Legislature(2017 - 2018)

2017-04-10 House Journal

Full Journal pdf

2017-04-10                     House Journal                      Page 1017
HB 111                                                                                                                        
The following, which was moved to the bottom of the calendar (page                                                              
1012), was read the third time:                                                                                                 
                                                                                                                                
     CS FOR HOUSE BILL NO. 111(FIN)                                                                                             
     "An Act relating to the oil and gas production tax, tax payments,                                                          
     and credits; relating to interest applicable to delinquent oil and gas                                                     
     production tax; relating to carried-forward lease expenditures                                                             
     based on losses and limiting those lease expenditures to an amount                                                         
     equal to the gross value at the point of production of oil and gas                                                         
     produced from the lease or property where the lease expenditure                                                            
     was incurred; relating to information concerning tax credits, lease                                                        
     expenditures, and oil and gas taxes; relating to the disclosure of                                                         
     that information to the public; relating to an adjustment in the                                                           
     gross value at the point of production; relating to a legislative                                                          
     working group; and providing for an effective date."                                                                       
                                                                                                                                
Representative Wilson moved and asked unanimous consent that                                                                    
CSHB 111(FIN) be returned to second reading for the specific purpose                                                            
of considering Amendment No. 1.  There being no objection, it was so                                                            
ordered.                                                                                                                        

2017-04-10                     House Journal                      Page 1018
Amendment No. 1 was offered by Representative Wilson:                                                                           
                                                                                                                                
Page 1, line 8, following "production;" (title amendment):                                                                    
     Insert "relating to the fisheries business tax and the fishery                                                           
resource landing tax;"                                                                                                        
                                                                                                                                
Page 34, following line 5:                                                                                                      
     Insert new bill sections to read:                                                                                          
   "* Sec. 28. AS 43.75.015(a) is amended to read:                                                                            
         (a)  A person engaged in a fisheries business is liable for and                                                        
     shall pay the tax levied by this section on the value of each of the                                                       
     following fisheries resources processed during the year at the rate                                                        
     set out after each:                                                                                                        
              (1)  salmon canned at a shore-based fisheries business -                                                          
     5.5 [FOUR AND ONE-HALF] percent;                                                                                       
              (2)  salmon processed by a shore-based fisheries business,                                                        
     except salmon for which the tax is due under (1) of this                                                                   
     subsection, and all other fisheries resources processed by a shore-                                                        
     based fisheries business - four [THREE] percent;                                                                       
              (3)  fisheries resources processed by a floating fisheries                                                        
     business - six [FIVE] percent.                                                                                         
   * Sec. 29. AS 43.75.015(b) is amended to read:                                                                             
         (b)  Instead of the taxes levied by (a) of this section, a person                                                      
     who processes a developing commercial fish species is liable for                                                           
     and shall pay a tax equal to                                                                                               
              (1)  one percent of the value of the developing                                                                   
     commercial fish species processed by a shore-based fisheries                                                               
     business during the year; and                                                                                              
              (2)  four [THREE] percent of the value of the developing                                                      
     commercial fish species processed by a floating fisheries business                                                         
     during the year.                                                                                                           
   * Sec. 30. AS 43.75.015(d) is amended to read:                                                                             
         (d)  Instead of the taxes levied under (a) or (b) of this section,                                                     
     a person who processes a fishery resource under a direct                                                                   
     marketing fisheries business license is liable for and shall pay a                                                         
     tax equal to                                                                                                               
              (1)  one percent of the value of the developing                                                                   
     commercial fish species processed during the year; and                                                                     
              (2)  four [THREE] percent of the value of a commercial                                                        
     fish species not subject to (1) of this subsection.                                                                        

