Legislature(2009 - 2010)BARNES 124

04/12/2010 01:00 PM House RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Continued at 4:30 pm Today --
+ SB 144 MUSK OXEN PERMITS TELECONFERENCED
Moved Out of Committee
<Bill Hearing Rescheduled from 4/09/10>
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 301 POWER PROJECT FUND TELECONFERENCED
Moved Out of Committee
<Bill Held Over from 4/11/10>
+= SB 305 SEPARATE OIL & GAS PRODUCTION TAX TELECONFERENCED
Heard & Held
<Bill Held Over from 4/11/10>
                                                                                                                              
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 12, 2010                                                                                         
                           1:03 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Craig Johnson, Co-Chair                                                                                          
Representative Mark Neuman, Co-Chair                                                                                            
Representative Bryce Edgmon                                                                                                     
Representative Kurt Olson                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Peggy Wilson                                                                                                     
Representative Scott Kawasaki                                                                                                   
Representative Chris Tuck                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 301                                                                                                             
"An  Act relating  to  the  power  project fund;  authorizing  the                                                              
Alaska Energy  Authority to  charge and  collect fees  relating to                                                              
the power  project fund; authorizing  the Alaska  Energy Authority                                                              
to  sell and  authorizing the  Alaska  Industrial Development  and                                                              
Export  Authority to  purchase loans  of the  power project  fund;                                                              
providing  legislative  approval  for  the sale  and  purchase  of                                                              
loans  of  the   power  project  fund  under  the   memorandum  of                                                              
understanding  dated  February  17,  2010; and  providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
     - MOVED OUT OF COMMITTEE                                                                                                   
                                                                                                                                
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 144(FIN)                                                                               
"An Act relating to hunting permits and tag fees for musk oxen."                                                                
                                                                                                                                
     - MOVED OUT OF COMMITTEE                                                                                                   
                                                                                                                                
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 305(FIN)(TITLE AM)                                                                     
"An Act providing  that the tax rate applicable  to the production                                                              
of  oil   as  the   average  on   oil  and   gas  production   for                                                              
appropriation  to the community  revenue sharing fund;  production                                                              
tax  value of  oil, gas  produced  in the  Cook Inlet  sedimentary                                                              
basin, and  gas relating to  the allocation of lease  expenditures                                                              
and adjustments to lease expenditures; produced outside of the                                                                  
Cook Inlet sedimentary basin and used in the state increases and                                                                
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 301                                                                                                                  
SHORT TITLE: POWER PROJECT FUND                                                                                                 
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/26/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/26/10       (S)       RES, FIN                                                                                               
03/15/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/15/10       (S)       Heard & Held                                                                                           
03/15/10       (S)       MINUTE(RES)                                                                                            
03/17/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/17/10       (S)       Moved SB 301 Out of Committee                                                                          
03/17/10       (S)       MINUTE(RES)                                                                                            
03/22/10       (S)       RES RPT  2DP 5NR                                                                                       
03/22/10       (S)       DP: MCGUIRE, WIELECHOWSKI                                                                              
03/22/10       (S)       NR: HUGGINS, STEVENS, STEDMAN, WAGONER,                                                                
                         FRENCH                                                                                                 
04/05/10       (S)       FIN AT 10:00 AM SENATE FINANCE 532                                                                     
04/05/10       (S)       Heard & Held                                                                                           
04/05/10       (S)       MINUTE(FIN)                                                                                            
04/07/10       (S)       FIN RPT  3DP 3NR                                                                                       
04/07/10       (S)       DP: HOFFMAN, HUGGINS, THOMAS                                                                           
04/07/10       (S)       NR: STEDMAN, OLSON, ELLIS                                                                              
04/07/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
04/07/10       (S)       Moved SB 301 Out of Committee                                                                          
04/07/10       (S)       MINUTE(FIN)                                                                                            
04/08/10       (S)       TRANSMITTED TO (H)                                                                                     
04/08/10       (S)       VERSION: SB 301                                                                                        
04/09/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/09/10       (H)       RES, FIN                                                                                               
04/10/10       (H)       RES AT 10:00 AM BARNES 124                                                                             
04/10/10       (H)       Scheduled But Not Heard                                                                                
04/11/10       (H)       RES AT 12:00 AM BARNES 124                                                                             
04/11/10       (H)       Scheduled But Not Heard                                                                                
04/12/10       (H)       FIN AT 8:00 AM HOUSE FINANCE 519                                                                       
04/12/10       (H)       MINUTE(FIN)                                                                                            
04/12/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB 144                                                                                                                  
SHORT TITLE: MUSK OXEN PERMITS & FEES                                                                                           
SPONSOR(s): OLSON                                                                                                               
                                                                                                                                
