Legislature(2013 - 2014)SENATE FINANCE 532

04/08/2013 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 85 EXPERIMENTAL VEHICLE PLATES TELECONFERENCED
Moved CSSB 85(TRA) Out of Committee
+ SB 95 STATE EMPLOYEE COMPENSATION AND BENEFITS TELECONFERENCED
Moved CSSB 95(FIN) Out of Committee
+ SB 96 OIL AND GAS AND GAS ONLY LEASES TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
= SB 74 UNIVERSITY OF ALASKA BUILDING FUND
Moved SB 74 Out of Committee
= HB 77 LAND USE/DISP/EXCHANGES; WATER RIGHTS
Moved SCS CSHB 77(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                       April 8, 2013                                                                                            
                         9:06 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:06:46 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer  called the Senate Finance  Committee meeting                                                                    
to order at 9:06 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Christine Marasigan, Staff, Senator  Kevin Meyer; Ed Fogels,                                                                    
Deputy  Commissioner,   Department  of   Natural  Resources;                                                                    
Heather  Shattuck,  Staff,   Senator  Pete  Kelly;  Brittany                                                                    
Hutchison,  Staff,  Senator  Click  Bishop;  Curtis  Thayer,                                                                    
Deputy  Commissioner,  Department of  Administration  (DOA);                                                                    
Nicki  Neal,  Director,  Division  of  Personnel  and  Labor                                                                    
Relations,  Department  of   Administration;  Senator  Peter                                                                    
Micciche; Larry Semmens.                                                                                                        
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Jim  Dodson,  President,   Fairbanks  Economic  Development,                                                                    
Fairbanks.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB  74    UNIVERSITY OF ALASKA BUILDING FUND                                                                                    
                                                                                                                                
          SB 74  was REPORTED  out of  committee with  a "do                                                                    
          pass"  recommendation  and  with new  zero  fiscal                                                                    
          notes  from the  University of  Alaska, Department                                                                    
          of Administration, and Department of Revenue.                                                                         
                                                                                                                                
CS SB  85 (TRA)EXPERIMENTAL VEHICLE PLATES                                                                                      
                                                                                                                                
          CS SB 85 (TRA) was  REPORTED out of committee with                                                                    
          a  "do pass"  recommendation  and with  previously                                                                    
          published zero fiscal note: FN1 (ADM).                                                                                
                                                                                                                                
CS SB  95 STATE EMPLOYEE COMPENSATION AND BENEFITS                                                                              
                                                                                                                                
          CS SB 95 was REPORTED  out of committee with a "do                                                                    
          pass" recommendation and with  a new fiscal impact                                                                    
          note from the Legislature;  new fiscal impact note                                                                    
          from  the Court  System; and  previously published                                                                    
          fiscal impact note: FN1 (GOV).                                                                                        
                                                                                                                                
SB  96    OIL AND GAS AND GAS ONLY LEASES                                                                                       
                                                                                                                                
          SB 96 was HEARD and  HELD in committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
SCS CS HB 77(FIN)                                                                                                               
          LAND USE/DISP/EXCHANGES; WATER RIGHTS                                                                                 
                                                                                                                                
          SCS CS  HB 77(FIN)  was REPORTED out  of committee                                                                    
          with  a "do  pass" recommendation  and a  new zero                                                                    
          fiscal note from  Department of Natural Resources,                                                                    
          and  previously published  zero  fiscal note:  FN2                                                                    
          (DFG).                                                                                                                
                                                                                                                                
CS FOR HOUSE BILL NO. 77(RES)                                                                                                 
                                                                                                                                
     "An  Act relating  to the  Alaska  Land Act,  including                                                                    
     certain authorizations, contracts,  leases, permits, or                                                                    
     other disposals of state  land, resources, property, or                                                                    
     interests;  relating to  authorization for  the use  of                                                                    
     state land  by general permit; relating  to exchange of                                                                    
     state   land;  relating   to  procedures   for  certain                                                                    
     administrative     appeals     and     requests     for                                                                    
     reconsideration   to   the  commissioner   of   natural                                                                    
     resources; relating  to the Alaska  Water Use  Act; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
9:08:19 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  noted  letters in  the  committee  member's                                                                    
packet  from  various  corporations,  support  letters,  and                                                                    
paperwork related to the bill.                                                                                                  
                                                                                                                                
9:08:54 AM                                                                                                                    
                                                                                                                                
Co-Chair  Kelly  MOVED  to   ADOPT  the  proposed  committee                                                                    
substitute for  SCS CS HB  77 (FIN), Work  Draft 28-GH1524\P                                                                    
(Bullock 4/7/13).                                                                                                               
                                                                                                                                
Co-Chair Meyer OBJECTED for purpose of discussion.                                                                              
                                                                                                                                
9:09:57 AM                                                                                                                    
                                                                                                                                
CHRISTINE MARASIGAN,  STAFF, SENATOR KEVIN MEYER,  noted the                                                                    
title change  on the first  page of the CS,  which pertained                                                                    
to  material stated  on  page 18,  section  30. The  section                                                                    
allowed  for  the  performance of  a  feasibility  study  at                                                                    
Chikuminuk  Lake. Language  pertaining to  the same  subject                                                                    
was  found  on  page  6  in  the  transition  language.  She                                                                    
mentioned 2 additional substantive  changes to the bill, the                                                                    
first  on page  6,  section 4  addressed  leases. The  final                                                                    
change on page 23, section  47 addressed language related to                                                                    
transition, pending applications.                                                                                               
                                                                                                                                
9:11:43 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer noted that the  change in access to the Wood-                                                                    
Tikchik  State  Park  was  previously  included  in  Senator                                                                    
McGuire's bill, which  was the reason for  the title change.                                                                    
He  stated   that  long-term   lease  sales   allowed  first                                                                    
purchasing   opportunity  to   the  lessee.   Ms.  Marasigan                                                                    
concurred.                                                                                                                      
                                                                                                                                
9:12:55 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  understood that  transition language  in the                                                                    
bill   required  correction   in   collaboration  with   the                                                                    
Department  of   Natural  Resources  (DNR).   Ms.  Marasigan                                                                    
replied  that  there  had  been  some  discussion  regarding                                                                    
Section 4 pertaining to preference rites.                                                                                       
                                                                                                                                
