest here  by the                                                                    
     state's tax credit programs.                                                                                               
     Even  Alaska  focused  companies  rely  on  owners  and                                                                    
     investors from all over the  world and while prices are                                                                    
     certainly higher  today than a  month ago, let  alone a                                                                    
     year ago, the  fact is the industry is  still trying to                                                                    
     come  out  of  the  pandemic.  Our  workforce  has  not                                                                    
     recovered,  and   we  see  more  and   more  companies,                                                                    
     unfortunately,  like  AIG  yesterday,  announcing  that                                                                    
     investors do  not want to  invest now or insure  in the                                                                    
     This   is  an   attempt,  as   Representative  Rauscher                                                                    
     mentioned,  to make  the minimum  payment whole.  As we                                                                    
     know,  there  was an  attempt  to  resolve this  entire                                                                    
     outstanding debt  in 2018  when the  legislature passed                                                                    
     House  Bill 331,  a  bond  program. But  unfortunately,                                                                    
     that  program   was  deemed  unconstitutional   by  the                                                                    
     supreme court and so we  actually had a couple of years                                                                    
     while  we were  waiting for  that court  decision where                                                                    
     the  legislature  did  not fund  anything  at  all.  In                                                                    
     positive news,  the governor  has included  the minimum                                                                    
     statutory payment in  his budget for FY 23.  We at AOGA                                                                    
     recognize  the structural  fiscal  challenges that  the                                                                    
     State of Alaska is facing  and so we are not advocating                                                                    
     for a full immediate payout  of the credits nor for the                                                                    
     credit program to  return. But we do  support the state                                                                    
     funding the  minimum statutory payment and  I know many                                                                    
     of  the  committee members  support  that  as well.  We                                                                    
     thank you for the opportunity to testify today and for                                                                     
     your consideration of this bill.                                                                                           
9:35:21 AM                                                                                                                    
Representative  LeBon referenced  Ms. Moriarty's  mention of                                                                    
the list  of tax  credit holders.  He asked  if there  was a                                                                    
bank holding some of the credits.                                                                                               
Ms.  Moriarty  answered the  state  had  updated its  report                                                                    
earlier in  the year, but she  did not have it  on hand. She                                                                    
stated it was  likely a bank may hold the  credits because a                                                                    
company may have  sold its credits as a  note for financing.                                                                    
She highlighted that  the Department of Revenue  (DOR) had a                                                                    
list of the credit certificate holders.                                                                                         
Representative  LeBon recalled  from  several budget  cycles                                                                    
past  there was  a  bank  holding some  of  the credits.  He                                                                    
explained  the situation  meant a  bank had  secured a  loan                                                                    
with the tax credits and the  borrower was unable to pay the                                                                    
loan back, and  the bank now owned the  credits. He stressed                                                                    
that it was not a success.                                                                                                      
9:36:56 AM                                                                                                                    
Representative Wool  thought Ms.  Moriarty likely  could not                                                                    
share  the companies  waiting for  payment.  He mentioned  a                                                                    
past  document  the  committee had  received  showing  prior                                                                    
credits  paid. He  detailed it  was possible  to interpolate                                                                    
about some  of the  companies on the  list. For  example, he                                                                    
believed there  were likely some natural  gas developers and                                                                    
providers from  Cook Inlet.  He asked  if his  statement was                                                                    
Ms. Moriarty confirmed there were  natural gas developers in                                                                    
Cook  Inlet  that  earned  the credits.  She  did  not  know                                                                    
whether  the specific  developers  had been  paid what  they                                                                    
were  owed. She  stated  that DOR  maintained  the list  and                                                                    
published it annually. She did not have the list on hand.                                                                       
Co-Chair  Foster   stated  in   the  past  there   had  been                                                                    
significant focus  on some of  the companies being  from out                                                                    
of state as  opposed to Alaskan. He pointed out  that in the                                                                    
current year  there had  been at  least one  Alaskan company                                                                    
come to  legislative offices to  let legislators  know there                                                                    
were Alaskan companies on the list.                                                                                             
9:38:20 AM                                                                                                                    
Representative Josephson asked if  any AOGA members had ever                                                                    
indicated a preference on the  payment source from the state                                                                    
Ms.  Moriarty  replied that  AOGA  members  did not  have  a                                                                    
preference in regard to the  fund source. She understood the                                                                    
funding  source had  been part  of the  debate the  previous                                                                    
year when the  legislature had been trying  to determine how                                                                    
to  get the  credits paid.  She informed  members that  AOGA                                                                    
recognized and  appreciated the intent [to  pay the credits]                                                                    
was there.                                                                                                                      
Co-Chair Merrick stated she had  offered an amendment in the                                                                    
past to  pay the  credits in  full, from  the Constitutional                                                                    
Budget  Reserve (CBR).  She asked  about  the rationale  for                                                                    
paying the credits at present versus the previous year.                                                                         
Representative   Rauscher   recalled  the   difficulty   the                                                                    
legislature had  trying to  get the  $60 million  in credits                                                                    
paid the previous year. He  detailed that paying the credits                                                                    
had  bounced back  and  forth  between different  ideologies                                                                    
over  the  funding  source. He  explained  that  the  chosen                                                                    
funding  source  had  ultimately  been the  CBR,  which  had                                                                    
caused  a problem  because many  House members  believed the                                                                    
CBR  was a  savings account  that had  been robbed  from $17                                                                    
billion down to  $1.5 billion and lower.  He elaborated that                                                                    
those members  also believed that  the money taken  from the                                                                    
CBR  was  never paid  back  as  it  should be  according  to                                                                    
statute. He  believed the difference in  ideologies over the                                                                    
CBR fund  source had caused the  payment to not be  made. He                                                                    
believed  there had  been  an  idea that  there  would be  a                                                                    
correction on  the Senate side,  but that had  not occurred.                                                                    
He speculated using the CBR as  the fund source may pose the                                                                    
same problem  in the current  year. He explained it  was the                                                                    
reason he  had selected  a different  funding source  in the                                                                    
proposed legislation.                                                                                                           
9:41:15 AM                                                                                                                    
Co-Chair  Merrick asked  if the  ideology  was that  keeping                                                                    
money in savings was more of  a priority than paying the tax                                                                    
Representative  Rauscher  disagreed  with the  phrasing.  He                                                                    
believed  if   the  state  had   a  checking   account  with                                                                    
sufficient funding to pay, it  should be used as the funding                                                                    
source  instead  of a  savings  account  that had  not  been                                                                    