03/09/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/09/09       (S)       RES, FIN                                                                                               
03/08/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/08/10       (S)       Moved SB 144 Out of Committee                                                                          
03/08/10       (S)       MINUTE(RES)                                                                                            
03/10/10       (S)       RES RPT   4DP 2NR                                                                                      
03/10/10       (S)       DP: MCGUIRE, WIELECHOWSKI, HUGGINS,                                                                    
                         STEVENS                                                                                                
03/10/10       (S)       NR: STEDMAN, FRENCH                                                                                    
03/15/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/15/10       (S)       Heard & Held                                                                                           
03/15/10       (S)       MINUTE(FIN)                                                                                            
03/22/10       (S)       FIN RPT CS  4DP 1NR   SAME TITLE                                                                       
03/22/10       (S)       DP: HOFFMAN, STEDMAN, EGAN, OLSON                                                                      
03/22/10       (S)       NR: HUGGINS                                                                                            
03/22/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/22/10       (S)       Moved CSSB 144(FIN) Out of Committee                                                                   
03/22/10       (S)       MINUTE(FIN)                                                                                            
03/26/10       (S)       TRANSMITTED TO (H)                                                                                     
03/26/10       (S)       VERSION: CSSB 144(FIN)                                                                                 
03/29/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/29/10       (H)       RES, FIN                                                                                               
04/09/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/09/10       (H)       <Bill Hearing Rescheduled to 4/12/10>                                                                  
04/12/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB 305                                                                                                                  
SHORT TITLE: SEPARATE OIL & GAS PROD. TAX/ DEDUCTIONS                                                                           
SPONSOR(s): FINANCE                                                                                                             
                                                                                                                                
03/08/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/08/10       (S)       FIN                                                                                                    
03/09/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/09/10       (S)       Heard & Held                                                                                           
03/09/10       (S)       MINUTE(FIN)                                                                                            
03/10/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/10/10       (S)       <Bill Hearing Canceled>                                                                                
03/11/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/11/10       (S)       -- MEETING CANCELED --                                                                                 
03/12/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/12/10       (S)       Heard & Held                                                                                           
03/12/10       (S)       MINUTE(FIN)                                                                                            
03/18/10       (S)       FIN AT 3:00 PM SENATE FINANCE 532                                                                      
03/18/10       (S)       Heard & Held                                                                                           
03/18/10       (S)       MINUTE(FIN)                                                                                            
03/29/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/29/10       (S)       <Bill Hearing Postponed>                                                                               
03/31/10       (S)       FIN RPT CS  6DP 1AM    NEW TITLE                                                                       
03/31/10       (S)       DP: HOFFMAN, STEDMAN, THOMAS, EGAN,                                                                    
                         OLSON, ELLIS                                                                                           
03/31/10       (S)       AM: HUGGINS                                                                                            
03/31/10       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/31/10       (S)       Moved CSSB 305(FIN) Out of Committee                                                                   
03/31/10       (S)       MINUTE(FIN)                                                                                            
04/01/10       (S)       TRANSMITTED TO (H)                                                                                     
04/01/10       (S)       VERSION: CSSB 305(FIN)(TITLE AM)                                                                       
04/05/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/05/10       (H)       RES, FIN                                                                                               
04/07/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/07/10       (H)       Heard & Held                                                                                           
04/07/10       (H)       MINUTE(RES)                                                                                            
04/09/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/09/10       (H)       Heard & Held                                                                                           
04/09/10       (H)       MINUTE(RES)                                                                                            
04/10/10       (H)       RES AT 10:00 AM BARNES 124                                                                             
04/10/10       (H)       Heard & Held                                                                                           
04/10/10       (H)       MINUTE(RES)                                                                                            
04/11/10       (H)       RES AT 12:00 AM BARNES 124                                                                             
04/11/10       (H)       Heard & Held                                                                                           
04/11/10       (H)       MINUTE(RES)                                                                                            
04/12/10       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SARAH FISHER-GOAD, Deputy Director - Operations                                                                                 
Alaska Industrial Development and Export Authority (AIDEA) and                                                                  
Alaska Energy Authority (AEA)                                                                                                   
Department of Commerce, Community, & Economic Development                                                                       
(DCCED)                                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented SB 301 on behalf of the governor                                                               
and answered questions.                                                                                                         
                                                                                                                                