9:13:17 AM                                                                                                                    
                                                                                                                                
Ms. Marasigan  pointed out that  the transition  language at                                                                    
the end  of the bill  should result  in a zero  fiscal note.                                                                    
She  stated  that  DNR  representatives  were  available  to                                                                    
discuss the fiscal note.                                                                                                        
                                                                                                                                
9:14:08 AM                                                                                                                    
                                                                                                                                
Senator Olson objected that the  finance CS was considerably                                                                    
different from the original and  he hoped for ample time for                                                                    
committee consideration.                                                                                                        
                                                                                                                                
Co-Chair Meyer explained that the  bill's changes were minor                                                                    
and he did not feel the need to hold the bill.                                                                                  
                                                                                                                                
Senator  Olson remarked  that the  citizens affected  by the                                                                    
changes in the bill did not consider the issues minor.                                                                          
                                                                                                                                
9:15:08 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly  queried the page  number for  Tikchick State                                                                    
Park and Chikuminuk Lake.                                                                                                       
                                                                                                                                
Ms. Marasigan  replied that  the title  change was  noted on                                                                    
page  one.  Another change  noted  on  page 18,  section  30                                                                    
addressed Chikuminuk  Lake. She  continued that page  23 had                                                                    
transition language which also addressed Chikuminuk Lake.                                                                       
                                                                                                                                
9:15:59 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly remarked  that the CS would  not grant access                                                                    
to the park, but rather enable a feasibility study.                                                                             
                                                                                                                                
Co-Chair  Meyer  agreed,  but   remarked  that  funding  was                                                                    
acquired in  the FY 13  capital budget for a  hydro project,                                                                    
but  access  to  the  park  was  necessary  to  perform  the                                                                    
feasibility study.                                                                                                              
                                                                                                                                
9:16:46 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly  reiterated that access would  be granted for                                                                    
the feasibility study alone.                                                                                                    
                                                                                                                                
9:17:01 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough  looked at  page  6,  and noted  that                                                                    
Section 4 was new.                                                                                                              
                                                                                                                                
Ms. Marasigan replied  that the section was  new and related                                                                    
to preference rights to  purchaser lease without competitive                                                                    
bid for  up to  five acres  of state  land. She  pointed out                                                                    
that the change added time  for an applicant to purchase the                                                                    
lease  land.   The  federal  permit  requirement   was  also                                                                    
removed.                                                                                                                        
                                                                                                                                
9:18:08 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman noted  that section  40  from the  previous                                                                    
version was now listed as section 42.                                                                                           
                                                                                                                                
Ms. Marasigan replied that the  bill remained the same minus                                                                    
the three discussed changes.                                                                                                    
                                                                                                                                
9:18:42 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  addressed   Senator  Olson's  concerns.  He                                                                    
understood that  any time bills were  combined, public input                                                                    
was minimized. He noted that  the process of combining bills                                                                    
was  expected  at  the  end of  a  legislative  session.  He                                                                    
believed  that  the  bill's  impact  was  similar  and  that                                                                    
testimony for HB  77 would remain consistent.  He judged the                                                                    
CS as an appropriate vehicle for the changes.                                                                                   
                                                                                                                                
9:19:31 AM                                                                                                                    
                                                                                                                                
Senator Olson  felt that the  bill was  deemed controversial                                                                    
prior to  the introduction  of the Senate  Finance Committee                                                                    
version. He  opined that  the judgment  of the  chairman was                                                                    
clouded  by end-of-session  pressure.  He suggested  holding                                                                    
the bill in committee for  further work in a subcommittee or                                                                    
special  session. He  requested testimony  from DNR  and the                                                                    
Water Resources Board.                                                                                                          
                                                                                                                                
9:20:44 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer shared that DNR  was available to discuss the                                                                    
changes. He  opined that HB  77 was well vetted  between the                                                                    
two bodies.                                                                                                                     
                                                                                                                                
Senator Olson felt  that the CS was much  different than the                                                                    
version passed to the committee.                                                                                                
                                                                                                                                
Co-Chair  Meyer agreed  that changes  were  made, which  was                                                                    
common practice at the end of session.                                                                                          
                                                                                                                                
9:21:20 AM                                                                                                                    
                                                                                                                                
Senator  Olson  suggested  that bad  legislation  was  often                                                                    
passed when time was short and legislators were rushed.                                                                         
                                                                                                                                
9:21:25 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:24:23 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:24:33 AM                                                                                                                    
                                                                                                                                
Senator   Bishop  pointed   to  Section   4  and   requested                                                                    
clarification from the department.                                                                                              
                                                                                                                                
9:24:54 AM                                                                                                                    
                                                                                                                                
ED  FOGELS,  DEPUTY   COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES, introduced himself.                                                                                                  
                                                                                                                                
9:25:37 AM                                                                                                                    
                                                                                                                                
Senator Bishop noted that section  4 stated that "a director                                                                    
shall  grant  a  preference to  right-to-purchase  or  lease                                                                    
without competitive  bid up to  5 acres...who has  erected a                                                                    
building  on the  land  and use  the land  for  a bona  fide                                                                    
business purposes." He  asked if the section  would apply to                                                                    
traditional fish camps on the Yukon River.                                                                                      
                                                                                                                                
Mr. Fogels replied that the  intent of the preference was to                                                                    
provide Alaskans  with federal permits on  federal land. The                                                                    
permits  allowed Alaskans  the opportunity  to purchase  the                                                                    
land.                                                                                                                           
                                                                                                                                
9:26:32 AM                                                                                                                    
                                                                                                                                
Senator Bishop  asked if an  Alaskan with a fish  camp could                                                                    
apply for the preference to purchase or lease federal land.                                                                     
                                                                                                                                
Mr. Fogels  pointed out  that the  amendment stated  that an                                                                    
Alaskan  with   a  state  permit   or  lease  who   met  the                                                                    
requirements  of 10  years  and 25  percent  would have  the                                                                    
option to purchase the property.                                                                                                
                                                                                                                                
9:27:26 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  clarified that the proposed  amendment would                                                                    
not be addressed until the CS was adopted.                                                                                      
                                                                                                                                