repaid as specified by law.                                                                                                     
Vice-Chair  Ortiz stated  his understanding  the bill  would                                                                    
provide a  makeup payment for  the [FY] 22 payment  that had                                                                    
not been made.  He remarked that the $60  million funding in                                                                    
the governor's  budget was the  FY 23 payment. He  asked for                                                                    
verification the  intent of the  bill was to makeup  for the                                                                    
payment that had not been paid the previous year.                                                                               
Representative Rauscher  confirmed the  funding in  the bill                                                                    
made up for a payment that had  never been made in FY 22. He                                                                    
clarified that the funding in  the governor's budget was for                                                                    
the FY 23 payment.                                                                                                              
9:43:28 AM                                                                                                                    
Co-Chair Merrick remarked that  Co-Chair Foster noted the FY                                                                    
23  operating  budget  contained  $199 million  to  pay  the                                                                    
Representative Wool  noted that  the committee had  put some                                                                    
time  into  oil  and  tax  credits  the  previous  year.  He                                                                    
believed  for   the  most  part,  the   committee  had  been                                                                    
supportive of  the concept.  He recalled  that at  one point                                                                    
the  funding   would  have   come  from   Alaska  Industrial                                                                    
Development  and Export  Authority (AIDEA)  reserves and  he                                                                    
believed an  amendment proposed by Representative  LeBon had                                                                    
ultimately passed. He stated that at  the end of the day the                                                                    
committee  wanted   to  pay  the  credits.   He  stated  the                                                                    
legislature had  drawn from the  CBR on  multiple occasions.                                                                    
He recognized  that technically  the CBR  was owed  over $10                                                                    
billion. He referenced Ms.  Moriarty's testimony that credit                                                                    
holders did not care where the  funds came from. He had been                                                                    
somewhat surprised  that many people  had voted  against the                                                                    
bill on  the floor the past  year. He pointed out  that some                                                                    
of  the  companies  were  Alaskan,  some  were  natural  gas                                                                    
companies in Cook  Inlet, and some employ  many Alaskans. He                                                                    
highlighted the  Statutory Budget Reserve (SBR)  was another                                                                    
savings account  that had been used  in the past to  pay the                                                                    
PFD. He asked  if the same ideological  issue existed around                                                                    
the SBR as with the CBR.                                                                                                        
9:45:37 AM                                                                                                                    
AT EASE                                                                                                                         
9:47:43 AM                                                                                                                    
Representative  Wool  clarified  his previous  question.  He                                                                    
explained there  had been  objection to  paying the  oil tax                                                                    
credits  from the  CBR the  previous year.  He recalled  the                                                                    
majority of  the House Finance Committee  members had wanted                                                                    
to pay  the credits. He  asked if  there would be  a savings                                                                    
account problem if the funds were  taken from the SBR in the                                                                    
future. He  noted things had been  paid from the SBR  in the                                                                    
Representative Rauscher answered that  he had not considered                                                                    
the idea.  He did not  know the  current balance of  the SBR                                                                    
and did not  know what was funded by the  SBR in the current                                                                    
budget. He  did not  have enough  information to  answer the                                                                    
question currently, but he would follow up.                                                                                     
Representative  Carpenter directed  a  question  to DOR.  He                                                                    
understood there  was a  forthcoming spring  revenue update.                                                                    
He  stated his  understanding  that oil  prices and  revenue                                                                    
were  up.  He  stated  the  legislature  could  continue  to                                                                    
posture about what  had taken place in the past  or it could                                                                    
ask  whether there  was sufficient  funding  in the  General                                                                    
Fund with  higher prices  of oil to  pay debts  from general                                                                    
funds. Alternatively,  he wondered  whether debts  needed to                                                                    
be paid from savings due to insufficient general funds.                                                                         
9:50:03 AM                                                                                                                    
COLLEEN  GLOVER,  DIRECTOR,   TAX  DIVISION,  DEPARTMENT  OF                                                                    
REVENUE (via  teleconference), replied that the  funding and                                                                    
the  budget was  not  really a  Tax  Division question.  She                                                                    
detailed that  DOR had published a  revised forecast showing                                                                    
general fund receipts were expected  to be much higher in FY                                                                    
22 than  projected in  the fall  forecast. She  believed the                                                                    
question pertaining  to the budget could  be better answered                                                                    
perhaps by the Office of Management and Budget.                                                                                 
Representative Carpenter  asked if there was  $60 million in                                                                    
additional revenue in excess of  the amount projected in the                                                                    
fall  forecast that  could be  used  to pay  debts from  the                                                                    
previous year.                                                                                                                  
Ms. Glover replied affirmatively.  She encouraged members to                                                                    
look at  projections from mid-February  on the  DOR website.                                                                    
She reported that updated  cashflows projected additional FY                                                                    
22 General Fund revenues of $572 million.                                                                                       
Representative Carpenter  stated the  philosophical question                                                                    
was whether to  pay the state's debts from  the General Fund                                                                    
or  savings account.  He reasoned  the state  had plenty  of                                                                    
money to pay the debt from the General Fund.                                                                                    
Representative  LeBon clarified  that he  had supported  the                                                                    
amendment to  pay the  $60 million  out of  the CBR,  but he                                                                    
believed the  co-chair had offered  the amendment.  He asked                                                                    
if it  was inappropriate  for a member  of the  committee to                                                                    
amend HB 287 to pay the $60 million from the CBR.                                                                               
Representative Rauscher  replied that he did  not oppose the                                                                    
option; however,  it had  not worked the  last time.  He was                                                                    
trying  to eliminate  the possibility  of treading  the same                                                                    
ground over  and getting the  same result. He  referenced an                                                                    
earlier  comment   he  had  made  that   the  previous  year                                                                    
legislators who had  voted against the use of  the CBR funds                                                                    
had relied  on the Senate to  come up with a  fix, which had                                                                    
not occurred.  He stated  he had  used the  word "oversight"                                                                    
related  to  the Senate.  He  apologized  for any  potential                                                                    
misunderstanding about his remark.                                                                                              
9:53:27 AM                                                                                                                    
Representative LeBon  directed a  question to  Ms. Moriarty.                                                                    
He  highlighted that  the FY  23  budget currently  included                                                                    
almost $200  million for oil  and gas tax credits.  He asked                                                                    
if  the industry  believed the  dollar  amount included  the                                                                    
missing $60 million from FY 22.                                                                                                 
Ms.  Moriarty   answered  that  the  $199   million  in  the                                                                    
governor's FY 23  budget was the minimum  calculation for FY                                                                    
23 and did not include the unfunded $60 million from FY 22.                                                                     