TIM BENINTENDI, Staff                                                                                                           
Senator Donny Olson                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SB 144 on behalf of the sponsor,                                                               
Senator Olson.                                                                                                                  
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:03:23 PM                                                                                                                  
                                                                                                                              
CO-CHAIR  CRAIG  JOHNSON  called   the  House  Resources  Standing                                                            
Committee  meeting   to  order  at  1:03  p.m.     Representatives                                                              
Johnson,  Neuman, Seaton,  Edgmon, Guttenberg,  and Kawasaki  were                                                              
present at the  call to order.  Representatives  P. Wilson, Olson,                                                              
and Tuck arrived as the meeting was in progress.                                                                                
                                                                                                                                
                   SB 301-POWER PROJECT FUND                                                                                
                                                                                                                                
1:03:46 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  announced that  the first  order of  business is                                                              
SENATE BILL NO.  301, "An Act relating to the power  project fund;                                                              
authorizing  the Alaska  Energy  Authority to  charge and  collect                                                              
fees relating  to the power  project fund; authorizing  the Alaska                                                              
Energy Authority  to sell  and authorizing  the Alaska  Industrial                                                              
Development and  Export Authority to  purchase loans of  the power                                                              
project  fund; providing  legislative  approval for  the sale  and                                                              
purchase of loans  of the power project fund  under the memorandum                                                              
of understanding  dated February  17, 2010;  and providing  for an                                                              
effective date."                                                                                                                
                                                                                                                                
CO-CHAIR  JOHNSON  reviewed  the  day's  schedule,  including  the                                                              
intent  to go into  executive session  at 4:00  p.m. during  which                                                              
Commissioner Galvin will discuss decoupling per SB 305.                                                                         
                                                                                                                                
1:04:58 PM                                                                                                                    
                                                                                                                                
SARAH   FISHER-GOAD,   Deputy  Director   -   Operations,   Alaska                                                              
Industrial  Development and  Export Authority  (AIDEA) and  Alaska                                                              
Energy  Authority  (AEA),  Department of  Commerce,  Community,  &                                                              
Economic  Development   (DCCED),  on   behalf  of  the   governor,                                                              
informed the  committee that SB  301 relates to the  Power Project                                                              
Fund (PPF), which  is an AEA-owned fund.  This  legislation allows                                                              
AEA to sell the  loan portfolio to AIDEA, which  will provide cash                                                              
to the  PPF for upcoming projects.   Ms. Fisher-Goad  related that                                                              
there has  been much  more demand of  this fund, particularly  for                                                              
renewable  energy  projects.   She  clarified  that SB  301  would                                                              
allow AEA  to sell  the PPF  and for  AIDEA to  purchase it.   The                                                              
aforementioned  would  recapitalize  the  PPF  with  approximately                                                              
$20.6  million.     This  legislation   also  authorizes   AEA  to                                                              
establish  fees  for  the  program   as  there  are  currently  no                                                              
application  or origination fees.   The  Bulk Fuel Revolving  Loan                                                              
Fund does charge  application and origination fees  and the intent                                                              
is to do something similar for PPF loans                                                                                        
                                                                                                                                
1:06:22 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON inquired as to why this is necessary.                                                                          
                                                                                                                                
MS. FISHER-GOAD explained  that the primary purpose  is to provide                                                              
new cash for new  projects.  The PPF is approximately  $35 million                                                              
worth of assets,  of which it's not a lot of cash.   Therefore, SB
301 would provide a way to raise cash for new projects.                                                                         
                                                                                                                                
1:06:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN,  referring to Section  2 of SB 301, asked  if Ms.                                                              
Fisher-Goad  anticipates any  changes in  the regulations  as they                                                              
are repealed and reenacted.                                                                                                     
                                                                                                                                