9:27:42 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly remarked that the  changes in the CS were not                                                                    
significant  and were  present to  protect Alaskans.  He did                                                                    
not  think  that the  subject  of  a feasibility  study  was                                                                    
especially controversial.                                                                                                       
                                                                                                                                
9:29:13 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer remarked  that  combining  the bills  seemed                                                                    
logical.  He  noted that  access  to  the park  also  seemed                                                                    
logical since the money for  the project was appropriated in                                                                    
the FY 13 capital budget.                                                                                                       
                                                                                                                                
Co-Chair  Kelly  furthered  that  there  were  two  separate                                                                    
pieces that  the feasibility study  could be applied  to and                                                                    
the most applicable option was propagated in the CS.                                                                            
                                                                                                                                
9:30:09 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly  restated his original  motion, and  MOVED to                                                                    
ADOPT the  proposed committee  substitute for  SCS CS  HB 77                                                                    
(FIN), Work Draft 28-GH1524\P (Bullock 4/7/13).                                                                                 
                                                                                                                                
Senator Olson OBJECTED for discussion.                                                                                          
                                                                                                                                
Senator  Olson  wondered if  Mr.  Fogels  would explain  the                                                                    
forthcoming amendment upon proposal.                                                                                            
                                                                                                                                
Co-Chair Meyer replied in the affirmative.                                                                                      
                                                                                                                                
9:30:36 AM                                                                                                                    
                                                                                                                                
Senator  Olson   removed  his  objection.  There   being  NO                                                                    
OBJECTION it was so ordered. Version P was adopted.                                                                             
                                                                                                                                
9:31:29 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:32:04 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:32:08 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly moved Amendment 1.                                                                                               
                                                                                                                                
     DELETE Sec.4                                                                                                               
                                                                                                                                
     Create a new preference right under AS 38.05.035                                                                           
                                                                                                                                
     (o)  Where there  is  an  active municipal  entitlement                                                                    
     selection on state land under  AS 29.65.010 - 29.65.030                                                                    
     that has a  state issued lease and  before the decision                                                                    
     to  approve  the  municipal entitlement,  the  director                                                                    
     shall  grant a  preference  right  to purchase  without                                                                    
     competitive bid of  up to five acres of  the state land                                                                    
     to an  individual who has  erected a  building approved                                                                    
     by a  lease on  the state  land and  used the  land for                                                                    
     bona fide business purposes for  10 or more years under                                                                    
     a state  lease, if the  business produced no  less than                                                                    
     25 percent  of the  total income  of the  applicant for                                                                    
     the 10 years preceding  the application to purchase the                                                                    
     land.  The director  shall  sell the  land  at a  price                                                                    
     determined  by the  director to  represent the  current                                                                    
     fair market value of the  unimproved land determined by                                                                    
     appraisal and survey, if not  already completed, at the                                                                    
     cost of the applicant. If  the director determines in a                                                                    
     written  finding that  the purchase  of the  land would                                                                    
     interfere  with public  use by  residents of  the area,                                                                    
     the  director may  condition the  purchase to  mitigate                                                                    
     the adverse  effects on  the public  or may  reject the                                                                    
     application if those effects can  not be mitigated. The                                                                    
     revenue from the  purchase of the parcel  will be given                                                                    
     to  the municipality  if the  municipal entitlement  is                                                                    
     approved   for  that   acreage.  In   this  subsection,                                                                    
     "business  purposes" means  a  purpose consistent  with                                                                    
     the classification  of the  land at  the time  the land                                                                    
     was  entered. In  this subsection,  "building" means  a                                                                    
     permanent   type  of   structure   with  solid   walls,                                                                    
     foundation, and roof.                                                                                                      
                                                                                                                                
Co-Chair Meyer OBJECTED for discussion.                                                                                         
                                                                                                                                
9:32:27 AM                                                                                                                    
                                                                                                                                
Ms. Marasigan explained that Amendment 1 deleted Section 4,                                                                     
and created a new preference right under AS 38.05.035. She                                                                      
invited the department to discuss the amendment.                                                                                
                                                                                                                                
9:33:00 AM                                                                                                                    
                                                                                                                                
Mr.  Fogels  explained  that   DNR  observed  problems  with                                                                    
Section 4 as stated in  the finance version. The first issue                                                                    
was that the CS deleted  a preference right deemed necessary                                                                    
to  the  department. He  proposed  focus  on the  preference                                                                    
right allowing  a leaseholder the option  of purchasing that                                                                    
lease.                                                                                                                          
                                                                                                                                
Co-Chair  Meyer  wondered   if  the  department's  testimony                                                                    
addressed Senator Bishop's concerns.                                                                                            
                                                                                                                                
9:33:53 AM                                                                                                                    
                                                                                                                                
Senator Bishop clarified that a  leaseholder could apply for                                                                    
the lease if the land would revert to a municipality.                                                                           
                                                                                                                                
Mr. Fogels  responded that  the option  would exist  for the                                                                    
lease holder  when the  land was  given to  the municipality                                                                    
through the municipal entitlements program.                                                                                     
                                                                                                                                
9:34:14 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  queried the impact of  the five years                                                                    
versus  ten years  and how  the  time frame  either hurt  or                                                                    
helped an  individual or municipality. Mr.  Fogels responded                                                                    
that the intent  of the extended time period  ensured that a                                                                    
person  invested  more in  their  piece  of land  indicating                                                                    
seriousness  about  their  presence.   He  stated  that  the                                                                    
department's leases were  typically for commercial purposes.                                                                    
The provision showed that a  commercial lease was viable and                                                                    
that 25  percent of income  was derived from  the commercial                                                                    
venture.                                                                                                                        
                                                                                                                                
9:35:10 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough wondered  if there  was a  particular                                                                    
title  holder  that  would  be  adversely  affected  by  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Mr. Fogels did not know.                                                                                                        
                                                                                                                                
Senator Hoffman  wondered how the amendment  would be viewed                                                                    
in light  of individuals with  long-term fish camp  sites on                                                                    
the Yukon  River. Mr. Fogels  responded that  the preference                                                                    
right  was only  for state  leases. If  the person  with the                                                                    
fish  camp  had  a  state lease  then  they  would  qualify,                                                                    
otherwise the provision would not apply.                                                                                        
                                                                                                                                
