SENATE BILL NO. 48 "An Act authorizing the Department of Natural Resources to lease land for carbon management purposes; establishing a carbon offset program for state land; authorizing the sale of carbon offset credits; and providing for an effective date." 5:12:11 PM Co-Chair Olson relayed that SB 48 had been heard by the committee on May 8, at which time the committee had heard public testimony. The co-chairs had requested amendments, most of which were incorporated into a CS. 5:12:39 PM AT EASE 5:12:48 PM RECONVENED Co-Chair Olson informed that there was a CS to consider. 5:13:00 PM AT EASE 5:13:20 PM RECONVENED Co-Chair Stedman MOVED to ADOPT proposed committee substitute for SB 48, Work Draft 33-GS1372\U (Dunmire,5/11/23). Co-Chair Olson OBJECTED for discussion. 5:13:51 PM KEN ALPER, STAFF, SENATOR DONNY OLSON, explained that there were a lot of technical changes to the bill, which was relatively long. The committee had worked closely with the Department of Natural Resources (DNR) as well as members of the Senate Resources Committee, where there had been a number of amendments to consider and refine. He addressed a Summary of Changes Document (copy on file): Fund Status of Carbon Revenues Removed the creation of a separate "carbon offset revenue fund." Carbon revenues are presumptively UGF but separately accounted for and may be used by the legislature to make appropriations to support the program. Use of Procurement Code The blanket procurement code waiver is now limited to only contracts between the state and the "registries." Other contracts related to carbon projects would be subject to the code. Removed the requirement for legislative approval of certain contracts, and replaced with a limitation that contracts not pay the contractor more than a 30% commission. Solicitation of Competitive Interest When there is an application to lease state land for carbon management, DNR must issue public notice and solicit competing applications on that same land. Examining Monetary Proposals For both leases and contracts, clarifies that the revenue potential to the state should be a criterion when evaluating competing proposals. Ensuring Other Resources Not Impacted A variety of clarifying amendments were made to ensure any carbon projects consider the potential impacts to mining, timber, and other resource development sectors. State land used for carbon management must remain open to mineral exploration. Class 6 Well Primacy Authorizes AOGCC to take enforcement responsibility for underground injection in Class VI wells. This is a provision from the carbon storage bill, but will take several years to implement. This ensures Alaska projects are able to make maximum use of federal carbon tax credits. Mr. Alper continued to address the summary document: Other Technical Changes Replaced certain terms such as "validate," "verify," and other current industry terms with more general language to account for potential changes in registry protocols as the industry matures. Mr. Alper explained that the other technical changes regarding certain terms were made at the request of DNR. 5:19:22 PM JOHN BOYLE, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, relayed that the department was continuing to look through the CS in detail. He expressed appreciation for the committee and staff that worked on the changes. He looked forward to continuing the dialogue. 5:19:55 PM RENA MILLER, SPECIAL ASSISTANT TO THE COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, relayed that she had nothing to add. 5:20:11 PM AT EASE 5:20:16 PM RECONVENED Co-Chair Olson WITHDREW his objection. There being NO further OBJECTION, it was so ordered. The CS for SB 48 was ADOPTED. SB 48 was HEARD and HELD in committee for further consideration.