MS.  FISHER-GOAD clarified  that  Section 2  repeals and  reenacts                                                              
[AS 42.45.010(d)]  in order  to allow  AIDEA to  charge fees.   In                                                              
further response  to Co-Chair  Neuman, Ms. Fisher-Goad  reiterated                                                              
that SB  301 would allow  AIDEA to charge  an application  fee and                                                              
an  origination fee.   She  noted  that in  order to  adopt a  fee                                                              
schedule, a public  process will have to be followed.   In further                                                              
response to  Co-Chair Neuman, Ms.  Fisher-Goad explained  that the                                                              
Renewable Energy  Fund is  a new  program, a grant  recommendation                                                              
program.    The program  is  set  to  go through  five  rounds  of                                                              
project  evaluation and  funding.   Round 1 was  the $100  million                                                              
that AEA received  in fiscal year (FY) 2009 and that  was the only                                                              
round that went  through a Legislative Budget and  Audit Committee                                                              
approval  process.  Last  year, the  legislature appropriated  $25                                                              
million and directed  AEA to use its list of projects  to fund $25                                                              
million worth  of projects.  Before  the legislature this  year is                                                              
a request for the  Round 3 projects to be funded.   In the capital                                                              
budget that's  still being considered  in the Senate,  the funding                                                              
level requested  is $50 million  for [the Renewable  Energy Fund].                                                              
One of  the evaluation criteria  for the Renewable Energy  Fund is                                                              
matching funds.   The PPF,  which has been  in existence  for some                                                              
time, has  been a funding source  that's being used for  the match                                                              
requirement for many  local entities that apply  for the Renewable                                                              
Energy  Fund.   The PPF,  she clarified,  exists independently  on                                                              
its own  and has a separate  evaluation process.   Ms. Fisher-Goad                                                              
further  clarified that  no new  program is  being created,  funds                                                              
are just  being provided  to continue to  provide loans  for power                                                              
projects.                                                                                                                       
                                                                                                                                
1:11:06 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  asked from  where the initial  funds for  the PPF                                                              
originated.                                                                                                                     
                                                                                                                                
MS.  FISHER-GOAD said  that although  the  PPF has  existed for  a                                                              
long time,  she didn't  know when  it was  established.   However,                                                              
the PPF  had to have  legislative action  to provide funds  to the                                                              
program.    She   estimated  that  the  aforementioned   may  have                                                              
occurred in the 1980s.   Over the last 10 years,  AEA hasn't had a                                                              
new injection  of cash into the  PPF, save some  specific projects                                                              
through  a match  requirement  that was  through  the Energy  Cost                                                              
Reduction program, which was a Denali Commission funded program.                                                                
                                                                                                                                
1:12:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON related  his understanding  that this  is a                                                              
discussion  of  transferring  actual   securities  rather  than  a                                                              
securitized package.                                                                                                            
                                                                                                                                
MS. FISHER-GOAD explained  that AIDEA would purchase  [the PPF] as                                                              
an  investment, and  therefore AIDEA  receives the  loans and  the                                                              
associated  cash flow.   However,  AEA receives  the cash  that is                                                              
the value  of those loans.   She further explained that  AEA would                                                              
receive the cash  to be injected into the fund,  while AIDEA would                                                              
receive the  investment and the  cash flow of those  loan payments                                                              
from now until  they mature.  She  recalled that one of  the loans                                                              
matures in 20 years.                                                                                                            
                                                                                                                                
REPRESENTATIVE  SEATON  said  that  he  wanted to  be  clear  that                                                              
[AIDEA]  is  actually  purchasing   the  entire  loan,  but  isn't                                                              
creating a securitized loan package.                                                                                            
                                                                                                                                
MS. FISHER-GOAD  guaranteed that  [under SB  301] it's  strictly a                                                              
"cash for future cash flow" transaction.                                                                                        
                                                                                                                                
1:14:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  pointed out  that there  are some zero  interest                                                              
loans, and inquired as to the value they have.                                                                                  
                                                                                                                                
MS. FISHER-GOAD clarified  that a discount rate for  the cash flow                                                              
is applied  for AIDEA's  purchase  price.  For  example, the  cash                                                              
flow is  the 30 years  of principal  and interest payments,  which                                                              
is  discounted back  at  a 6.02  percent  interest rate  discount.                                                              
Therefore,  AIDEA  would  pay  approximately   $20.6  million  for                                                              
future cash flow of approximately $24-$27 million.                                                                              
                                                                                                                                
1:15:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON, after  ascertaining no  one wished to  testify,                                                              
closed public testimony.                                                                                                        
                                                                                                                                
1:15:55 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  requested an explanation  of the  larger picture                                                              
of what is being done.                                                                                                          
                                                                                                                                