9:36:18 AM                                                                                                                    
                                                                                                                                
Senator  Olson  felt  that  there   was  no  protection  for                                                                    
Alaskans  with long-term  fish racks  if they  did not  have                                                                    
leases.                                                                                                                         
                                                                                                                                
Mr. Fogels responded that a  person holding a fish camp with                                                                    
a state lease  was able to purchase the land.  He added that                                                                    
many of  the fish  camps were on  private land,  which would                                                                    
not be affected.                                                                                                                
                                                                                                                                
9:37:11 AM                                                                                                                    
                                                                                                                                
Senator Olson  wondered about the  Water Resources  Board as                                                                    
established under Alaska statute.                                                                                               
                                                                                                                                
Mr.  Fogels responded  that the  Water  Resources Board  was                                                                    
dormant without funding or membership.                                                                                          
                                                                                                                                
Senator Olson found the information troublesome.                                                                                
                                                                                                                                
9:37:57 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  removed  his   objection.  There  being  NO                                                                    
OBJECTION, Amendment 1 was ADOPTED.                                                                                             
                                                                                                                                
9:38:26 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer asked about fiscal note changes.                                                                                 
                                                                                                                                
Ms.   Marasigan    responded   that   a    forthcoming   new                                                                    
indeterminate  fiscal note  would be  attached to  the bill.                                                                    
She asked the department to address the fiscal note.                                                                            
                                                                                                                                
9:38:52 AM                                                                                                                    
                                                                                                                                
Mr.  Fogels responded  that  the changes  to  the bill  were                                                                    
without fiscal impact.                                                                                                          
                                                                                                                                
Co-Chair  Meyer concurred.  He understood  that both  fiscal                                                                    
notes were without fiscal impact.                                                                                               
                                                                                                                                
9:39:20 AM                                                                                                                    
                                                                                                                                
Co-Chair  Kelly  MOVED to  REPORT  SCS  CS  HB 77  (FIN)  as                                                                    
amended  out of  committee  with individual  recommendations                                                                    
and   the  accompanying   fiscal  notes.   There  being   NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Co-Chair  Meyer   stated  that   a  separate   title  change                                                                    
resolution would accompany the bill.                                                                                            
                                                                                                                                
9:41:00 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:41:24 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:41:30 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly REMOVED his PREVIOUS  MOTION, for the purpose                                                                    
of correcting the  motion. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
9:41:47 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  MOVED to  REPORT  SCS  CS  HB 77  (FIN)  as                                                                    
amended  out of  committee with  individual recommendations,                                                                    
attached SCR  Title Change,  the accompanying  fiscal notes.                                                                    
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
SCS CS HB  77(FIN) was REPORTED out of committee  with a "do                                                                    
pass"  recommendation  and  a  new  zero  fiscal  note  from                                                                    
Department  of Natural  Resources, and  previously published                                                                    
zero fiscal note: FN2 (DFG).                                                                                                    
                                                                                                                                
9:42:51 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman  stressed  grave  concern  about  testimony                                                                    
regarding section 42. He intended  to allow the bill to move                                                                    
from committee, but would sign the report "amend."                                                                              
                                                                                                                                
9:43:37 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:46:08 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 74                                                                                                            
                                                                                                                                
     "An Act creating the University of Alaska building                                                                         
     fund for the payment by the University of Alaska of                                                                        
     the costs  of use, management,  operation, maintenance,                                                                    
     and   depreciation   of   space   in   buildings;   and                                                                    
     authorizing the  Board of Regents of  the University of                                                                    
     Alaska to designate buildings for  which the fund is to                                                                    
     be used."                                                                                                                  
                                                                                                                                
9:46:33 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly inquired about the dedicated fund.                                                                               
                                                                                                                                
HEATHER SHATTUCK, STAFF, SENATOR  PETE KELLY, related that a                                                                    
memo from Legal  Services was in members'  packets. The memo                                                                    
stated that the bill did not create a dedicated fund.                                                                           
                                                                                                                                
9:47:49 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:48:52 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair  Fairclough queried  the upper  limit of  bonding                                                                    
authority   for  the   university.   The  discussion   arose                                                                    
regarding the  engineering buildings.  She noted  that under                                                                    
AS 14.40.253  regarding financing  notice and  approval, the                                                                    
university  must return  to the  legislature to  communicate                                                                    
their debts, reasons and anticipated annual payments.                                                                           
                                                                                                                                
9:49:59 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  supported the bill, but  wondered how                                                                    
the  building  fund  would   be  capitalized.  She  reminded                                                                    
committee members  that the capital budget  language section                                                                    
suggested that  a building be  given to the  university. She                                                                    
wondered whether  the intention was  for seed money  for the                                                                    
building fund.                                                                                                                  
                                                                                                                                
9:51:29 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly MOVED  to REPORT SB 74 out  of committee with                                                                    
individual  recommendations  and   the  accompanying  fiscal                                                                    
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
SB  74  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation  and  with new  zero  fiscal  notes from  the                                                                    
University  of  Alaska,  Department of  Administration,  and                                                                    
Department of Revenue.                                                                                                          
                                                                                                                                
9:52:29 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:54:25 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 85                                                                                                            
                                                                                                                                
     "An Act relating to experimental vehicles."                                                                                
                                                                                                                                
9:55:18 AM                                                                                                                    
                                                                                                                                
BRITTANY HUTCHISON,  STAFF, SENATOR CLICK  BISHOP, explained                                                                    
the difference between  SB 85 and CS SB 85  (TRA). She noted                                                                    
that the  words "cold weather"  on page one were  removed to                                                                    
allow Alaska  to welcome all  types of vehicle  testing. She                                                                    
stated that Alaska  was marketed as a  reliable location for                                                                    
cold   weather  testing.   Currently  no   statutes  existed                                                                    
regarding registration for  experimental vehicles. She noted                                                                    
that one  company testing vehicles  was stopped  by troopers                                                                    
and asked  to register and  title their vehicles,  which was                                                                    
not desirable or  possible in Alaska. The  Division of Motor                                                                    
Vehicles  (DMV)  lacked   statutory  authority  to  register                                                                    
experimental vehicles.                                                                                                          
                                                                                                                                
