SB 242-GEOTHERMAL RESOURCE TAX CREDITS                                                                         
                                                                                                                                
5:12:30 PM                                                                                                                    
CO-CHAIR MCGUIRE  announced the  next order  of business  to come                                                               
before the committee was SB 242.                                                                                                
                                                                                                                                
CO-CHAIR MCGUIRE moved to adopt conceptual Amendment 1.                                                                         
                                                                                                                                
CO-CHAIR WIELECHOWSKI objected for the purpose of discussion.                                                                   
                                                                                                                                
MR. PAWLOWSKI said the first  change in conceptual Amendment 1 is                                                               
based  on input  from the  Department of  Revenue and  is in  the                                                               
exploration tax  credit section on  page 1,  line 14 and  page 2,                                                               
line 1. The  new language in the amendment  says [the exploration                                                               
credit] cannot  be carried forward  until following the  year the                                                               
exploration expenditure  was incurred.  He said this  clarifies a                                                               
mistake in the drafting.                                                                                                        
                                                                                                                                
The second  change offered in  conceptual amendment 1 is  on page                                                               
3,   line  8   in   the  definition   of  qualified   exploration                                                               
expenditure.  The  definition  reads  "to  explore  a  previously                                                               
unknown  geothermal resource"  but because  the state  leased the                                                               
area  for a  geothermal resource,  "previously unknown"  does not                                                               
make sense. The amendment deletes those words.                                                                                  
                                                                                                                                
CO-CHAIR  WIELECHOWSKI  removed   his  objection  and  conceptual                                                               
Amendment 1 was adopted.                                                                                                        
                                                                                                                                
CO-CHAIR  WIELECHOWSKI moved  to adopt  Amendment 2,  labeled 26-                                                               
LS1347\R.1.                                                                                                                     
                                                                                                                                
                          AMENDMENT 2                                                                                       
                                                                                                                                
     OFFERED IN THE SENATE       BY SENATOR WIELECHOWSKI                                                                        
     TO: SB 242                                                                                                                 
                                                                                                                                
     Page 2, following line 19:                                                                                                 
          Insert a new subsection to read:                                                                                      
           "(e)A person that receives a credit under                                                                            
     (b) or (c) of this section,                                                                                                
                    (1)shall reduce a cost related to the                                                                       
     geothermal  resource that  would otherwise  be included                                                                    
     in a  proceeding for determining a  just and reasonable                                                                    
     rate under  AS 42.05.381 by the  amount of  the credit;                                                                    
     and                                                                                                                        
             (2)may not elect to be exempt from the                                                                             
     provisions of AS 42.05."                                                                                                   
                                                                                                                                
     Reletter the following subsection accordingly.                                                                             
                                                                                                                                
                                                                                                                                
CO-CHAIR MCGUIRE objected for purposes of discussion.                                                                           
                                                                                                                                
CO-CHAIR  WIELECHOWSKI explained  that amendment  2 [labeled  26-                                                               
LS1347\R.1]  says any  production tax  credits that  are received                                                               
shall  pass through  to  the  consumer. The  second  part of  the                                                               
amendment, line 7,  says that anyone who receives  this credit is                                                               
required  to be  regulated  by the  RCA. This  is  an attempt  to                                                               
protect  the consumers  by making  sure these  fairly significant                                                               
benefits and credits pass through to the consumer.                                                                              
                                                                                                                                
CO-CHAIR  MCGUIRE removed  her objection  and  seeing no  further                                                               
objection, Amendment 2 was adopted.                                                                                             
                                                                                                                                
SENATOR WIELECHOWSKI moved  to report CS for SB  242, LS1347\R as                                                               
amended,  from  committee  with  individual  recommendations  and                                                               
accompanying  fiscal  notes.  There   being  no  objection,  CSSB                                                               
242(RES) moved from the Senate Resources Standing Committee.