MS. FISHER-GOAD  informed the committee  that with the  passage of                                                              
SB 301,  HB 412  will receive capitalization  that was  originally                                                              
proposed in  the governor's budget  for the PPF.   Therefore, it's                                                              
a situation  in which the $7  million requested in  the governor's                                                              
budget  would be  reduced  by  the $3.5  million  to  pay for  the                                                              
fiscal note on [HB 412], the micro loan program.                                                                                
                                                                                                                                
1:17:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON  noted  that  SB  301,  with  a  savings  of  $3                                                              
million, will next go to the House Finance Committee.                                                                           
                                                                                                                                
1:17:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN moved  to report  SB  301 out  of committee  with                                                              
individual  recommendations  and  the accompanying  fiscal  notes.                                                              
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
1:18:09 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
                SB 144-MUSK OXEN PERMITS & FEES                                                                             
                                                                                                                                
1:18:57 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON announced  that the next order of  business is CS                                                              
FOR  SENATE  BILL  NO.  144(FIN),  "An  Act  relating  to  hunting                                                              
permits and tag fees for musk oxen."                                                                                            
                                                                                                                                
1:19:22 PM                                                                                                                    
                                                                                                                                
TIM  BENINTENDI,   Staff,  Senator   Donny  Olson,   Alaska  State                                                              
Legislature, provided the following testimony:                                                                                  
                                                                                                                                
     At its  core, Senate Bill  144 would authorize  a second                                                                   
     permit  hunt for  resident and  subsistence hunters  for                                                                   
     the taking of  musk ox.  It would double  the chances of                                                                   
     taking  an  animal, but  it  would  not change  the  bag                                                                   
     limit  which currently  stands at one  animal, either  a                                                                   
     bull or a  cow.  Nonresident hunters would  not qualify.                                                                   
     If a  hunter did not harvest  a musk ox under  the first                                                                   
     permit,  then  a  second permit  could  be  issued  upon                                                                   
     application  for  another  chance in  a  different  hunt                                                                   
     area  or in  a  different game  management  unit.   Musk                                                                   
     oxen are the  only game animals in Alaska  for which the                                                                   
     one permit  restriction still  applies.  There  are four                                                                   
     game management  units in the state where  these animals                                                                   
     are  found.   Unit  18 is  on  both Nunivak  and  Nelson                                                                   
     Islands,  Unit 22  and 23  are on  the Seward  Peninsula                                                                   
     and in the  Northwest, and Unit 26 is in  the Northeast.                                                                   
     The wild  musk ox population  is currently estimated  to                                                                   
     be at  4,400 animals; and  annually between 325  and 350                                                                   
     are  available for  harvest.   Wildlife  biologists  and                                                                   
     regulators  within the  Department of  Fish & Game  have                                                                   
     determined  that  the health  and  size of  the  state's                                                                   
     herd is  well past the  threshold for expanding  hunting                                                                   
     opportunities.   They estimate that a minimum  number of                                                                   
     permits will  be issued under  this bill and  perhaps 25                                                                   
     more animals might be harvested annually.                                                                                  
                                                                                                                                
     Under  Senate Bill  144, the  Board of  Game would  have                                                                   
     the  authority to  reduce or  eliminate subsistence  tag                                                                   
     and  fee requirements.    And  because Senate  Bill  144                                                                   
     changes  a year  from a  calendar year  to a  regulatory                                                                   
     year,  which is July  1st to  June 30th, the  department                                                                   
     would  be  able  to  issue  permits  for  seasons  which                                                                   
     straddle  the calendar  year and  not have  to charge  a                                                                   
     hunter  twice  and  issue   two  permits  for  the  same                                                                   
     season.  If  passed, this legislation would  take effect                                                                   
     in August.   And  the bill carries  a zero fiscal  note,                                                                   
     has  the  support  of the  department,  support  of  the                                                                   
     hunting  community in  the  Northwest Alaska,  including                                                                   
     the  Northern   and  Southern   Norton  Sound   Advisory                                                                   
     Committees,   and   the   Seward   Peninsula   Musk   Ox                                                                   
     Cooperators Group.                                                                                                         
                                                                                                                                
1:21:47 PM                                                                                                                    
                                                                                                                                
MR. BENINTENDI, in response to Co-Chair Johnson, stated that the                                                                
next committee of referral for SB 144 is the House Finance                                                                      
Committee.                                                                                                                      
                                                                                                                                
1:21:59 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON then  inquired as to how one  permit, rather than                                                              
two, can  be issued due to  straddling the year without  having an                                                              
impact.                                                                                                                         
                                                                                                                                
