CSHB 207(FIN) am ADJUSTMENTS TO OIL AND GAS ROYALTIES                    
                                                                              
 SENATOR LEMAN brought CSHB 207(FIN) am before the committee as the            
 first order of business.  He stated testimony would be taken from             
 witnesses present at the Anchorage LIO and that the committee would           
 continue to work on a Resources SCS.                                          
 Number 030                                                                    
                                                                               
 JOHN PETERSON, Chief Estimator, Alaska Interstate Construction,               
 Anchorage, said as a 45-year resident of Alaska, he has seen all              
 resource development diminish as a result of regulations and                  
 legislation passed by agencies that Alaskans cannot control.                  
 Alaskans are continuing to be denied access to their resources by             
 various influences.  Alaska is at a competitive disadvantage in               
 attracting capital investments because of high transportation,                
 exploration development costs. etc., and Alaska needs a strategy to           
 counter these disadvantages.  He believes CSHB 207(FIN) am will               
 provide the industry with enough protection and incentives to                 
 pursue development of the smaller marginal fields by removing a               
 portion of the monetary risks.  It will also encourage the state              
 and industry to work together to change the economic equation of              
 marginal fields.                                                              
                                                                               
 Number 101                                                                    
                                                                               
 TOM LAKOSH, testifying from Anchorage, said he believes the                   
 proposal in HB 207 is untenable under contract law or                         
 administrative procedures, especially because it will be applicable           
 to leases which have already been let.  He believes it will open              
 the State of Alaska to a large liability from potential lessees               
 that have bid on those sites at a fairly competitive rate and who             
 now find that they were bypassed by companies who had no intention            
 of fulfilling their lease contracts.  Further, it also violates the           
 rights of Alaskans to due process, because the legislature is                 
 planning to change the conditions of those leases without proper              
 due process for its citizens.                                                 
                                                                               
 There being no further witnesses wishing to testify, SENATOR LEMAN            
 closed the public hearing on HB 207 and stated the committee would            
 take a brief at ease.