SENATE BILL NO. 170 "An Act authorizing the Department of Natural Resources, division of geological and geophysical surveys, to collect fees for facilities, equipment, products, and services; relating to accounting for certain program receipts; and providing for an effective date." 9:07:26 AM SENATOR CATHY GIESSEL, SPONSOR, explained that SB 170 would make the Department of Natural Resources (DNR) a greater revenue generator. She presented a core from an oil field drill. She explained that the Geological Material Center (GMC) had been located for several decades in Eagle River, where materials had been stored in conexes (unheated metal containers) and had been exposed to cold and moisture, causing deterioration. She relayed that DNR had bought the Sam's Club building in East Anchorage from Walmart Corporation several years ago, and that the structure had been reconfigured as the Geologic Materials Center. She said that the library of rocks contained in the building could generate revenue because it was of interest to exploders. She referred to the document, "FAQs related to Senate Bill 170"(copy on file). The document contained a statement from Repsol, and the role of the center in their recent discovery on the Colville Delta; the GMC had facilitated in the discovery and exploration of the area, possibly the largest oil field discovered since Prudhoe Bay. She related that DNR currently did not have the authority to charge for use of their facility, the bill was intended to establish that authority. 9:10:39 AM Co-Chair MacKinnon looked at Page 1, lines 11 and 13, which spoke to the printing and publication of reports. She wondered whether the figure was antiquated, or had digital imaging been explored as an alternative to publishing and printing hard copies. Senator Giessel replied that all of the materials were available to view online, but that most people liked to work from actual paper copy maps. 9:11:36 AM AKIS GIALOPSOS, STAFF, SENATOR CATHY GIESSEL, discussed the Sectional Analysis (copy on file): *Section 1. Provides that fees collected by the Department of Natural Resources (department) under AS 41.08.045, added by bill section 3, will be accounted for separately and that appropriations from these fees are not made from the unrestricted general fund. *Section 2. Conforms AS 41.08.030 to the changes made to AS 41.08 by section 3 of the bill. *Section 3. Adds a new section to AS 41.08 permitting the department's division of geological and geophysical surveys to charge and collect fees for facilities, equipment, products, or services that the division offers. Institutes a fee waiver for students using the facilities, equipment, products or services for educational purposes. *Section 4. Amend uncodified law to permit the department to adopt regulations necessary to implement changes made by the Act. *Section 5. Makes section 4 effective immediately. *Section 6. Gives sections 1-3 an effective date of July 1, 2016. 9:14:07 AM Senator Bishop wondered how the department would arrive at a fee schedule. 9:14:31 AM STEVE MASTERMAN, DIRECTOR, DIVISION OF GEOLOGICAL AND GEOPHYSICAL SURVEYS, DEPARTMENT OF NATURAL RESOURCES FAIRBANKS (via teleconference), stated that the fee schedule was currently under evaluation and would be an amalgam of fees charges in other states. He stated that they did not want to discourage use by setting fees too high. 9:15:56 AM Senator Giessel looked at Page 4 of the aforementioned fact sheet, which reflected a bar graph illustrating core repository service fees in other states. 9:16:22 AM Co-Chair MacKinnon wondered why the word "shall" had been used instead of "may" on Page 2, line 25 of the bill. Mr. Gialopsos responded that the division had intended to promulgate regulations to do the waiver for students. He furthered that the statutory regulation was intended to ensure that students using the facilities would still be able to do so, without the danger of regulations rescinding themselves. 9:17:26 AM Vice-Chair Micciche commented that industry would offset the cost of running the facility, and that the language was in no way meant to discourage students from using the facility. 9:17:52 AM Co-Chair MacKinnon wondered what would keep industry from using students or interns in order to bypass paying fees for facility use. Senator Giessel looked at page 2 of the facts document, and pointed out that public school groups constituted only 5 to 10 percent of the annual visitors to the facility. She said that the intention had that elementary, junior high, and high school classes that might be interested in geological careers would be able to visit the facility at no charge. She spoke to Co-Chair MacKinnon's concern that "students" was a broad term, but she believed that the division was clear on the intent of the sponsor. She trusted that the level of student that would be allowed to enter for free would be clearly defined in regulation. Co-Chair MacKinnon understood that Senator Giessel viewed university students and academics differently than the student intended under the waiver. Senator Giessel replied that that had been the intention of the Senate Resources Committee. 9:19:43 AM Co-Chair MacKinnon though that the language could be more specific. 9:20:08 AM Vice-Chair Micciche felt that an intern working under contract with an industry party would have their fees covered by the industry employer. He specified that his intent had been that the facility would be available for free to individual students who were interested in doing research in the facility. 9:20:51 AM Senator Olson queried that amount of anticipated revenue from the facility. Senator Giessel deferred to Mr. Masterman. 9:21:15 AM Co-Chair MacKinnon directed committee attention to the fiscal note, which reflected that revenue was expected to increase as usage grew; up to $485 thousand by FY 22. 9:21:54 AM Mr. Masterman interjected that the fiscal note contained estimates that were based on the past history of usage and new services that the facility planned to offer. He said that the picture would become clearer after the facility began charging revenue. 9:22:44 AM Senator Bishop offered support for the legislation. 9:23:28 AM Vice-Chair Micciche wondered whether the members of industry could obtain electronic seismic data from the facility. Mr. Masterman replied in the affirmative. He said that the intent was to work with the division to make the seismic surveys available through the GMC. 9:24:12 AM Vice-Chair Micciche asked whether it would be the most valuable data at the center. Mr. Masterman replied that it was a possibility, and there was a hope that such valuable information would provide a significant revenue stream for the facility. 9:24:59 AM Co-Chair MacKinnon wondered why there the anticipated revenue did not result in a corresponding drop in the General Funds reflected in the fiscal note. Mr. Masterman responded that at this point the revenue was intended to bring the building into the public building fund, which had an entry level threshold. He said that until the GMC revenue reached the threshold to enter the fund, the revenue generate would enter the General Fund. He believed that the fiscal note offered further explanation. Co-Chair MacKinnon OPENED public testimony. Co-Chair MacKinnon CLOSED public testimony. 9:27:32 AM AT EASE 9:29:48 AM RECONVENED SB 170 was HEARD and HELD in committee for further consideration.