MR. BENINTENDI  informed the committee  that currently there  is a                                                              
season  from August  until  March.   Currently,  the hunter  would                                                              
have to apply and  obtain a permit.  Assuming that  hunter doesn't                                                              
take an  animal by January  1st, that hunter  would have  to apply                                                              
for  the permit  again  and pay  again.   This  legislation  would                                                              
change the  year basis  upon which  that structure  is based.   In                                                              
further  response to  Co-Chair Johnson,  Mr. Benintendi  confirmed                                                              
that  there could  be a  negligible  revenue factor.   He  related                                                              
that  [the Alaska  Department of  Fish &  Game (ADF&G)]  estimated                                                              
that  under  the proposed  system  there  would  be less  than  50                                                              
permits.   However,  they estimate  that the  increased amount  of                                                              
animals taken will be about 25.                                                                                                 
                                                                                                                                
1:23:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN  related  his  understanding  that  hunters  will                                                              
still have  to purchase  a hunting license  each year,  [but under                                                              
SB 144] a  hunter who doesn't  harvest an animal will  continue to                                                              
have a  permit that  will carry through.   Co-Chair  Neuman opined                                                              
that there  wouldn't be  any fiscal impact  since the  hunter will                                                              
have to purchase  a hunting license the next year  in order to use                                                              
that  [tag] they  already have  [through the  permit they  already                                                              
have].                                                                                                                          
                                                                                                                                
1:24:03 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON clarified  that SB  144 only  extends the  tags,                                                              
not the hunting license through the permit period.                                                                              
                                                                                                                                
MR.  BENINTENDI noted  his agreement.    He then  added that  this                                                              
doesn't impede  any of the Board  of Game's current  authority, in                                                              
fact it provides the board a bit more liberty.                                                                                  
                                                                                                                                
1:24:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  surmised then  that a person  who purchases                                                              
a $500  resident tag  is entitled  to a  bag limit  of one.   That                                                              
person  can then  apply for  another  permit and  purchase it  for                                                              
another $500.   He  further surmised  that the  bag limit  for the                                                              
permit is  one, but  he questioned  whether the  bag limit  of the                                                              
season  is increased  to  as many  multiples  of the  $500 as  the                                                              
person purchases.                                                                                                               
                                                                                                                                
MR. BENINTENDI replied  no, and added that the  person doesn't pay                                                              
a second  time.  If SB  144 passes, then  a person would  have the                                                              
opportunity  to have a  second permit.   The  Board of  Game would                                                              
determine the fee structure.                                                                                                    
                                                                                                                                
1:25:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  pointed out that  on page 2, line  5, of SB
144  the language  "a person  is not  eligible for  more than  one                                                              
musk oxen permit  a year." is being eliminated.   He asked if that                                                              
means a  person can take  two or three  musk oxen.   "The question                                                              
is can a person,  at the same time, hold more  than one permit and                                                              
get one animal on  the bag limit for that permit,  if we eliminate                                                              
lines 5-6, ... on page 2," he asked.                                                                                            
                                                                                                                                
MR. BENINTENDI  related that his  understanding is no.   He opined                                                              
that a  person is allowed  one animal per  year regardless  of the                                                              
number of attempts or location.                                                                                                 
                                                                                                                                
1:26:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON,  referring to  the sectional  analysis,                                                              
surmised  that  SB 144  would  allow  an  individual who  holds  a                                                              
permit but  didn't harvest  an animal to  have another  chance [to                                                              
harvest an animal.                                                                                                              
                                                                                                                                
MR.  BENINTENDI replied  yes, the  legislation  would provide  one                                                              
more chance.                                                                                                                    
                                                                                                                                
1:27:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON said  that he understands  the intent,  but                                                              
he expressed concern  with deleting the language on  page 2, lines                                                              
5-6, because it's  essentially saying a person can  have more than                                                              
one musk ox permit a year.                                                                                                      
                                                                                                                                
MR.  BENINTENDI responded  that  would likely  still  fall to  the                                                              
Board of Game  to regulate.  He  related that he hasn't  heard any                                                              
concern for the taking of multiple animals.                                                                                     
                                                                                                                                
CO-CHAIR NEUMAN  pointed out  that the  regulations for  each game                                                              
management  unit can  be different  and  can be  changed [per  the                                                              
Board of Game].                                                                                                                 
                                                                                                                                