Ms. Hutchison  continued that SB  85 would allow the  DMV to                                                                    
issue   experimental   plates    to   vehicle   manufacturer                                                                    
distributers  for  vehicle  testing.   The  plate  would  be                                                                    
valuable for  a 12 month period  and could be renewed  up to                                                                    
two times for a total  of 36 months. Following completion of                                                                    
the  experiment,  the vehicles  must  then  be destroyed  or                                                                    
taken out of the state.                                                                                                         
                                                                                                                                
Co-Chair   Meyer  noted   that   multiple  testifiers   were                                                                    
available  online for  questions. He  appreciated the  self-                                                                    
explanatory nature of the bill. He OPENED public testimony.                                                                     
                                                                                                                                
9:58:02 AM                                                                                                                    
                                                                                                                                
JIM  DODSON,  PRESIDENT,   FAIRBANKS  ECONOMIC  DEVELOPMENT,                                                                    
FAIRBANKS (via  teleconference), testified in support  of SB
85.  He  stated  that  Fairbanks  Economic  Development  had                                                                    
marketed to the cold-weather  testing industry for 20 years.                                                                    
He  noted  that  the   emerging  industry  was  diversifying                                                                    
Alaska's economy.  He pointed out that  the industry created                                                                    
more  than $500  million  worth of  economic activity  along                                                                    
with more than 300 jobs.  He claimed that Alaska offered the                                                                    
reliability, accessibility and  affordability needed for the                                                                    
industry. He noted that Alaska  had the greatest opportunity                                                                    
to advance its local economy.                                                                                                   
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
10:00:02 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer pointed  out the  zero fiscal  note. He  was                                                                    
happy for  the opportunity  to hear the  bill in  the Senate                                                                    
Finance Committee.                                                                                                              
                                                                                                                                
10:00:28 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly  MOVED to  REPORT  CS  SB  85 (TRA)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
CS SB  85 (TRA)  was REPORTED  out of  committee with  a "do                                                                    
pass"  recommendation  and  with previously  published  zero                                                                    
fiscal note: FN1 (ADM).                                                                                                         
                                                                                                                                
10:01:01 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:02:35 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 95                                                                                                            
                                                                                                                                
     "An  Act  relating  to  the  compensation,  allowances,                                                                    
     geographic differentials  in pay, and leave  of certain                                                                    
     public officials,  officers, and employees  not covered                                                                    
     by  collective   bargaining  agreements;   relating  to                                                                    
     certain  petroleum engineers  and petroleum  geologists                                                                    
     employed  by  the   Department  of  Natural  Resources;                                                                    
     relating to increased pay  for certain partially exempt                                                                    
     employees  of  the  state  in  specific  circumstances;                                                                    
     making  conforming  amendments;  and providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
10:02:51 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough MOVED to  ADOPT the proposed committee                                                                    
substitute  for  CS  SB 95  (FIN),  Work  Draft  28-GS1101\U                                                                    
(Wayne, 4/7/13).                                                                                                                
                                                                                                                                
Co-Chair Meyer OBJECTED for discussion.                                                                                         
                                                                                                                                
10:04:01 AM                                                                                                                   
                                                                                                                                
Ms. Marasigan  noted that  her office  worked to  create the                                                                    
work  draft before  the committee.  She  requested that  the                                                                    
department provide a bill overview for the committee.                                                                           
                                                                                                                                
10:04:43 AM                                                                                                                   
                                                                                                                                
CURTIS   THAYER,   DEPUTY    COMMISSIONER,   DEPARTMENT   OF                                                                    
ADMINISTRATION (DOA) introduced himself  and the director of                                                                    
labor relations,  Nicki Neal.  He noted  two changes  to the                                                                    
bill. The first  addressed section 20 and a  change that did                                                                    
not  comply with  current law.  The  change included  salary                                                                    
adjustments  for certain  exempt officers  and employees  of                                                                    
the executive  branch. He noted that  the employees received                                                                    
COLAs, but when the bill  was drafted the option was omitted                                                                    
for exempt  employees. The second  piece would  allow judges                                                                    
to receive  the geographic  differential language.  He would                                                                    
discuss the issue further in his overview of the bill.                                                                          
                                                                                                                                
10:06:01 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer  WITHDREW  his  OBJECTION.  There  being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
10:06:22 AM                                                                                                                   
                                                                                                                                
Mr. Thayer  presented the PowerPoint, "Alaska  Department of                                                                    
Administration,  Overview  of  HB   195  and  SB  95,  State                                                                    
Employee Condensation and Benefits" (copy on file).                                                                             
                                                                                                                                
Mr. Thayer  began with slide 2:  "What are HB 195  and SB 95                                                                    
About?"                                                                                                                         
                                                                                                                                
   · Consistency with cost of living, reduction of leave                                                                        
     accrual, cap on leave amount and decreases in the pay                                                                      
     increment                                                                                                                  
   · Enhance ability to recruit and retain highly-skilled                                                                       
     professionals                                                                                                              
   · Implementation of Geographical Pay Differential for                                                                        
     last phase of remaining employees                                                                                          
                                                                                                                                
Mr. Thayer  continued with  slide 3:  "Overview of  the Bill                                                                    
Sections."                                                                                                                      
                                                                                                                                
   · Section 1-4: Leave Accrual and Cap                                                                                         
   · Section 5: Petroleum Engineers/Geologists                                                                                  
   · Section 6-8: Cost of Living Increases                                                                                      
   · Section 9: Pay Increments                                                                                                  
   · Section 10: Partially-Exempt Salaries                                                                                      
   · Section 11-14: Geographic Pay Differentials                                                                                
                                                                                                                                