Co-Chair Foster  stated his  understanding that  the minimum                                                                    
amount could increase  because it was driven  by formula. He                                                                    
explained that  if the numbers  in the spring  forecast were                                                                    
higher than the  fall forecast, the amount owed  for oil tax                                                                    
credits in FY  23 could potentially be much  higher than the                                                                    
$199  million currently  in the  operating budget.  He asked                                                                    
Ms. Glover if his understanding was accurate.                                                                                   
Ms. Glover answered that the  formula was based on projected                                                                    
production   tax  revenue.   She  explained   that  as   the                                                                    
department  was projecting  increased tax  revenue it  would                                                                    
[increase the amount in credits  owed]. She relayed that the                                                                    
current  projections, released  mid-February, were  shown on                                                                    
the department's  website. She  elaborated that  the updated                                                                    
number for the FY 23 tax  credits owed was $263 million. She                                                                    
informed  the committee  that the  number could  potentially                                                                    
increase under the upcoming spring forecast.                                                                                    
9:56:11 AM                                                                                                                    
Vice-Chair Ortiz asked if including  the $60 million for the                                                                    
amount owed from the previous year  in addition to the FY 23                                                                    
amount owed  for tax credits  in the operating  budget would                                                                    
accomplish the intent of HB 287.                                                                                                
Representative Rauscher agreed.                                                                                                 
Representative Carpenter  stated his understanding  that any                                                                    
formulaic increase in the amount  owed due to an increase in                                                                    
revenue would  only apply  to the  statutory minimum  for FY                                                                    
23. He asked  for verification the increase  would not apply                                                                    
to the amount owed from the past year.                                                                                          
Ms. Glover answered  that the statutory formula  was for the                                                                    
appropriation  and  the  appropriation  amount  was  at  the                                                                    
legislature's  discretion.  She  explained  it  was  at  the                                                                    
legislature's  discretion to  choose to  add $60  million on                                                                    
top of  the amount  owed based on  the spring  forecast. She                                                                    
referred to a  letter mentioned earlier in  the meeting that                                                                    
had been provided to the  legislature the previous month and                                                                    
showed the  current outstanding tax credit  balance at about                                                                    
$565 million.                                                                                                                   
Representative  Carpenter stated  his understanding  that if                                                                    
there  was  a larger  number  for  FY  23 tax  credits,  the                                                                    
legislature would  still have  to appropriate  an additional                                                                    
$60 million to cover the past year's shortfall.                                                                                 
Ms.  Glover replied  affirmatively. She  explained that  the                                                                    
formula for  FY 23 only included  the amount for FY  23. She                                                                    
highlighted the  $263 million  owed for FY  23 based  on the                                                                    
updated February  numbers and detailed that  the $60 million                                                                    
would  need to  be added  to the  figure if  the legislature                                                                    
wanted to make up the funds from the previous year.                                                                             
Representative  Carpenter  asked  Ms. Moriarty  if  industry                                                                    
cared  how   the  credits   were  paid   via  HB   287,  the                                                                    
supplemental budget, or the current budget bill.                                                                                
9:59:44 AM                                                                                                                    
Ms. Moriarty replied  in the negative. The  industry did not                                                                    
have  a   preference  related  to  the   funding  source  or                                                                    
mechanism.  She   explained  that  the  industry   had  long                                                                    
advocated  for  the  minimum statutory  amount  to  be  paid                                                                    
Co-Chair  Foster  provided  a   summary  pertaining  to  the                                                                    
payments owed.  He detailed that  the $60 million for  FY 22                                                                    
was set;  therefore, even if  prices were up in  the current                                                                    
year, it  did not mean the  FY 22 number would  increase. He                                                                    
elaborated  that the  current committee  substitute for  the                                                                    
operating  budget included  the governor's  original request                                                                    
of $199  million for  FY 23. Once  the spring  forecast came                                                                    
out  in  mid-March, any  member  could  choose to  offer  an                                                                    
amendment  either  in  committee   or  on  the  House  floor                                                                    
(depending on the  location of the budget  bill) to increase                                                                    
the  number from  $199 million  to  $263 million.  Likewise,                                                                    
legislators could also offer an  amendment to bump up the FY                                                                    
23 amount to account for the $60 million.                                                                                       
Representative LeBon asked Ms.  Glover for the current value                                                                    
of the CBR.                                                                                                                     
Ms.  Glover responded  that  she would  follow  up with  the                                                                    
Representative LeBon  replied that it was  not necessary for                                                                    
Ms. Glover to follow up  with the information. He referenced                                                                    
earlier comments made  by Representative Rauscher indicating                                                                    
there had been  some voter remorse by  some legislators (who                                                                    
had voted against the CBR draw  to pay the tax credits) over                                                                    
the expectation  that the Senate  would fix the oil  and gas                                                                    
tax credits payment.                                                                                                            
Representative  Rauscher  thought Representative  LeBon  was                                                                    
reading more into the statements  he had made previously. He                                                                    
believed  the vote  likely expected  the Senate  to fix  the                                                                    
situation. He  was not certain where  Representative LeBon's                                                                    
word  "remorse" came  from and  did not  believe it  fit. He                                                                    
added  that he  agreed with  part of  Representative LeBon's                                                                    
Representative  LeBon stated  that he  had supported  paying                                                                    
the $60  million in  credits from  the CBR  in the  past. He                                                                    
understood  it had  not been  the  preferred funding  source                                                                    
because it  had failed on  the House floor.  He communicated                                                                    
his preference and support for  returning the funding source                                                                    
to the CBR.                                                                                                                     
10:03:28 AM                                                                                                                   
CAROLINE SCHULTZ,  POLICY ANALYST, OFFICE OF  MANAGEMENT AND                                                                    
BUDGET, OFFICE OF  THE GOVERNOR, answered that  based on the                                                                    
DOR  forecast  that  had  been   updated  in  February,  the                                                                    
estimated CBR end  balance for FY 23 was  about $1.9 billion                                                                    
and $2.9 billion in FY 24.                                                                                                      
Representative  Josephson  asked  what  made  the  projected                                                                    
numbers grow from $1.9 billion to $2.9 billion.                                                                                 
Ms.  Schultz   answered  a   considerable  reason   for  the                                                                    
projected  growth  was   the  increased  revenue  projection                                                                    
included  in the  February numbers.  She  reported that  the                                                                    
revenue projection  had increased from the  fall forecast by                                                                    
approximately $1 billion. She  elaborated that given the CBR                                                                    
estimate was based on the  governor's budget, the $1 billion                                                                    
increase  in  revenue  was   functionally  projected  to  be                                                                    