CO-CHAIR  JOHNSON   remarked  that   although  he  believes   [the                                                              
legislation]  would do  what  Representative  Seaton is  concerned                                                              
about, he indicated that it's a decision for the Board of Game.                                                                 
                                                                                                                                
REPRESENTATIVE SEATON  explained that he raised the  issue because                                                              
the language  was in  statute to  ensure there  wasn't a  multiple                                                              
safari hunt  or multiple game animals  [harvested].  He  said that                                                              
although he didn't  want to hold the legislation,  he did want the                                                              
sponsor  to  make sure  what  the  legislation achieves  prior  to                                                              
being forwarded to the House Finance Committee.                                                                                 
                                                                                                                                
CO-CHAIR  JOHNSON  requested  that  Mr. Benintendi  pass  on  this                                                              
concern to the sponsor.                                                                                                         
                                                                                                                                
1:31:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KAWASAKI expressed  concern that  portions of  the                                                              
sponsor's statement  seem ambiguous.  He opined  that he's unclear                                                              
as to whether Representative Seaton's concern is correct.                                                                       
                                                                                                                                
CO-CHAIR  JOHNSON  reiterated  that  he  has  asked  the  sponsor,                                                              
Senator  Olson,   to  clearly   spell  out   the  intent   of  the                                                              
legislation.     He   related  his   intention   to  forward   the                                                              
legislation with the aforementioned caveat.                                                                                     
                                                                                                                                
1:33:15 PM                                                                                                                    
                                                                                                                                
MR. BENINTENDI remarked  that it's a valid question  that deserves                                                              
an answer, which he could forward to the committee.                                                                             
                                                                                                                                
1:33:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON  opined that  it  seems implicit  that  the                                                              
Board of Game is  being given another tool through  SB 144.  There                                                              
are four  far flung  game management  units and  animals that  are                                                              
likely  growing  beyond  their  threshold.    In  the  event  it's                                                              
necessary to  allow harvesting more  than one animal,  there would                                                              
be the authority to do so.                                                                                                      
                                                                                                                                
1:33:56 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  remarked that  although he believes  [the taking                                                              
of  more than  one  animal]  should be  an  option,  it should  be                                                              
discussed.                                                                                                                      
                                                                                                                                
1:34:13 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN pointed  out that  there  are many  areas in  the                                                              
state where  multiple animals  can be  harvested, it depends  upon                                                              
the  population  in  a  given  area.    The  aforementioned  is  a                                                              
decision  for  the Board  of  Game  to  make and  the  legislation                                                              
clearly refers to the regulations.                                                                                              
                                                                                                                                
1:35:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI  remarked that he wouldn't  have a problem                                                              
moving SB  144 if he's  assured that it  will be forwarded  to the                                                              
House Finance Committee with a zero fiscal note.                                                                                
                                                                                                                                
CO-CHAIR  JOHNSON said that  SB 144  does have  a referral  to the                                                              
House Finance Committee because it involves fees.                                                                               
                                                                                                                                
MR. BENINTENDI  interjected that  the sponsor isn't  interested in                                                              
waiving SB 144 from the House Finance Committee.                                                                                
                                                                                                                                
1:35:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SEATON  remarked  that   although  he   has  full                                                              
confidence  in  the  Board  of   Game,  the  board  may  not  have                                                              
addressed this  in the  regulations because  the statute  says not                                                              
more than one  animal a year can  be taken.  Therefore,  he wanted                                                              
to raise  the issue so  that the Board of  Game will be  on notice                                                              
that its regulations may not address this.                                                                                      
                                                                                                                                
1:36:23 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON,  upon determining  no  one wished  to  testify,                                                              
closed public testimony.                                                                                                        
                                                                                                                                
1:36:51 PM                                                                                                                    
                                                                                                                                
CO-CHAIR NEUMAN  clarified that SB  144 would allow people  to use                                                              
their permit  to harvest game when  that game is  still available,                                                              
the season  is still  open, [and the  person didn't  harvest under                                                              
their initial permit].                                                                                                          
                                                                                                                                
REPRESENTATIVE KAWASAKI  commented that  other units, such  as the                                                              
Central Arctic herd, have similar rules and regulations.                                                                        
                                                                                                                                
CO-CHAIR  JOHNSON surmised  that this legislation  is in  response                                                              
to a constituent who came forward with a problem.                                                                               
                                                                                                                                