2017-04-10                     House Journal                      Page 1019
   * Sec. 31. AS 43.75.130(a) is amended to read:                                                                             
         (a)  The amount of tax revenue equal to one percent of the                                                         
     value of each fishery taxed under this chapter shall be                                                                
     deposited into the general fund. Except as provided in (d) of this                                                     
     section, and not including the revenue equal to one percent of                                                         
     the value of each fishery taxed under this chapter and                                                                 
     deposited in the general fund under this subsection, the                                                               
     commissioner shall pay                                                                                                     
              (1)  to each unified municipality and to each city located                                                        
     in the unorganized borough, 50 percent of the amount of tax                                                                
     revenue collected in the municipality from taxes levied under this                                                         
     chapter;                                                                                                                   
              (2)  to each city located within a borough, 25 percent of                                                         
     the amount of tax revenue collected in the city from taxes levied                                                          
     under this chapter; and                                                                                                    
              (3)  to each borough                                                                                              
                  (A)  50 percent of the amount of tax revenue                                                                  
         collected in the area of the borough outside cities from taxes                                                         
         levied under this chapter; and                                                                                         
                  (B)  25 percent of the amount of tax revenue                                                                  
         collected in cities located within the borough from taxes                                                              
         levied under this chapter.                                                                                             
   * Sec. 32. AS 43.77.010 is amended to read:                                                                                
         Sec. 43.77.010. Landing tax. A person who engages or                                                                 
     attempts to engage in a floating fisheries business in the state and                                                       
     who owns a fishery resource that is not subject to AS 43.75 but                                                            
     that is brought into the jurisdiction of, and first landed in, this state                                                  
     is liable for and shall pay a landing tax on the value of the fishery                                                      
     resource. The amount of the landing tax is                                                                                 
              (1)  for a developing commercial fish species, as defined                                                         
     under AS 43.75.290, one percent of the value of the fishery                                                                
     resource at the place of landing;                                                                                          
              (2)  for a fish species other than a developing commercial                                                        
     fish species, four [THREE] percent of the value of the fishery                                                         
     resource at the place of the landing.                                                                                      
   * Sec. 33. AS 43.77.060(a) is amended to read:                                                                             
         (a)  The amount of tax revenue equal to one percent of the                                                         
     value of each fishery taxed under this chapter shall be                                                                
     deposited into the general fund. Subject to appropriation by the                                                       
     legislature and except as provided in (b) of this section, and not                                                     

2017-04-10                     House Journal                      Page 1020
     including the revenue equal to one percent of the value of each                                                        
     fishery taxed under this chapter and deposited in the general                                                          
     fund under this subsection, the commissioner shall pay to each                                                         
              (1)  unified municipality and to each city located in the                                                         
     unorganized borough, 50 percent of the amount of tax revenue                                                               
     collected from taxes levied under this chapter on the fishery                                                              
     resource landed in the municipality and accounted for under                                                                
     AS 43.77.050(b);                                                                                                           
              (2)  city located within a borough, 25 percent of the                                                             
     amount of the tax revenue collected from taxes levied under this                                                           
     chapter on fishery resources landed in the city and accounted for                                                          
     under AS 43.77.050(b); and                                                                                                 
              (3)  borough                                                                                                      
                  (A)  50 percent of the amount of the tax revenue                                                              
         collected from taxes levied under this chapter on fishery                                                              
         resources landed in the area of the borough outside cities and                                                         
         accounted for under AS 43.77.050(b); and                                                                               
                  (B)  25 percent of the amount of the tax revenue                                                              
         collected from taxes levied under this chapter on fishery                                                              
         resources landed in cities located within the borough and                                                              
         accounted for under AS 43.77.050(b).                                                                                   
   * Sec. 34. AS 43.77.060(b) is amended to read:                                                                             
         (b)  The amount of tax revenue equal to one percent of the                                                         
     value of each fishery taxed under this chapter shall be                                                                
     deposited into the general fund. Notwithstanding the provisions                                                        
     of (a)(2) and (a)(3)(B) of this section, and subject to appropriation                                                      
     by the legislature, and not including the revenue equal to one                                                         
     percent of the value of each fishery taxed under this chapter                                                          
     and deposited in the general fund under this subsection, the                                                           
     commissioner shall pay to each                                                                                             
              (1)  city that is located in a borough incorporated after                                                         
     January 1, 1994, the following percentages of the tax revenue                                                              
     collected from taxes levied under this chapter on fishery resources                                                        
     landed in the city and accounted for under AS 43.77.050(b):                                                                
                  (A)  45 percent of the tax revenue collected during                                                           
         the calendar year in which the borough is incorporated;                                                               
                  (B)  40 percent of the tax revenue collected during                                                           
         the first calendar year after the calendar year in which the                                                           
         borough is incorporated;                                                                                               
                  (C)  35 percent of the tax revenue collected during                                                           