deposited into the CBR.                                                                                                         
Representative Josephson  asked if  it was because  until it                                                                    
was  allocated  somewhere  else,   it  would  be  swept.  He                                                                    
surmised it  assumed the legislature  would leave  the funds                                                                    
in  the  General  Fund  because   the  legislature  had  not                                                                    
communicated otherwise.                                                                                                         
Ms. Schultz agreed.                                                                                                             
Co-Chair  Merrick thanked  Representative  Rauscher for  his                                                                    
HB  287  was  HEARD  and   HELD  in  committee  for  further                                                                    
10:05:30 AM                                                                                                                   
AT EASE                                                                                                                         
10:13:50 AM                                                                                                                   
HOUSE BILL NO. 246                                                                                                            
     "An Act restricting the release of certain records of                                                                      
    convictions; and providing for an effective date."                                                                          
10:13:54 AM                                                                                                                   
REPRESENTATIVE   JONATHAN   KREISS-TOMKINS,   SPONSOR   (via                                                                    
teleconference),  introduced the  legislation that  aimed to                                                                    
reflect  the new  law  and consensus  in  Alaska around  the                                                                    
decriminalization of  marijuana and removed  the convictions                                                                    
of  simple   marijuana  possession  from  public   view.  He                                                                    
reported  that the  legislation had  attracted support  from                                                                    
both sides  of the  isle and his  office had  worked closely                                                                    
with the administration. He believed  it was a timely policy                                                                    
change to  make, especially  as the  state settled  into the                                                                    
new post-marijuana decriminalization.                                                                                           
10:15:44 AM                                                                                                                   
CLAIRE   GROSS,  STAFF,   REPRESENTATIVE  JONATHAN   KREISS-                                                                    
TOMKINS, explained  the bill had  two distinct  parts, which                                                                    
addressed the two primary ways  employers and members of the                                                                    
public access  criminal justice  information in  Alaska. The                                                                    
first  part  pertained  to  the  Alaska  Court  System.  She                                                                    
highlighted  that  the  two parts  were  separate,  one  was                                                                    
automatic  and the  other required  a petition  process. She                                                                    
detailed that  the court  system would  automatically remove                                                                    
the very  specific type of  minor marijuana  conviction from                                                                    
CourtView  at no  cost. She  noted the  department would  be                                                                    
able to  absorb the  cost. The  bill applied  to convictions                                                                    
where  a person  was convicted  for less  than one  ounce of                                                                    
marijuana, they  were 21 years of  age or older at  the time                                                                    
of the  offense, and  they were not  convicted of  any other                                                                    
criminal charges  in that case.  She explained  the specific                                                                    
convictions  had   been  selected  due  to   some  CourtView                                                                    
technology  protocol requirements.  She explained  the court                                                                    
system  could not  take one  charge or  conviction out  of a                                                                    
case on  CourtView, it had to  process one entire case  at a                                                                    
Ms.  Gross   addressed  the  second  portion   of  the  bill                                                                    
pertaining  to the  Department of  Public Safety  (DPS). She                                                                    
detailed  that DPS  maintained and  worked  from the  Alaska                                                                    
Public  Safety  Information  Network (APSIN)  database.  She                                                                    
explained that  employers could use  the APSIN  database for                                                                    
formal background  checks. For example, the  system could be                                                                    
accessed by employers outside the  state, for jobs requiring                                                                    
state  licensure,  for  people   applying  to  work  in  law                                                                    
enforcement, and  other. She  elaborated that  any employers                                                                    
could  request  an  "any  persons"   report  from  DPS.  She                                                                    
explained that  individuals with  past convictions  that met                                                                    
the aforementioned  requirements could petition DPS  to have                                                                    
the   specific  information   in  their   background  checks                                                                    
shielded  from  view.  She clarified  that  the  information                                                                    
would   not  be   officially  sealed,   but  shielding   the                                                                    
information was functionally the  same thing. She noted that                                                                    
any member of the criminal  justice system would continue to                                                                    
have access to the information.                                                                                                 
Ms.  Gross  relayed  that  DPS   would  need  one  full-time                                                                    
employee for  one year at  a cost of  approximately $100,000                                                                    
in  order  to   work  through  the  cases   and  respond  to                                                                    
petitions. She reported there was  some cost associated with                                                                    
updating  the  APSIN  software to  access  the  records  and                                                                    
shield them from view.                                                                                                          
10:20:18 AM                                                                                                                   
Representative  Josephson asked  if it  would be  a friendly                                                                    
amendment  if the  bill  covered  18 to  20  year olds  even                                                                    
though  the  law  did  not  protect  their  right  to  smoke                                                                    
Ms.  Gross replied  that the  bill aimed  to address  things                                                                    
that Alaskans  had determined  were no  longer a  crime. She                                                                    
stated the  problem with including  people under the  age of                                                                    
21 was  it was still  a crime  in Alaska; therefore,  it was                                                                    
not something  the sponsor's office  wanted included  in the                                                                    
Representative  Josephson noted  he  would like  to ask  the                                                                    
court system a question at some point.                                                                                          
Co-Chair Merrick replied affirmatively.                                                                                         
Representative LeBon stated  in his "banking days"  he had a                                                                    
customer  that required  drug (including  marijuana) testing                                                                    
for  his employees  due to  the nature  of his  business. He                                                                    
asked  if   the  employer  should  know   about  a  person's                                                                    
background and  use of  marijuana when  going into  a hiring                                                                    
process  where a  company policy  was in  place to  test for                                                                    
marijuana use  (whether the  use of  marijuana was  legal or                                                                    
Ms.  Gross replied  that under  the legislation,  the answer                                                                    
was no.  She reasoned that  being high  at a job  or testing                                                                    
positive for marijuana  at a job where it  was not allowable                                                                    
was a different situation than a past minor conviction.                                                                         
10:22:24 AM                                                                                                                   
Representative LeBon appreciated the  answer. He asked if it                                                                    
would be  fair for an employer  to ask a future  employee if                                                                    
they had  a prior legal  conviction or incident of  use when                                                                    
the employer  had told  the future  employee there  would be                                                                    
testing going forward.                                                                                                          
Ms. Gross asked for clarification on the question.                                                                              
Representative LeBon  was trying  to think the  bill through                                                                    
from  the perspective  of  a private  employer  with a  drug                                                                    
testing program due to the nature  of the work where a sober                                                                    
workforce  was  important.  He  asked  if  it  was  relevant                                                                    