1:38:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   EDGMON  moved  to   report  CSSB  144(FIN)   from                                                              
committee.  There being no objection, it was so ordered.                                                                        
                                                                                                                                
1:39:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON  announced his intent  to recess until  4:00 p.m.                                                              
today  at which  time  the  committee  will enter  into  executive                                                              
session to  hear from  the attorney  general regarding  matters of                                                              
taxes and issues that are confidential.                                                                                         
                                                                                                                                
4:22:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  NEUMAN called  the meeting  back to  order at 4:22  p.m.                                                              
Upon  reconvening   Representatives   Tuck,  Seaton,   P.  Wilson,                                                              
Edgmon, Olson, Johnson,  and Neuman were present.   Representative                                                              
Guttenberg  arrived  as  this  portion   of  the  meeting  was  in                                                              
progress.                                                                                                                       
                                                                                                                                
        SB 305-SEPARATE OIL & GAS PROD. TAX/ DEDUCTIONS                                                                     
                                                                                                                                
4:23:20 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOHNSON announced  that the next order of  business is CS                                                              
FOR SENATE  BILL NO.  305(FIN)(title am),  "An Act providing  that                                                              
the tax rate  applicable to the  production of oil as  the average                                                              
production  tax value  of  oil,  gas produced  in  the Cook  Inlet                                                              
sedimentary  basin, and  gas produced  outside of  the Cook  Inlet                                                              
sedimentary  basin  and used  in  the  state increases  above  $30                                                              
shall  be 0.4  percent multiplied  by the  number that  represents                                                              
the difference between  that average monthly production  tax value                                                              
and $30, or the  sum of 25 percent and the product  of 0.1 percent                                                              
multiplied by  the number that  represents the difference  between                                                              
that  average monthly  production  tax  value and  $92.50,  except                                                              
that the total  rate determined in the calculation  may not exceed                                                              
50 percent;  providing for an increase  in the rate of  tax on the                                                              
production of  gas as the  average production  tax value on  a BTU                                                              
equivalent  barrel  basis of  gas  produced  outside of  the  Cook                                                              
Inlet  sedimentary  basin and  not  used  in the  state  increases                                                              
above  $30; relating  to payments  of the oil  and gas  production                                                              
tax; relating to  availability of a portion of  the money received                                                              
from the  tax on oil and gas  production for appropriation  to the                                                              
community  revenue sharing  fund;  relating to  the allocation  of                                                              
lease  expenditures and  adjustments  to lease  expenditures;  and                                                              
providing for  an effective date."   [Before the committee  is HCS                                                              
CSSB 305, Version 26-LS1577\M, Bullock, 4/10/10.]                                                                               
                                                                                                                                
4:23:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOHNSON moved that  the committee  enter into  executive                                                              
session under  Uniform Rule  22(b)(1) and (3)  for the  purpose of                                                              
discussing  matters,  the  immediate   knowledge  of  which  would                                                              
adversely affect  the finances  of the  state government  and may,                                                              
by  law,  be  required  to  be  confidential.    He  directed  Rex                                                              
Shattuck,   Staff   to   Representative   Neuman,   Alaska   State                                                              
Legislature,  to remain  in the  executive session.   It was  then                                                              
noted that  [Attorney General  Dan Sullivan,  Department  of Law];                                                              
Tina  Kobayashi,  Chief  Assistant Attorney  General  -  Statewide                                                              
Section  Supervisor,  Oil, Gas  &  Mining Section,  Department  of                                                              
Law; and Jonathan  Katchen, Special Assistant Attorney,  Office of                                                              
the  Attorney General,  Department of  Law, would  also remain  in                                                              
the  executive   session.    The   committee  then   entered  into                                                              
executive session.                                                                                                              
                                                                                                                                
[Due  to technical  difficulties  no audio  is  available for  the                                                              
committee's  return from executive  session at  6:02 p.m.  and the                                                              
reconvening of the public meeting.]                                                                                             
                                                                                                                                
CO-CHAIR  JOHNSON  announced  the next  House  Resources  Standing                                                              
Committee meeting is scheduled for 9:00 a.m. on April 13, 2010.                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Resources Standing Committee meeting was adjourned at 6:02 p.m.                                                                 

Document Name Date/Time Subjects
SB 144 Bill Packet.pdf HRES 4/12/2010 1:00:00 PM
SB 144
SB 301 Bill Packet.pdf HRES 4/12/2010 1:00:00 PM
SB 301