Legislature(2013 - 2014)
2014-04-20 Senate Journal
Full Journal pdf2014-04-20 Senate Journal Page 2666 HB 287 CS FOR HOUSE BILL NO. 287(RLS) am "An Act relating to the determination of the royalty received by the state on oil production refined or processed in the state; providing tax credits for qualified infrastructure expenditures for in-state refineries and hydrocarbon processing facilities; approving and ratifying the sale of royalty oil by the State of Alaska to Tesoro Corporation and Tesoro Refining and Marketing Company LLC; and providing for an effective date" was read the second time. Senator Kelly, Cochair, moved and asked unanimous consent for the adoption of the Finance Senate Committee Substitute offered on page 2651. Without objection, SENATE CS FOR CS FOR HOUSE BILL NO. 287(FIN) "An Act relating to the determination of the royalty received by the state on oil production refined or processed in the state; providing tax credits for qualified infrastructure expenditures for in-state refineries; approving and ratifying the sale of royalty oil by the 2014-04-20 Senate Journal Page 2667 State of Alaska to Tesoro Corporation and Tesoro Refining and Marketing Company LLC; and providing for an effective date" was adopted. Senator Wielechowski offered Amendment No. 1 : Page 1, lines 1 - 3: Delete "relating to the determination of the royalty received by the state on oil production refined or processed in the state; providing tax credits for qualified infrastructure expenditures for in-state refineries" Insert "creating a loan program for certain in-state oil refineries" Page 1, line 7, through page 5, line 26: Delete all material and insert: "* Section 1. AS 44.88 is amended by adding a new section to read: Article 9A. In-State Refiner and Hydrocarbon Processor Loan Program. Sec. 44.88.800. In-state refiner and hydrocarbon processor loan program. (a) The authority may make loans of up to $20,000,000 to a person that owns an in-state oil refinery or a hydrocarbon processing facility south of 68 degrees North latitude if the primary function is the manufacturing and sale of refined petroleum products or processed hydrocarbon products to third parties in arm's length transactions. A loan under this section may be used for working capital, equipment, construction, or other commercial purposes. A loan under this section may be made only if the authority finds that (1) the loan is required to (A) maintain profitability of the in-state refiner or hydrocarbon processing facility and the refinery or facility would otherwise be in financial distress; or (B) restart operations of an in-state refiner or hydrocarbon processing facility; and (2) the primary function of the in-state refiner or hydrocarbon processing facility is to engage in the manufacture of refined petroleum products or processed hydrocarbon products in the state, and the in-state refiner or hydrocarbon processing facility is not affiliated with a subsequent purchaser of more than 10 percent of the 2014-04-20 Senate Journal Page 2668 in-state refiner's or hydrocarbon processing facility's product; the parties to a contract or purchase are affiliated if, in the judgment of the authority, one of the parties to the contract or purchase exercises substantial influence over the policies and actions of the other as evidenced by a relationship based on common ownership or family interest or by action taken in concert whether or not that influence is based on stockholdings, stockholders, officers, or directors. (b) A loan made under this section (1) must comply with AS 44.88.159; (2) may exceed a term of 10 years; and (3) may not bear an interest rate less than the cost of funds to the authority. (c) The authority shall adopt regulations necessary for the following purposes in connection with its programs for the financing of projects under this section: (1) determination of borrower eligibility; (2) loan guidelines and terms, including (A) required loan-to-value ratios; and (B) a method for determining loan interest rates; and (3) the qualifications of loan originators and servicers and the method of allocating amounts available for the purchase of loans. (d) The application for a loan under this section must be received by the authority before December 31, 2015. (e) The legislature may appropriate the money required to make a loan issued under this section prudent for the authority. (f) The authority may allow a borrower to begin repayment of a loan issued under this section up to five years after the loan is issued if the legislature appropriates an amount of money determined by the authority to be sufficient to protect the assets and bond rating of the authority. (g) In this section, "cost of funds" means the true interest cost expressed as a rate on tax-exempt bonds of the authority plus an additional percentage as determined by the authority to represent the allocable expenses of operation, costs of issuance, and loan servicing costs." Renumber the following bill sections accordingly. 