information  for  the  hiring   process  to  know  about  an                                                                    
applicant's  past  or  to  provide  notice  to  a  potential                                                                    
employee the  business would be  testing for  marijuana use.                                                                    
He remarked that his comment was  more of a statement than a                                                                    
10:23:49 AM                                                                                                                   
Vice-Chair Ortiz  asked if he  was correct  in understanding                                                                    
that  for  persons under  the  age  of  18 nothing  about  a                                                                    
person's criminal record ever met public view.                                                                                  
Ms. Gross deferred the question to the court system.                                                                            
NANCY MEADE, GENERAL COUNSEL,  ALASKA COURT SYSTEM, answered                                                                    
that if someone under the age  of 18 was accused of a crime,                                                                    
the  Division  of  Juvenile Justice  generally  handled  the                                                                    
case.  She  elaborated that  the  proceedings  were part  of                                                                    
juvenile delinquency,  and the cases were  confidential. She                                                                    
explained   that  the   court  system   did  not   file  the                                                                    
information  on CourtView  and generally  people other  than                                                                    
law enforcement did not have access to the information.                                                                         
Vice-Chair  Ortiz stated  his understanding  that under  the                                                                    
legislation, people between the ages  of 18 and 21 would not                                                                    
be  protected  and  their  records   would  continue  to  be                                                                    
available in the current form.  He asked if the court system                                                                    
would  be  averse  to  providing an  avenue  to  shield  the                                                                    
records for the specific age group.                                                                                             
10:26:45 AM                                                                                                                   
Ms. Mead  answered that  the court system  would not  take a                                                                    
position  on a  policy  call made  by  the legislature.  For                                                                    
example, several  years back,  the legislature  decided that                                                                    
minor  consuming   alcohol  cases   should  not   appear  on                                                                    
CourtView  if  they were  not  charged  with other  criminal                                                                    
cases (because  of the limitations  on how the  court system                                                                    
could and  could not  post things  on CourtView).  The court                                                                    
system followed  the policy and minor  consuming charges for                                                                    
individuals  under  the  age  of   21  were  not  posted  on                                                                    
CourtView. She relayed the court  system would be able to do                                                                    
the same  for marijuana use if  it was the policy  call made                                                                    
by the legislature.                                                                                                             
Representative  Josephson stated  he had  come to  have more                                                                    
sensitivity  about the  court's  rights  over CourtView  and                                                                    
whether it  exists at all  because the tool belonged  to the                                                                    
court  system,  not  the   legislature.  He  considered  the                                                                    
scenario  where  the  bill passed  and  directed  the  court                                                                    
system to  do or  not do certain  things with  CourtView. He                                                                    
asked  if it  would  be viewed  by the  court  system as  an                                                                    
encroachment on its jurisdiction.                                                                                               
Ms.  Mead   appreciated  the  sensitivity.  She   stated  it                                                                    
depended on the level of  the infringement on CourtView. She                                                                    
detailed  that   CourtView  was  the  court   system's  case                                                                    
management  system and  the  court  made numerous  decisions                                                                    
about the  database as its  own policy. She  elaborated that                                                                    
starting in 2015 the legislature  required any criminal case                                                                    
ending  in  dismissal  or  acquittal   to  be  removed  from                                                                    
CourtView. She informed  the committee it had  been a strong                                                                    
policy at  the time.  She expounded  that the  supreme court                                                                    
had  not   simultaneously  considered  the  same   sorts  of                                                                    
policies  and  the  court  system did  not  consider  it  an                                                                    
infringement because it had been easy  to do and there was a                                                                    
strong view  on the part  of the legislature that  it should                                                                    
happen. She explained that the  current bill would be worded                                                                    
fairly similarly and globally  the court system could remove                                                                    
things from CourtView if the  legislature desired. She noted                                                                    
it was not currently an  issue the supreme court was focused                                                                    
on. She remarked it would  be different if the supreme court                                                                    
was in  the midst of  considering changes to CourtView  in a                                                                    
more global manner or wanted  to make a review of everything                                                                    
on or  off of the  database. She explained that  during that                                                                    
time  period  she  may  have a  different  reaction  to  the                                                                    
legislature  stepping in  and making  some of  the decisions                                                                    
being considered by the court.                                                                                                  
Representative  Josephson asked  if the  court system  could                                                                    
decide it no longer wanted to have the CourtView system.                                                                        
Ms. Mead answered affirmatively.                                                                                                
10:30:23 AM                                                                                                                   
Representative LeBon  remarked that Alaska was  not the only                                                                    
state to legalize  the use of marijuana. He asked  if it was                                                                    
a trend among other states  that had legalized marijuana use                                                                    
to clear the court records of  prior use as described in the                                                                    
Ms. Mead replied that Ms. Gross had data on the topic.                                                                          
Ms. Gross  replied that  the majority  of other  states that                                                                    
had legalized  marijuana had enacted a  much broader version                                                                    
of something  like HB 246.  She explained that  other states                                                                    
were excusing felonies and  reducing charges. She elaborated                                                                    
that  many states  that had  [the legalization  of marijuana                                                                    
on] a  ballot initiative  had included the  changes [similar                                                                    
to those  proposed in the  current bill]  automatically. She                                                                    
stated that  Alaska was behind  the times compared  to other                                                                    
states. She added  that the majority of states  that had not                                                                    
legalized  marijuana had  taken  some type  of  step in  the                                                                    
direction taken by the bill.                                                                                                    
Representative LeBon  was interested in a  summary of states                                                                    
that had backed off of  the reporting and had cleared record                                                                    
to understand how far behind Alaska was.                                                                                        
10:31:52 AM                                                                                                                   
Representative  Wool asked  about  individuals convicted  of                                                                    
minor marijuana  crimes and not  charged with  another crime                                                                    
in the  same incident. He had  heard in the past  there were                                                                    
not many standalone marijuana  crimes. He understood dealing                                                                    
and cultivation were likely not minor crimes.                                                                                   
Ms. Mead clarified  that the bill looked at  people who were                                                                    
not  convicted  of  any  other  charges  in  the  case.  She                                                                    
explained  that other  charges may  have been  filed in  the                                                                    
case. Under  the legislation, the court  system would remove                                                                    
from CourtView, cases where possession  of under an ounce of                                                                    
marijuana was the  sole conviction in the  case. She relayed                                                                    
the estimated  number of  cases that  would be  removed from                                                                    