Mr. Thayer discussed  slide 4, "New Leave  Accrual and Cap."                                                                    
He  stated that  the accrual  rates were  negotiated by  the                                                                    
General  Government  Employees  Union and  the  confidential                                                                    
employees to  reduce leave  accrual for  new-hires beginning                                                                    
July 1,  2013. The new  accrual rating required 16  years of                                                                    
service to receive 270 hours  of leave. He mentioned the new                                                                    
mandatory  leave  usage requiring  an  employee  to use  two                                                                    
weeks of leave  annually if they had less than  400 hours in                                                                    
their leave  balance. If  an employee  had greater  than 400                                                                    
hours  of leave  as of  December 16th,  they must  use three                                                                    
weeks of leave annually.                                                                                                        
                                                                                                                                
Mr.  Thayer pointed  out the  new maximum  accrual limit  of                                                                    
1000 hours  for executive,  judicial and  legislative branch                                                                    
employees. The department discovered,  prior to drafting the                                                                    
bill that without a cap  the department faced a $164 million                                                                    
liability in  employee's leave. The top  ten state employees                                                                    
would  cost  the  state  $1.6  million  at  retirement.  The                                                                    
legislation  would reduce  the  state's  leave liability  by                                                                    
two-thirds.                                                                                                                     
                                                                                                                                
10:09:22 AM                                                                                                                   
                                                                                                                                
Vice-Chair   Fairclough  appreciated   the  administration's                                                                    
efforts.  She  asked  about  the   survey  provided  by  the                                                                    
McDowell Group.  She wondered how the  mandatory leave usage                                                                    
compared to the average accrual for state employees.                                                                            
                                                                                                                                
Mr.   Thayer  explained   that  the   study  addressed   the                                                                    
geographic  pay   differential,  which  was  located   in  a                                                                    
different  portion of  the bill.  The study  established the                                                                    
cost of living.                                                                                                                 
                                                                                                                                
10:11:00 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough  wondered if  the sick leave  had been                                                                    
rolled into paid time off.                                                                                                      
                                                                                                                                
Mr. Thayer responded  that the state utilized  Paid Time Off                                                                    
(PTO), which encompassed all forms of leave.                                                                                    
                                                                                                                                
10:12:20 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Fairclough  wondered  about a  study  or  survey                                                                    
comparing sick leave with PTO for best practice.                                                                                
                                                                                                                                
10:12:36 AM                                                                                                                   
                                                                                                                                
Nicki Neal,  Director, Division of Personnel,  Department of                                                                    
Administration explained  that a  survey of that  nature had                                                                    
not  been   commissioned  in  Alaska.  Prior   to  the  2013                                                                    
collective  bargaining,   a  survey  of  other   states  was                                                                    
performed.   The   department    received   responses   from                                                                    
approximately  15  states that  had  annual  and sick  leave                                                                    
programs.  The  responding  states  reported a  cap  of  450                                                                    
hours.                                                                                                                          
                                                                                                                                
10:13:08 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Fairclough  appreciated   the  compromises.  She                                                                    
wondered  how  robust the  benefits  provided  by the  state                                                                    
were. She  hoped that the  administration would  continue to                                                                    
work with the union  contractors to communicate the dynamics                                                                    
facing  the state.  She asked  about a  comparison of  leave                                                                    
accrual among other states and the federal government.                                                                          
                                                                                                                                
10:14:56 AM                                                                                                                   
                                                                                                                                
Ms. Neal  was not  sure about  comparisons with  the federal                                                                    
government, but  she offered to  provide the  information to                                                                    
the  committee.  Regarding  other  states,  Alaska  compared                                                                    
appropriately with  leave accrual. She pointed  out that the                                                                    
other states had both annual  and sick leave, whereas Alaska                                                                    
had PTO.                                                                                                                        
                                                                                                                                
10:15:12 AM                                                                                                                   
                                                                                                                                
Mr.    Thayer     looked    at    slide     5,    "Petroleum                                                                    
Engineers/Geologists."                                                                                                          
                                                                                                                                
   Section 5:                                                                                                                   
                                                                                                                                
   · Removes  exclusion of  in  Division  of Geological  and                                                                    
     Geophysical Surveys (DGGS).                                                                                                
   · Only  1   position  -  DGGS,  Energy   Section  Manager                                                                    
     (currently SU Geologist V) - vacant since March 17,                                                                        
     2012.                                                                                                                      
        o Position requires complete understanding of                                                                           
          petroleum systems analysis and exploration that                                                                       
          is obtained primarily through industry experience                                                                     
        o Industry salaries are approximately 50 percent                                                                        
          higher than current authorized salary (data from                                                                      
          Assoc of Petroleum Geologists 2011 Survey)                                                                            
        o Two national searches failed - No qualified                                                                           
          applicants after 45 days of recruitment and                                                                           
          advertising in national trade publications                                                                            
   · Amendment applicable to DNR, DGGS only                                                                                     
                                                                                                                                
10:16:16 AM                                                                                                                   
                                                                                                                                
Mr. Thayer discussed slide 6, "Cost of Living Increases."                                                                       
                                                                                                                                
   Sections 6-8:                                                                                                                
                                                                                                                                
   · Effective 7/1/13 - 1 percent                                                                                               
   · Effective 7/1/14 - 1 percent                                                                                               
   · Effective 7/1/15 - 2.5 percent                                                                                             
   · Consistent   with   terms    of   recently   negotiated                                                                    
     collective bargaining agreements                                                                                           
   · Applies to  noncovered classified and  partially exempt                                                                    
     (PX) and many exempt employees of the executive                                                                            
     branch, employees of the legislature (AS 24.10.011),                                                                       
     and the judicial branch.                                                                                                   
                                                                                                                                
10:16:32 AM                                                                                                                   
                                                                                                                                
Mr. Thayer highlighted slide 7, "Pay Increments."                                                                               
                                                                                                                                
   Section 9:                                                                                                                   
                                                                                                                                
   · Effective 7/1/15 the  percentage between pay increments                                                                    
     (J and above) will decrease from 3.75 percent to 3.25                                                                      
     percent                                                                                                                    
   · Consistent   with   terms    of   recently   negotiated                                                                    
     collective bargaining agreements                                                                                           
   · Applies  to noncovered  classified and  PX employees  -                                                                    
     also applies to many exempt employees through policy                                                                       
   · Applies to legislative branch if a policy has been                                                                         
     adopted (AS 39.27.011(j))                                                                                                  
                                                                                                                                