2014-04-20 Senate Journal Page 2669 Page 6, line 7: Delete all material. Renumber the following bill section accordingly. Page 6, line 8: Delete "Except as provided in sec. 7 of this Act, this" Insert "This" Senator Wielechowski moved for the adoption of Amendment No. 1. Senator Coghill objected. The question being: "Shall Amendment No. 1 be adopted?" The roll was taken with the following result: SCS CSHB 287(FIN) Second Reading Amendment No. 1 YEAS: 5 NAYS: 14 EXCUSED: 0 ABSENT: 1 Yeas: Ellis, Fairclough, French, Gardner, Wielechowski Nays: Bishop, Coghill, Dunleavy, Dyson, Egan, Giessel, Hoffman, Huggins, Kelly, McGuire, Micciche, Olson, Stedman, Stevens Absent: Meyer and so, Amendment No. 1 failed. Senators French, Wielechowski offered Amendment No. 2 : Page 3, line 18, following "incurred.": Insert "A taxpayer shall apply for the credit with the department. Before a taxpayer may qualify for a credit under this section, the department shall, after the review described in (j) of this section, make a finding that the expenditure that is the basis of the credit would not be economically feasible but for the receipt of the credit by the taxpayer." Page 4, following line 28: Insert new subsections to read: "(j) In the review of a credit application under this section, the department shall 2014-04-20 Senate Journal Page 2670 (1) require that a taxpayer submit financial data sufficient for the department to determine that the expenditure that is the basis of the credit would not be economically feasible but for the receipt of the credit by the taxpayer; (2) make available to the public a preliminary written finding regarding the eligibility of the taxpayer for the credit; (3) after the publication of the preliminary written finding under this subsection, provide opportunity for public comment on the preliminary written finding for a period of not less than 14 days; (4) within 30 days after the close of the public comment period under (3) of this subsection, make a final determination and findings and make copies of the final determination and findings available to each person who submitted comments under (3) of this subsection and who has filed a request for the copies. (k) At the request of the applicant, the department shall keep information submitted on an application for a credit under this section confidential. However, the department may, under confidentiality agreements, share confidential information obtained under this section with members of the legislature, the legislative auditor, and the director of the legislative finance division." Reletter the following subsection accordingly. Senator French moved for the adoption of Amendment No. 2. Objections were heard. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: SCS CSHB 287(FIN) Second Reading Amendment No. 2 YEAS: 6 NAYS: 13 EXCUSED: 0 ABSENT: 1 Yeas: Ellis, Fairclough, French, Gardner, Olson, Wielechowski Nays: Bishop, Coghill, Dunleavy, Dyson, Egan, Giessel, Hoffman, Huggins, Kelly, McGuire, Micciche, Stedman, Stevens Absent: Meyer 2014-04-20 Senate Journal Page 2671 and so, Amendment No. 2 failed. Senator Gardner offered Amendment No. 3 : Page 3, line 18, following "incurred.": Insert "To qualify for a credit under this section, a taxpayer that is a corporation, joint venture, or partnership shall be headquartered in the state and be at least 51 percent owned by residents of the state." Senator Gardner moved for the adoption of Amendment No. 3. Senator Fairclough objected. The question being: "Shall Amendment No. 3 be adopted?" The roll was taken with the following result: SCS CSHB 287(FIN) Second Reading Amendment No. 3 YEAS: 5 NAYS: 14 EXCUSED: 0 ABSENT: 1 Yeas: Ellis, French, Gardner, Olson, Wielechowski Nays: Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel, Hoffman, Huggins, Kelly, McGuire, Micciche, Stedman, Stevens Absent: Meyer and so, Amendment No. 3 failed. Senator Gardner offered Amendment No. 4 : Page 3, line 15: Delete "2020" Insert "2018" Senator Gardner moved for the adoption of Amendment No. 4. Senator Fairclough objected. The question