CourtView  was somewhere  between 700  and 1,000.  She added                                                                    
that  defendants needed  to be  over  21 years  of age.  She                                                                    
noted that the bill had  been around in different iterations                                                                    
brought by  different legislators in the  past. She detailed                                                                    
that  in the  past  there  had been  a  question about  what                                                                    
happened  in cases  where  a person  had  been charged  with                                                                    
other things  and it had  been dealt down to  marijuana. The                                                                    
court  system had  been asked  for the  number of  the cases                                                                    
with  no  other charges.  The  court  system had  found  the                                                                    
number to  be approximately half  with other charges  in the                                                                    
case. She  clarified that the  current bill only  applied to                                                                    
cases where there  were no other convictions  apart from the                                                                    
marijuana charge.  She relayed  that the court  system could                                                                    
count the specific cases readily.                                                                                               
10:34:05 AM                                                                                                                   
Ms.  Gross explained  that  DPS and  the  court system  were                                                                    
working  from  different  numbers because  they  did  things                                                                    
differently  and had  different constraints  related to  how                                                                    
the  data was  originally stored.  She explained  the number                                                                    
was very different  from the DPS side,  which had identified                                                                    
8,500  records   in  the   state's  criminal   case  history                                                                    
repository. She elaborated that some  of the people had died                                                                    
and some  of the people accounted  for more than one  of the                                                                    
convictions.   She   believed    when   factoring   in   the                                                                    
information, the  number of actual people  who would benefit                                                                    
from the legislation was around 8,000.                                                                                          
Representative Wool  stated his understanding that  the bill                                                                    
applied  to   minor  marijuana  crimes  without   any  other                                                                    
convictions  attached. He  asked for  verification that  the                                                                    
only charge seen  on CourtView was the  marijuana charge and                                                                    
it included no other crimes such as a DUI.                                                                                      
Ms.  Mead clarified  that it  was the  only conviction  that                                                                    
would be seen on CourtView.  She explained that a person may                                                                    
have  been originally  charged with  four  things, but  only                                                                    
convicted on the marijuana charge.                                                                                              
Representative Wool referenced  Ms. Mead's earlier statement                                                                    
that minor  consumption of alcohol  cases (below the  age of                                                                    
21) were  not listed on  CourtView. He asked if  the charges                                                                    
associated with  minor consumption  of alcohol  or marijuana                                                                    
were similar.                                                                                                                   
Ms. Mead replied, "No." She  elaborated that minor consuming                                                                    
alcohol was a minor offense  and not considered a crime. She                                                                    
explained  that  the  offense was  a  violation  carrying  a                                                                    
ticket cost of  $500. Individuals had the  ability to reduce                                                                    
the  fine  to $250  if  they  did  a certain  training.  She                                                                    
clarified  that possession  of marijuana  was still  a crime                                                                    
for individuals  under the  age of  21. She  elucidated that                                                                    
the possession of  marijuana was still a crime  on the books                                                                    
under Title  11 for individuals over  the age of 21,  but it                                                                    
was  a defense  for  individuals  over 21  years  of age  in                                                                    
possession of one ounce.                                                                                                        
10:37:49 AM                                                                                                                   
Representative Wool  asked for  verification that  under the                                                                    
bill,  individuals aged  18 up  to 21  who were  caught with                                                                    
possession  of   marijuana  would  not  have   their  record                                                                    
Ms. Mead  confirmed that the  court system would  not review                                                                    
those cases from CourtView.                                                                                                     
Co-Chair  Merrick  asked  Ms.   Mead  to  review  the  court                                                                    
system's fiscal note.                                                                                                           
Ms.  Mead reviewed  the department's  zero fiscal  note. She                                                                    
detailed  that the  court system  intended  to identify  the                                                                    
specified cases  and already had  a fairly global  list. The                                                                    
department would  remove cases  that contained  conduct that                                                                    
fell under  the bill from  CourtView. She reported  that the                                                                    
bill sponsor  agreed to  a delayed  effective date  to allow                                                                    
time for  the court system  to implement the  change without                                                                    
additional resources.  She noted that making  the removal of                                                                    
the  cases  automatic  instead  of  via  petition  had  been                                                                    
selected because  it did  not require  additional resources.                                                                    
She cautioned there may be  a small number of errors because                                                                    
sometimes  the court  system could  identify the  cases that                                                                    
came  in under  the particular  subsection of  possession of                                                                    
under  one ounce  of marijuana,  in addition  to a  person's                                                                    
birthdate  and offence  date. She  explained that  sometimes                                                                    
the  prosecuting   authority  did  not  provide   a  precise                                                                    
subsection  and   provided  a  more  global   charge  (e.g.,                                                                    
11.71.060   without   specifying  which   subsection).   She                                                                    
clarified   that  the   particular   cases   would  not   be                                                                    
automatically  removed from  CourtView because  they contain                                                                    
conduct other than that described  in Section 4 of the bill.                                                                    
Under  the particular  circumstances, the  court system  may                                                                    
miss someone  in the automatic  process. She  explained that                                                                    
the person  would be able to  fill out a form  to notify the                                                                    
court system  they were improperly  on CourtView.  The court                                                                    
system staff  would have to  assess the  cases individually.                                                                    
She noted that  if the system was flooded  with forms, there                                                                    
may be some  sort of fiscal impact in the  future. She added                                                                    
she did not foresee it being an issue.                                                                                          
10:40:25 AM                                                                                                                   
Representative  Josephson asked  for  verification that  the                                                                    
change  would not  prevent law  enforcement from  knowing an                                                                    
entire history  of unconvicted charges if  they were looking                                                                    
for pattern  and practice,  proper propensity  evidence, and                                                                    
MO evidence.                                                                                                                    
Ms.  Mead  answered  that  law  enforcement  should  not  be                                                                    
relying  on  CourtView  for   access  to  official  criminal                                                                    
records in any  event. She noted that  law enforcement would                                                                    
be  impacted by  Sections 1  through 3  of the  legislation,                                                                    
which  did not  pertain  to CourtView.  She  noted that  law                                                                    
enforcement  would still  have full  access to  the records.                                                                    
Sections 1 through 3 would  only shield the records from the                                                                    
"any persons" requests.                                                                                                         
10:41:23 AM                                                                                                                   
Co-Chair Merrick  asked the Department  of Public  Safety to                                                                    