10:17:06 AM                                                                                                                   
                                                                                                                                
Mr. Thayer displayed slide 8, "Partially-Exempt Salaries."                                                                      
                                                                                                                                
   Section 10:                                                                                                                  
                                                                                                                                
   · Partially Exempt (PX) positions are subject to                                                                             
     classification and pay plans which limits flexibility                                                                      
   · State often not competitive for top talent - need some                                                                     
     flexibility for mission critical positions                                                                                 
   · Governor or designee on case-by-case basis:                                                                                
        o serves critical governmental interest of state                                                                        
        o employee possesses exceptional qualifications                                                                         
        o recruitment difficulties exist; or                                                                                    
        o necessary to compete with labor market                                                                                
   · Applies to executive branch Partially Exempt (PX)                                                                          
     employees only                                                                                                             
                                                                                                                                
10:18:36 AM                                                                                                                   
                                                                                                                                
Mr.   Thayer   discussed    slide   9,   "Geographical   Pay                                                                    
Differentials." He  noted that sections 11-14  addressed the                                                                    
survey conducted by McDowell Group  in 2008 and completed in                                                                    
2009.  The study  set the  base  at zero  for Anchorage  and                                                                    
South Central  Alaska. Based on  the outcome of  the survey,                                                                    
Fairbanks  would see  a 3  percent  pay differential,  while                                                                    
Juneau and  Sitka would see  5 percent. Kodiak,  Cordova and                                                                    
Valdez  would  see 11  percent.  Dillingham,  Nome, and  the                                                                    
Roadless Interior would receive  37 percent. Barrow, Bethel,                                                                    
Aleutians,  and South  West small  communities would  see 50                                                                    
percent.  Kotzebue, Unalaska/Dutch  Harbor would  receive 60                                                                    
percent.                                                                                                                        
                                                                                                                                
Mr.  Thayer  furthered  that the  change  would  affect  the                                                                    
executive branch  with an increase for  483 employees, while                                                                    
122 would see no loss in pay  and 727 would see no change at                                                                    
all. The  legislative branch would  have 154  employees with                                                                    
an  increase, 24  without a  loss  in pay,  and 204  without                                                                    
change. He  noted that  the study  was performed  every five                                                                    
years depending on appropriations.                                                                                              
                                                                                                                                
10:20:34 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer  looked at  slide 9 and  opined that  the Tok                                                                    
and  Glennallen   Regions  would  be  more   expensive  than                                                                    
Anchorage.                                                                                                                      
                                                                                                                                
Mr. Thayer raised the same  question initially, and was told                                                                    
that  the  survey  viewed  the   cost  of  living,  housing,                                                                    
utilities,   food  and   transportation   when  making   the                                                                    
recommendations.                                                                                                                
                                                                                                                                
10:21:27 AM                                                                                                                   
                                                                                                                                
Co-Chair Kelly  wondered if the  percent above the  base was                                                                    
considered in the retirement calculations.                                                                                      
                                                                                                                                
Ms. Neal responded that a  Tier One employee was considered,                                                                    
otherwise  a person  must work  50  percent of  time in  the                                                                    
location  to receive  the geographical  pay differential  on                                                                    
retirement.                                                                                                                     
                                                                                                                                
10:22:15 AM                                                                                                                   
                                                                                                                                
Co-Chair   Meyer   wondered    if   the   geographical   pay                                                                    
differentials were budgeted into the operating budget.                                                                          
                                                                                                                                
Co-Chair Kelly replied that the  bill's cost was included in                                                                    
the fiscal note.                                                                                                                
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
10:23:28 AM                                                                                                                   
                                                                                                                                
Mr. Thayer  discussed the fiscal notes,  which were prepared                                                                    
by  the Office  of  Management and  Budget  (OMB) and  would                                                                    
implement changes in  the first year of  the contract, which                                                                    
is when  the geographic  differential would take  effect. In                                                                    
FY 15  a decrease  would be seen.  The 2.5  percent increase                                                                    
would be seen in FY 16.                                                                                                         
                                                                                                                                
Co-Chair  Kelly   wondered  if  the  total   amount  of  the                                                                    
contracts was less than originally anticipated.                                                                                 
                                                                                                                                
Mr.  Thayer  concurred.  He  explained  that  various  union                                                                    
negotiations altered the projected figures.                                                                                     
                                                                                                                                
10:25:14 AM                                                                                                                   
                                                                                                                                
Co-Chair Kelly opined  that the fiscal note  fit well within                                                                    
the expectations.                                                                                                               
                                                                                                                                
10:25:49 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer  pointed  out that  the  fiscal  note  would                                                                    
change with the CS's inclusion of the courts.                                                                                   
                                                                                                                                
Mr.  Thayer   stated  that   the  court   sought  geographic                                                                    
differential  pay  for 23  judges,  which  would affect  the                                                                    
fiscal note minimally.                                                                                                          
                                                                                                                                
Vice-Chair   Fairclough    addressed   the    fiscal   notes                                                                    
individually. She noted that the  first fiscal note affected                                                                    
OMB in  FY 14 by $8,171,900,  in FY 15 by  $4,821,800 and FY                                                                    
16  by  $10,644,000.  The  bill  related  to  compensations,                                                                    
allowances, geographic  differentials in  pay and  leave for                                                                    
certain   public  officials,   employees   not  covered   by                                                                    
collective  bargaining  and  related  to  certain  petroleum                                                                    
engineers  and  geologists  employed by  the  Department  of                                                                    
Natural Resources  (DNR). Beginning in FY  14, salaries were                                                                    
increased by 1  percent, same for FY 15, but  an increase of                                                                    
2.5 percent was  anticipated for FY 16.  The salary schedule                                                                    
matched the recent negotiated  agreement reached between the                                                                    
state and the supervisory and general government units.                                                                         
                                                                                                                                
Vice-Chair Fairclough continued with  the second fiscal note                                                                    
for the  Legislative Branch.  In FY  14, $1,281,200,  FY 15,                                                                    
$410,400 and FY 16, $1,039,300  was stated. The final fiscal                                                                    
note was for  the Alaska Court System that  would be amended                                                                    
by  the 23  judges as  explained earlier.  The third  fiscal                                                                    
note  showed $741,900  for FY  14,  $749,100 for  FY 15  and                                                                    
$1,890,900 for FY 16.                                                                                                           
                                                                                                                                