being: "Shall Amendment No. 4 be adopted?" The roll was taken with the following result: 2014-04-20 Senate Journal Page 2672 SCS CSHB 287(FIN) Second Reading Amendment No. 4 YEAS: 6 NAYS: 14 EXCUSED: 0 ABSENT: 0 Yeas: Dunleavy, Ellis, Fairclough, French, Gardner, Wielechowski Nays: Bishop, Coghill, Dyson, Egan, Giessel, Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens and so, Amendment No. 4 failed. Senator Wielechowski offered Amendment No. 5 : Page 1, line 3, following "refineries;": Insert "making sales of and offers to sell certain energy resources at prices that are unconscionable an unlawful act or practice under the Alaska Unfair Trade Practices and Consumer Protection Act;" Page 5, line 26: Insert new bill sections to read: "* Sec. 6. AS 45.50.471(b) is amended by adding a new paragraph to read: (58) violating AS 45.50.483 (sales of certain energy resources by refiners, distributors, and retailers). * Sec. 7. AS 45.50 is amended by adding a new section to read: Sec. 45.50.483. Sales of certain energy resources by Alaska refiners, distributors, and retailers. (a) A refiner, distributor, or retailer may not sell or offer to sell an energy resource described in (b) of this section at a price that is unconscionable. (b) The provisions of this section apply only to sales of (1) motor fuel used in an engine for the propulsion of a motor vehicle, as that term is defined in AS 28.90.990, or an aircraft; (2) fuel for space heating; and (3) diesel fuel. (c) If the attorney general believes that a refiner, distributor, or retailer has engaged in or is engaging in a violation of (a) of this section, the attorney general shall initiate an investigation under AS 45.50.495. 2014-04-20 Senate Journal Page 2673 (d) In addition to the civil penalties authorized by AS 45.50.551, the attorney general may recover, on behalf of the state, a civil penalty of not less than 10 times the economic benefit obtained by the refiner, distributor, or retailer through the conduct of the refiner, distributor, or retailer that violated or violates this section. (e) Only the attorney general may bring an action to enforce this section. In an action to enforce this section in which the attorney general is the prevailing party, the attorney general may recover attorney fees and costs as authorized by AS 45.50.537(d). The provisions of AS 45.50.531 and 45.50.535 do not apply to authorize a person (1) who suffers an ascertainable loss of money or property as a result of the act of a refiner, distributor, or retailer declared unlawful by this section to bring a civil action to recover for each unlawful act; or (2) who was the victim of an unlawful act under this section, whether or not the person suffered actual damages, to bring an action to obtain an injunction prohibiting the refiner, distributor, or retailer from continuing to engage in the act that is made unlawful by this section. (f) In an action to enforce this section, a refiner, distributor, or retailer has the right to submit evidence that the price charged by the refiner, distributor, or retailer that is alleged to be unconscionable was attributable to additional reasonable costs incurred in connection with the sale of the energy resource by the refiner, distributor, or retailer. (g) In this section, (1) "distributor" means a person or corporation other than a refiner who is engaged in the sale, assignment, or distribution of an energy resource described in (b) of this section to one or more retailers for sale through retail outlets; (2) "refiner" means a company, corporation, or individual who owns or controls, or controls through a substantially owned subsidiary, partnership, or joint venture, a refinery used for the production of an energy resource described in (b) of this section having total annual sales that exceed 1,000,000 gallons of all of those energy resources; (3) "retailer" means a person in the state who is engaged in the business of selling at retail an energy resource described in 2014-04-20 Senate Journal Page 2674 (b) of this section." Renumber the following bill sections accordingly. Page 6, line 8: Delete "sec. 7" Insert "sec. 9" Senator Wielechowski moved for the adoption of Amendment No. 5. Senator Fairclough objected. The question being: "Shall Amendment No. 5 be adopted?" The roll was taken with the following result: SCS CSHB 287(FIN) Second Reading Amendment No. 5 YEAS: 5 NAYS: 15 EXCUSED: 0 ABSENT: 0 Yeas: Ellis, French, Gardner, Hoffman, Wielechowski Nays: Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel, Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens and so, Amendment No. 5 failed. Senator Gardner offered Amendment No. 6 : Page 1, line 3, following "refineries;": Insert "providing for a school funding adjustment;" Page 1, following line 6: Insert a new bill section to read: "* Section 1. AS 14.17 is amended by adding a new section to read: Sec. 14.17.475. Oil refinery royalty tax credit school funding adjustment. In addition to other money available under this title to a school district, the department shall provide, by the end of the fiscal year, an amount that is equivalent to the amount accrued as credits by taxpayers under AS 43.20.053 as state aid to school districts. The money shall be distributed according to the average daily membership for each district, adjusted under AS 14.17.410(b)(1)(A) - (D), for the fiscal year following the fiscal year in which the tax credit was given." 2014-04-20 Senate Journal Page 2675 Page 1, line 7: Delete "Section 1" Insert "Sec. 2" Renumber the following bill sections accordingly. Page 6, line 7: Delete "Sections 1 - 5" Insert "Sections 2 - 6" Page 6, line 8: Delete "sec. 7" Insert "sec. 8" Senator Gardner moved for the adoption of Amendment No. 6. Senator Fairclough objected. The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: SCS CSHB 287(FIN) Second Reading Amendment No. 6 YEAS: 4 NAYS: 16 EXCUSED: 0 ABSENT: 0 Yeas: Ellis, French, Gardner, Wielechowski Nays: Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel, Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens and so, Amendment No. 6 failed. Senator Wielechowski offered Amendment No. 7 : Page 1, line 3, following "refineries;": Insert "relating to energy assistance rebates and increasing the amount of the permanent fund dividend by the amount of the rebate based on the use of certain tax credits;" 2014-04-20 Senate Journal Page 2676 Page 3, following line 8: Insert a new bill section to read: "* Sec. 3. AS 43.23.025 is amended by adding new subsections to read: (c) To provide residents of the state with energy assistance, the amount of a permanent fund dividend shall be increased. After calculating the amount of an annual dividend under AS 43.23.025, if a credit has been claimed under AS 43.20.053 during the current year, the commissioner of revenue shall add $250 to determine the total amount of that dividend. (d) Subject to appropriation, the amount necessary to increase a permanent fund dividend under (a) of this section shall be transferred from the general fund to the dividend fund (AS 43.23.045)." Renumber the following bill sections accordingly. Page 6, line 7: Delete "5" Insert "6" Page 6, line 8: Delete "sec. 7" Insert "sec. 8" Senator Wielechowski moved for the adoption of Amendment No. 7. Senator Fairclough objected. The question being: "Shall Amendment No. 7 be adopted?" The roll was taken with the following result: SCS CSHB 287(FIN) Second Reading Amendment No. 7 YEAS: 4 NAYS: 16 EXCUSED: 0 ABSENT: 0 Yeas: Ellis, French, Gardner, Wielechowski Nays: Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel, Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens and so, Amendment No. 7 failed. 2014-04-20 Senate Journal Page 2677 Senator Coghill moved and asked unanimous consent that the bill be considered engrossed, advanced to third reading and placed on final passage. Without objection, it was so ordered. SENATE CS FOR CS FOR HOUSE BILL NO. 287(FIN) was read the third time. The question being: "Shall SENATE CS FOR CS FOR HOUSE BILL NO. 287(FIN) "An Act relating to the determination of the royalty received by the state on oil production refined or processed in the state; providing tax credits for qualified infrastructure expenditures for in-state refineries; approving and ratifying the sale of royalty oil by the State of Alaska to Tesoro Corporation and Tesoro Refining and Marketing Company LLC; and providing for an effective date" pass the Senate?" The roll was taken with the following result: SCS CSHB 287(FIN) Third Reading - Final Passage Effective Dates YEAS: 14 NAYS: 6 EXCUSED: 0 ABSENT: 0 Yeas: Bishop, Coghill, Dyson, Egan, Giessel, Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens Nays: Dunleavy, Ellis, Fairclough, French, Gardner, Wielechowski and so, SENATE CS FOR CS FOR HOUSE BILL NO. 287(FIN) passed the Senate. Senator Coghill moved and asked unanimous consent that the vote on the passage of the bill be considered the vote on the effective date clauses. Without objection, it was so ordered and the bill was referred to the Secretary for engrossment.