Several things were covered in the discussion of the bill this morning which was passed out of the committee to House Judiciary with a 5 yea 2 Nay vote.
Here's the 
overview and below I have more detailed notes.
1.  Changes to the Bill. [37:30 of the audio below.] Bill sponsor Linda Menard said there were some changes added in Sec. 2.  The major change was to add language to note that the song was copyrighted and other than non-profit use needed approval.  There were some typographical changes as well.
2. What Does Native Mean?  This became a heated discussion and I've gone over today's audio to get as close a transcript as I can.  Rather than try to describe it you can read it and listen to it on the audio.  It begins at 42:16 on the audio.  
3.  
Copyright Issues.  Rep. Johnson began this discussion.  To what extent do the copyright restrictions in the new section 2 restrict people from singing the song?  It does seem to allow non-profits to use the song.  Rep. Wilson wanted to know if a local group reproduced the song to sing and didn't include the copyright language what would happen to them?  Rep. Petersen citing his musical experience said it was only intended for people who want to make a profit off the song.  Rep. Gruenberg said he didn't know this part of the law and that since the bill was going to Judiciary next, where legal issues are considered, the committee should pass it on for Judiciary to deal with.  They amended the bill, with the consent of the sponsor, to remove section 2 which includes the copyright information. And the bill passed.  
4.  Changing History and Culture.  Rep. Gatto made a final statement about his opposition to changing history and culture. This is so interesting that I'm going to make it a separate post so people can carefully consider Rep. Gatto's argument against change.  
Below are my notes which give more details.  
AGAIN Regard these as my rough running notes and use the audio to check for detailed accuracy.
1.  Changes to the bill.  SB 43 to CSSB 43. (Committee Substitute for Senate Bill)[Begins at 42:16 on the audio below.] 
My name is Senator Linda Menard, I represent  District G.
Three very small changes that arose from copyright infringement.  
Added to be sure on line 5 made clear who is the  composer of the song second verse.  Multiple words and punctuation were  changed to be sure it complies with copyright.  This was an oversight of  the drafter.  Copyright to University of Alaska.  
Line 13  removes comma between northern and midnight, etc.  
Very simple  changes to get this as exact as we can get it. 
Wilson:  Thank you  Mr Chairman.  I can't think how it can be sung on page two, line nine.   With the words, sentence ending in the middle there.  Just my head.  It  will still be sung the way the wording was. . . I don't know how that will come out.
Lynn:  That's common  in poetry.
2. What Does Native Mean? [This section is pretty close to verbatim] [42:16 on audio]
Gatto:  Sen Menard.  Is there a definition or a  difference between the  word Native and the word Alaska Native?
Menard:  I don't believe there is.  I don't know  what your concern is Rep. Gatto.
Gatto:  Well, I'll tell you. My children are natives, born in Alaska they are native Alaskans,  but they are not an Alaska Native.  I believe Mr. Chair, the purpose of the song was to honor the native or the Alaskan Native and I don't see that distinction made anywhere.  
Menard: This would be, probably, an argument for semantics.  Whatever your interpretation is.  I can appreciate you are of the belief that your children are native.  And, of course, most of us  given the date this was written were referring to the Alaska Native.  
Lynn:   This is semantic. It's been a controversy for years. Are you Native American or not, well yes I am.  It depends how you define Native.  It's a controversy probably outside the scope of this bill.
Gatto:  I disagree Mr. Chair.
Lynn:  That's why we have a committee.
Gatto:  The intent of  the sponsor of the bill was not to honor her children or my children or your children.   But to honor... tell me . .  was it to honor our children?  Mine?  Whose? Whose?   What's your intent in establishing the second verse, to honor whom? 
Menard: I've stated that.  My intent is not to get into a debate. 
Gatto:  I'm sorry your honor, I'm really asking a question and not getting an answer.  This is the place for debate. If we don't debate in a committee, I'm not sure if we have to go to the lounge first?  But this is the committee, I'm a committee member.  I'm asking a question You can refuse to answer or whatever.  But that's a question.
Menard:  I . . . 
Gruenberg: Mr. Chair, I'm going to impose a point of order.  He is harrassing the witness. And I'd appreciate if he didn't do that.
Gatto:  I'm going to object to that point of order.  These are reasonable questions. . . 
Lynn:  At ease.  [Goes off the record.]
Back on the record.
45:29Lynn:  I have a  note from House records. I was told  that it is a capital N it refers to Alaska  Native, if it is small n it means native Alaskans.  If the N in the bill is capital N then it refers to Alaska Natives, and not those of us who may have been born in Alaska.
Menard:  Thank you Mr. Chair, I think we've all learned something.
Gatto:  I've learned something too. I've never heard of that before.  Thank God for House Records.  
3.  Copyright Issues. [46:25 on the audio.]
Johnson.  My  question is on section two.  Is this a new section?  If I pass out a  copy of the Alaska Flag song and I'm not a non-profit,   Is  this a copyright violation? [Rep. Johnson has worked in radio.]