review its fiscal note.                                                                                                         
KELLY  HOWELL,   SPECIAL  ASSISTANT  TO   THE  COMMISSIONER,                                                                    
DEPARTMENT OF  PUBLIC SAFETY, relayed  that DPS,  through an                                                                    
analysis  of  the  records contained  in  APSIN,  identified                                                                    
approximately   8,500    records   that    were   standalone                                                                    
convictions as  classified in the bill.  She elaborated that                                                                    
because DPS could  not estimate how many  of the individuals                                                                    
would  come  forward  to request  that  the  information  be                                                                    
prohibited  from disclosure,  DPS  would request  to hire  a                                                                    
temporary  position to  enable the  department to  deal with                                                                    
the incoming  requests and  to proactively  research records                                                                    
in order  to expedite requests from  individuals to prohibit                                                                    
the  information  from   disclosure  in  certain  background                                                                    
reports. The  department would request  $184,200 UGF  in the                                                                    
first  year to  cover  personal services  and the  necessary                                                                    
programming  changes to  APSIN  to prohibit  release of  the                                                                    
information. The cost  in the second year  would be $121,200                                                                    
in personal  services costs for the  position and associated                                                                    
overhead costs.                                                                                                                 
10:43:40 AM                                                                                                                   
Representative Josephson  asked for  the reason  between the                                                                    
difference  in the  700  to 1,000  cases  [projected by  the                                                                    
court system] and the 8,000 [projected by DPS].                                                                                 
Ms. Mead  replied that the  court system was  counting cases                                                                    
that  were  filed  under  the  specific  subsection  of  the                                                                    
illegal  marijuana   law  (AS  11.71.060)   specifying  that                                                                    
possessing under  one ounce  of the  substance was  a crime.                                                                    
She clarified  that if the  case came into the  court system                                                                    
charging  AS  11.71.060(a)(2)(a),  the  court  system  would                                                                    
remove the  case, given it  was the conduct the  bill wanted                                                                    
shielded  from CourtView.  She elaborated  that the  law had                                                                    
changed a  number of times  over the years. For  example, in                                                                    
the  1980s the  marijuana  possession law  specified it  was                                                                    
legal to  possess up to half  a pound of the  substance. She                                                                    
detailed  if the  court system  had  a case  in its  records                                                                    
where a person  had been convicted for  possessing over half                                                                    
a pound, the case would  not be removed from CourtView under                                                                    
the  legislation  because  the   person  may  have  been  in                                                                    
possession of seven ounces. She  expounded that a person may                                                                    
come forward requesting  the department to look  at the case                                                                    
if  they had  only been  convicted of  possessing up  to one                                                                    
ounce.  She  explained  the  case  would  be  removed  [from                                                                    
CourtView]  if  it  was  found to  meet  the  criteria.  She                                                                    
clarified the  department's estimate  only counted  cases it                                                                    
was certain fell within the bill's specifications.                                                                              
Ms.  Howell  explained the  reason  for  the discrepancy  in                                                                    
between the court system and  DPS numbers. She detailed that                                                                    
APSIN  was  the  state's  criminal  history  repository  and                                                                    
contained official  records of a person's  criminal history.                                                                    
Out  of   an  abundance  of  caution,   the  department  had                                                                    
identified and  included a number  of cases that  could meet                                                                    
the  criteria  in  the  bill.   The  cases  were  standalone                                                                    
convictions  for possession  of  marijuana. She  highlighted                                                                    
that the law  had changed many times and  the department did                                                                    
not  know  without  conducting further  research  whether  a                                                                    
person's particular  conviction would  meet the  criteria in                                                                    
the  bill;  therefore,  the department  had  identified  any                                                                    
record   that  could   potentially  fall   under  the   bill                                                                    
(including  state convictions  and municipal  offenses). She                                                                    
added  that  the  department's  bureau  chief  for  Criminal                                                                    
Records and Identification was available  online to speak as                                                                    
the  subject matter  expert on  APSIN  and criminal  history                                                                    
10:47:07 AM                                                                                                                   
LISA   PURINTON,   BUREAU   CHIEF,  CRIMINAL   RECORDS   AND                                                                    
IDENTIFICATION,   DEPARTMENT    OF   PUBLIC    SAFETY   (via                                                                    
teleconference),  confirmed  Ms.  Howell's  prior  statement                                                                    
that the major discrepancy between  the court system and DPS                                                                    
numbers  was  the  difference between  having  the  specific                                                                    
subsections  as  Ms. Mead  had  identified  versus the  more                                                                    
general  version of  AS 11.71.060  without any  reference to                                                                    
subsections.  She explained  those  cases would  have to  be                                                                    
individually researched by DPS  to determine if the criteria                                                                    
had  been met  as outlined  in the  bill for  preventing the                                                                    
records from being displayed in  an "any persons" background                                                                    
check request. She  highlighted that the DPS  data went much                                                                    
further back than  the court's data. She  believed the court                                                                    
was  limited  to  going  back  to  around  2007,  while  DPS                                                                    
included  all  historic  marijuana conviction  records  that                                                                    
could potentially fall within scope.                                                                                            
Ms. Mead clarified that initially  the court system had gone                                                                    
back to  2005 when all of  the courts were on  CourtView and                                                                    
records  were most  reliable. She  noted that  the bill  had                                                                    
started   several  years   back.  Since   that  time,   more                                                                    
information  had been  added to  CourtView. In  general, the                                                                    
court system  identified about 700 cases  from 2005 forward.                                                                    
The  cases going  back to  1990 accounted  for the  slightly                                                                    
higher number.                                                                                                                  
Co-Chair  Merrick  asked  for the  bill  sponsor  about  the                                                                    
catalyst for the bill.                                                                                                          
Representative  Kreiss-Tompkins replied  that  the idea  had                                                                    
been  discussed  in  past   legislatures  since  the  ballot                                                                    
initiative decriminalizing marijuana had  passed a number of                                                                    
years back. He  explained that the issue had  always been on                                                                    
his radar and the  action seemed very reasonable, especially                                                                    
as other  states around  the country  had gone  much farther                                                                    
than  the  scope  of  the  bill.  He  added  that  the  bill                                                                    
reflected a  calibration toward what he  hoped could attract                                                                    
maximum support from  the legislature and pass.  He would be                                                                    
pleased to see a greater scope,  but he had matched the bill                                                                    
to  what he  believed were  the political  realities in  the                                                                    
building. He  believed the  bill made a  lot of  sense given                                                                    
how marijuana had evolved over  the past decade and had been                                                                    
changed  in the  state's  criminal statutes.  He viewed  the                                                                    