10:28:30 AM                                                                                                                   
                                                                                                                                
Senator Hoffman remarked that legislators  would not see pay                                                                    
increases as a result of the legislation.                                                                                       
                                                                                                                                
Co-Chair  Meyer  asked  if  the  bill  pertained  to  staff.                                                                    
[Response was indecipherable]. He  understood that the total                                                                    
dollar amount was less than anticipated.                                                                                        
                                                                                                                                
Co-Chair Kelly replied yes.                                                                                                     
                                                                                                                                
Co-Chair Meyer  stated that the  fiscal note was  large, but                                                                    
so  was   the  number  of  employees.   He  appreciated  the                                                                    
negotiation process.  He was unsure  about whether  the deal                                                                    
was ratified.                                                                                                                   
                                                                                                                                
Mr.  Thayer replied  that the  supervisory unit  was in  the                                                                    
process of  ratification and expected  the wrap up  to occur                                                                    
later   in  the   month.  The   general  services   expected                                                                    
ratification in  the later part of  May, due to the  size of                                                                    
their bargaining unit. He clarified  that 23 judges would be                                                                    
eligible for the geographical pay differential.                                                                                 
                                                                                                                                
10:30:15 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly  MOVED to  REPORT  CS  SB  95 (FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CS SB  95 (FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass" recommendation and with a  new fiscal impact note from                                                                    
the  Legislature;  new fiscal  impact  note  from the  Court                                                                    
System;  and previously  published fiscal  impact note:  FN1                                                                    
(GOV).                                                                                                                          
                                                                                                                                
10:31:53 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:32:09 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 96                                                                                                            
                                                                                                                                
     "An Act  relating to the  primary period of an  oil and                                                                    
     gas or  gas only  lease and the  extension of  a lease;                                                                    
     relating to terms  to be included in an oil  and gas or                                                                    
     gas only lease;  relating to rental for an  oil and gas                                                                    
     or  gas  only lease;  and  providing  for an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
10:32:45 AM                                                                                                                   
                                                                                                                                
SENATOR PETER  MICCICHE introduced SB 96.  He explained that                                                                    
SB 96 proposed  changes to the oil and  gas leasing statutes                                                                    
to  provide the  commissioner  of DNR  with  the ability  to                                                                    
grant a  one-time extension  to the primary  term of  an oil                                                                    
and gas or gas-only lease, up to 10 years.                                                                                      
                                                                                                                                
10:33:26 AM                                                                                                                   
                                                                                                                                
LARRY  SEMMENS,  STAFF,  SENATOR PETER  MICCICHE  introduced                                                                    
himself. He  provided a brief  overview of  the legislation.                                                                    
He  stated that  the department  and the  industry supported                                                                    
the bill.  He pointed out  that the  bill had a  zero fiscal                                                                    
note  with an  indeterminate  revenue  impact. He  explained                                                                    
that the bill  corrected an issue with  short-term leases of                                                                    
five  to  seven years.  He  mentioned  situations where  the                                                                    
short-term leases should be extended  to the normal ten-year                                                                    
lease  term.  He  mentioned that  gas-only  leases  did  not                                                                    
expire  as long  as production  occurred from  the lease  or                                                                    
unitization of the lease.                                                                                                       
                                                                                                                                
Mr.  Semmens continued  that SB  96  provided the  statutory                                                                    
authorization  to extend  the lease  if it  was in  the best                                                                    
interest of the state to do so.                                                                                                 
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
SB  96  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
10:36:14 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:36 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 95 - NEW Sectional Analysis.pdf SFIN 4/8/2013 9:00:00 AM
SB 95
SB 95 - Sectional Analysis.pdf SFIN 4/8/2013 9:00:00 AM
SB 95
SB 96_SFIN_4-8-13.pdf SFIN 4/8/2013 9:00:00 AM
SB 96
SB 96 Sectional.pdf SFIN 4/8/2013 9:00:00 AM
SB 96
SB96.Apache letter.pdf SFIN 4/8/2013 9:00:00 AM
SB 96
Sponsor Statement SB 96.pdf SFIN 4/8/2013 9:00:00 AM
SB 96
SB 85 Alaska Aerofuel Letter of Support.pdf SFIN 4/8/2013 9:00:00 AM
SB 85
SB 85 FEDCo Letter of Support.pdf SFIN 4/8/2013 9:00:00 AM
SB 85
SB 85 CS Memo.pdf SFIN 4/8/2013 9:00:00 AM
SB 85
SB 85 Sponsor Statement.pdf SFIN 4/8/2013 9:00:00 AM
SB 85
SB 85 VWGoA Support.pdf SFIN 4/8/2013 9:00:00 AM
SB 85
HB 77 Amendment 1.pdf SFIN 4/8/2013 9:00:00 AM
HB 77
SB 74 - Dedicated Fund Question Legal Memo.pdf SFIN 4/8/2013 9:00:00 AM
SB 74
CS for SB 95 State Employee Compensation and Benefits.pdf SFIN 4/8/2013 9:00:00 AM
SB 95
DOA_SB95-HB195_BillOverview(April2013).pptx SFIN 4/8/2013 9:00:00 AM
HB 195
SB 95
HB77SCSCS(FIN)-DNR-MLW-4-8-13.pdf SFIN 4/8/2013 9:00:00 AM
HB 77
SB95-ACS-000-04-02-13.pdf SFIN 4/8/2013 9:00:00 AM
SB 95
SB074-UA-SYSBRA-4-01-13.pdf SFIN 4/8/2013 9:00:00 AM
SB 74
HB 77 Wrangell Resolution Opposition.pdf SFIN 4/8/2013 9:00:00 AM
HB 77
HB 77 Public Testimony - Sandberg.pdf SFIN 4/8/2013 9:00:00 AM
HB 77
HB 77 Publit Testimony Opposition - Hillstrand.pdf SFIN 4/8/2013 9:00:00 AM
HB 77
SB 26 AK Chapter comment 22March2013.pdf SFIN 4/8/2013 9:00:00 AM
HB 77
SB 26