Menard:  20 year limit,
Leg  Legal online: 
Johnson:  All other rights reserved.  If I print up  the song and hand it out at the hockey game am I violating the  copyright.  
Bullard:  I don't know a great deal about copyright  light law, but if it has this note on the sheet you distribute, the law  would be satisfied. 
Lynn:  Would this be the same for any other  copyrighted song passed out at a game?
Johnson:  Any other song is a  member of 
ASCAP or 
BMI and that money is distributed to the authors.   So if you sing Happy Birthday, it has been calculated and the writer is  being paid.  When you sing that song it is not free, so I don't agree  with that interpretion.  If we bring this into the copyright, I want to be  sure we aren't doing that.
Wilson: The comment was made that the  20 year copyright was over.  Is there a copyright on the second verse?   You were talking about the first verse.
Menard:  The second verse  has a copyright.  But the foundation doesn't have a concern.  
Rovito:   The foundation's concern is that the second verse of the song is fine  with how we want to use this, they just want to be sure that the  copyright is included in the song.
Wilson:  My concern is that  someone would print this up not realizing they had to put the copyright  on it.  What would happen to them?
Rovito:  I'm not sure.  I can  find out certainly.
Seaton:  I'd just like to bring up this says,  can be produced for public use and non-profit permitted.  So, if you  were printing them up and selling them, this is waiving the copyright  fee for non-profit use.  Does the University of Alaska Foundation have  the copyright to both the first AND second verse.  So this is covering  both verses.
Menard:  Yes.
Gruenberg:  I'm very concerned  from a legal point of view about the question that Rep Johnson asked.   We don't know.  It goes to judiciary next.  That is why it goes to  Judiciary.  I'm concerned about the limit of the copyright and will ask  the sponsor and be sure we have real copyright lawyers.  That will be my  lookout in that committee.  It must be absolutely properly drafted.   Otherwise the tail would wag the dog.  Would the University be able to  drop section two?  
Lynn:  I like what you are saying on that  point 
Johnson:  I tend to agree with that.  They could move this  into public domain.  If they have no reason down the line to gain.   Non-profit permitted, all other uses reserved.  I read that to not  permitting other uses.
Petersen:  I've been involved in playing  and singing music for over 40 years.  This is the basic disclaimer on  all music.  If you buy that sheet music in a music store, you can use  that music for yourself, but if you try to make a profit on it.  That's  when you have to go the BMI group and pay your money.  As long as you  are using it for a non-profit use - sing it at the ball game - this is  the classic disclaimer used in any public sense.
Johnson:  Rep.  Petersen makes my point exactly.  That is why it is on the music, so the  copyright holder.  . . I would encourage that we delete it if we choose and  let Judiciary put it back in.  
Lynn:  That might be the way out  of it. Sponsor's feeling?
Menard:  That's fine.  I have an acquaintance,  from your district Mr. Gatto, she wants to sing the second verse, but  she so much wants to have the recognition of the second verse.  I  understood from Fran Ulmer who I highly respect.  She thinks it is  worthy. The University says they will release that second verse.  
Gruenberg:   I feel comfortable with that amendment.  One question I'd like to have  answered.  I know nothing about this area of the law.  Do we need to  put something in to say it is in the public domain?  We all remember  when you could sing Happy Birthday and now you can't do it because  someone owns the copyright.  
Wilson:  I'm comfortable with, the  sponsor, I just want her to check out before the next committee, because  it says "they must have the following notice", if someone doesn't, what  is the consequence.
Gatto:  Rep. Gruenberg, please don't  interrupt.  Is a person disallowed for singing the second verse after  they sing the first verse?
Menard:  No they would not be arrested.
Gatto:   I know the person you mentioned.  Why doesn't that person sing the  second verse.  
Menard:  Becasue the state doesn't recognize it as  the official second verse.  She would like it elevated to official.
Johnson:   I'll make this conceptual [A conceptual amendment isn't the exact language.  Leg Legal will take the concept and draft the amendment.]  Section two delete all language.
Amendment  adopted.
CSSB 43 Any objections.
4.  Changing History and Culture.  [64:41 on the audio.] 
I'm going to make this a separate post so people can consider Rep. Gatto's perspective on change and culture carefully.   
Final comments before voting: 
Gruenberg:  In response to my friend  from the valley.   If we look at line 13.  It recognizes the Sourdoughs  the folks who came  from the Lower 48.  The second verse talks about the  original  inhabitants of Alaska. It seems to me the second verse just  restores  the balance.  
VOTE: Petersen yes, Seaton yes Wilson yes, Gatto  no, Johnson no, Gruenberg yes, Lynn yes.     Passes:  5 yea 2 nay.
Guide to finding things on the audio.
1.  Changes to the Bill. Begins at 37:30 of the audio
2.  What Does Native Mean?   Begins at 42:16 on the audio.  
3.  Copyright  Issues. Begins at 46:25 on the audio.
4.  Changing  History and Culture. Begins at 64:41 on the audio.
Other posts mentioning the 
second  verse of the flag song.