action taken by the bill as a commonsense step.                                                                                 
10:50:45 AM                                                                                                                   
Vice-Chair  Ortiz asked  if there  was a  difference in  the                                                                    
public's accessibility of records  shown on CourtView versus                                                                    
in the DPS APSIN database.                                                                                                      
Ms. Howell  answered that  APSIN was  not accessible  by the                                                                    
general public.                                                                                                                 
Representative  Carpenter  was   concerned  about  rewriting                                                                    
history  and  the inability  for  employers  to access  past                                                                    
records from the court system  for prospective employees. He                                                                    
understood it  was an effort to  destigmatize something that                                                                    
had  been  illegal   and  was  now  legal.   He  provided  a                                                                    
hypothetical scenario  where the speed limit  increased from                                                                    
55 miles per  hour (mph) to 65 mph. He  asked if individuals                                                                    
who had received a speeding  ticket when the speed limit was                                                                    
lower should no longer have  the speeding violation on their                                                                    
record. He explained  that as an employer, he  would look at                                                                    
the record and determine that  when the speed limit had been                                                                    
55  mph the  individual  had a  violation.  He explained  it                                                                    
provided information  about their  following of the  law. He                                                                    
asked if there were instances  where other laws had changed.                                                                    
He  understood it  was a  policy  call, but  he wondered  if                                                                    
there  were  instances  where   speeding  tickets  had  been                                                                    
removed  from CourtView  because of  speed limit  changes or                                                                    
other violations, misdemeanors, or  felonies had changed and                                                                    
therefore   records  had   been   removed  from   CourtView.                                                                    
Alternatively, he asked if the bill was an isolated case.                                                                       
10:53:22 AM                                                                                                                   
Ms.  Mead  answered that  the  short  answer was  "no"  with                                                                    
respect to  CourtView. She explained that  when laws changed                                                                    
there was not a policy or  law directing the court to remove                                                                    
entries  on Court  View. The  bill would  be unique  in that                                                                    
regard. She  pointed out that  the court system  was neutral                                                                    
on the bill. She highlighted  that the legislation was not a                                                                    
full  expungement  bill and  did  not  destroy records.  She                                                                    
noted  that  law enforcement  would  continue  to have  full                                                                    
access to the information. She  explained that based on what                                                                    
the legislature had done in  the past, the bill followed the                                                                    
pattern of saying  that the cases would be  removed from the                                                                    
publicly  available  internet  site  CourtView.  The  change                                                                    
would  mean  people in  their  homes  could not  easily  and                                                                    
readily  access the  material for  free. She  clarified that                                                                    
the  action  would not  eliminate  the  court record  and  a                                                                    
person could still access the information at a courthouse.                                                                      
Representative Carpenter  stated he  may have used  the word                                                                    
"expungement," but it was not  his intent. He recognized the                                                                    
bill  removed  something  from  public view  and  it  was  a                                                                    
destigmatization of a past offense.                                                                                             
10:54:48 AM                                                                                                                   
Vice-Chair  Ortiz  stated  his  understanding  that  traffic                                                                    
citations were removed from a  person's record for insurance                                                                    
companies  and other  after a  period  of time.  He did  not                                                                    
believe traffic  violations went  back any further  than two                                                                    
or three  years if a person  had a clean traffic  record. He                                                                    
thought  it  may  explain  why   the  concern  expressed  by                                                                    
Representative Carpenter  may not  apply in relation  to the                                                                    
Representative  Carpenter stated,  "Not a  representative of                                                                    
any of  the insurance companies  or whatever the  case might                                                                    
be,  that   sounds  like  a   policy  for   that  particular                                                                    
institution."  He knew  that CourtView  had past  violations                                                                    
that were not removed after a period of time.                                                                                   
Ms.  Mead   confirmed  that  Representative   Carpenter  was                                                                    
correct. The court  system did not have a  time period after                                                                    
which it removed any cases  from Court View. She stated that                                                                    
a  speeding ticket  issued by  the state  would still  be on                                                                    
Representative   Josephson    agreed   with   Representative                                                                    
Carpenter's position.  For example,  a trucking  company may                                                                    
want to know  for its own liability what  a person's history                                                                    
was. He believed under the  bill the information would still                                                                    
be accessible to an employer.  He stated that Representative                                                                    
Carpenter's  question  was  well taken  to  inquire  whether                                                                    
other  things with  a statutory  change  were removed  [from                                                                    
CourtView]. He  would be more  comfortable with the  bill if                                                                    
the charges  were standalone. He explained  there were cases                                                                    
where a  person had three or  four counts and they  were all                                                                    
dismissed. He explained that more  often than not when there                                                                    
were three or four counts,  even though they were dismissed,                                                                    
there was  a bit of  smoke there,  while there may  not have                                                                    
been  a  fire. He  explained  that  attorneys and  employers                                                                    
tried  to  do  research  as  inexpensively  and  quickly  as                                                                    
possible.  He noted  that the  individuals did  not want  to                                                                    
have to go  to a courthouse to file a  motion for everything                                                                    
that was  not available  on CourtView.  He pointed  out that                                                                    
family  and  criminal law  attorneys  and  those working  on                                                                    
restraining order cases, wanted  as quick access as possible                                                                    
to  the  entire history  of  a  person.  He stated  that  an                                                                    
attorney  learned all  types of  things and  found witnesses                                                                    
with  the  method.  He  would be  more  comfortable  with  a                                                                    
standalone  misconduct  involving   a  controlled  substance                                                                    
(MICS  6) charge  because it  was clearly  an isolated  case                                                                    
without tangents.                                                                                                               
Co-Chair Merrick thanked the presenters.                                                                                        
HB  246  was  HEARD  and   HELD  in  committee  for  further                                                                    
Co-Chair  Merrick reviewed  the schedule  for the  following                                                                    
10:58:55 AM                                                                                                                   
The meeting was adjourned at 10:58 a.m.                                                                                         

Document Name Date/Time Subjects
HB 158 Additional Info - Legal Memo re Federal Income Tax_PFD 02.01.22.pdf HFIN 3/3/2022 9:00:00 AM
HB 158
HB 158 Sponsor Statement 4.22.21.pdf HFIN 3/3/2022 9:00:00 AM
HB 158
HB 158 Support Document - PFD Deductions Priority.pdf HFIN 3/3/2022 9:00:00 AM
HB 158
HB 158 Support Document - Reference Materials Pick.Click.Give chart.pdf HFIN 3/3/2022 9:00:00 AM
HB 158
HB 246 Explanation of Changes from Version A to B.pdf HFIN 3/3/2022 9:00:00 AM
HB 246
HB 246 Sponsor Statement 12.2.2021.pdf HFIN 3/3/2022 9:00:00 AM
HB 246
HB 246 Support Letters 2.7.2022.pdf HFIN 3/3/2022 9:00:00 AM
HB 246
Sectional Analysis HB 246 ver B 2.7.2022.pdf HFIN 3/3/2022 9:00:00 AM
HB 246
HB 287 Sectional Analysis 3.27.2021.pdf HFIN 3/3/2022 9:00:00 AM
HB 287
HB 287 Sponsor Statement .pdf HFIN 3/3/2022 9:00:00 AM
HB 287
HB 246 - Letter James NORML 022822.pdf HFIN 3/3/2022 9:00:00 AM
HB 246
HB 246 Letter of Support - GOOD Cannabis.pdf HFIN 3/3/2022 9:00:00 AM
HB 246
HB 158 Public Testimony Rec'd by 030222_.pdf HFIN 3/3/2022 9:00:00 AM
HB 158