2017-04-10                     House Journal                      Page 1021
         the second calendar year after the calendar year in which the                                                          
         borough is incorporated; and                                                                                           
                  (D)  30 percent of the tax revenue collected during                                                           
         the third calendar year after the calendar year in which the                                                           
         borough is incorporated; and                                                                                           
              (2)  borough that is incorporated after January 1, 1994,                                                          
     the following percentages of the tax revenue collected from taxes                                                          
     levied under this chapter on fishery resources landed in the cities                                                        
     located within the borough and accounted for under                                                                         
     AS 43.77.050(b):                                                                                                           
                  (A)  five percent of the tax revenue collected during                                                         
         the calendar year in which the borough is incorporated;                                                               
                  (B)  10 percent of the tax revenue collected during                                                           
         the first calendar year after the calendar year in which the                                                           
         borough is incorporated;                                                                                               
                  (C)  15 percent of the tax revenue collected during                                                           
         the second calendar year after the calendar year in which the                                                          
         borough is incorporated; and                                                                                           
                  (D)  20 percent of the tax revenue collected during                                                           
         the third calendar year after the calendar year in which the                                                           
         borough is incorporated."                                                                                              
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 37, line 17:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                
Page 37, line 18:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                
Page 37, line 27:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                
Page 37, line 29:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                

2017-04-10                     House Journal                      Page 1022
Page 37, lines 29 - 30:                                                                                                         
     Delete "sec. 29"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                
Page 38, line 23:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                
                                                                                                                                
Page 38, line 26:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                
Page 38, line 29:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                
Page 39, line 10:                                                                                                               
     Delete "30, 36, and 37"                                                                                                    
     Insert "37, 43, and 44"                                                                                                    
                                                                                                                                
Page 39, line 14:                                                                                                               
     Delete "secs. 38 and 39"                                                                                                   
     Insert "secs. 45 and 46"                                                                                                   
                                                                                                                                
Representative Wilson moved and asked unanimous consent that                                                                    
Amendment No. 1 be adopted.                                                                                                     
                                                                                                                                
Representative Seaton objected.                                                                                                 
                                                                                                                                
Representatives Kopp, Millett, LeDoux, Kreiss-Tomkins, and Seaton                                                               
moved and asked unanimous consent to abstain from voting because                                                                
of a conflict of interest.  Objection was heard, and they were required                                                         
to vote.                                                                                                                        
                                                                                                                                
Representative Eastman placed a call of the House.                                                                              
                                                                                                                                
The call was satisfied.                                                                                                         
                                                                                                                                
                                                                                                                                

2017-04-10                     House Journal                      Page 1023
The question being:  "Shall Amendment No. 1 be adopted?"  The roll                                                              
was taken with the following result:                                                                                            
                                                                                                                                
CSHB 111(FIN)                                                                                                                   
Second Reading                                                                                                                  
Amendment No. 1                                                                                                                 
                                                                                                                                
YEAS:  10   NAYS:  30   EXCUSED:  0   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Birch, Johnston, Millett, Pruitt, Rauscher, Saddler, Talerico,                                                           
Thompson, Tilton, Wilson                                                                                                        
                                                                                                                                
Nays:  Chenault, Claman, Drummond, Eastman, Edgmon, Fansler,                                                                    
Foster, Gara, Grenn, Guttenberg, Johnson, Josephson, Kawasaki, Kito,                                                            
Knopp, Kopp, Kreiss-Tomkins, LeDoux, Neuman, Ortiz, Parish,                                                                     
Reinbold, Seaton, Spohnholz, Stutes, Sullivan-Leonard, Tarr, Tuck,                                                              
Westlake, Wool                                                                                                                  
                                                                                                                                
And so, Amendment No. 1 was not adopted.                                                                                        
                                                                                                                                
Amendment No. 2 was offered by Representative Rauscher:                                                                         
                                                                                                                                
Page 1, lines 1 - 9 (title amendment):                                                                                          
     Delete all material and insert:                                                                                            
     ""An Act relating to the interest applicable to delinquent oil                                                           
and gas production tax; relating to the net operating loss credit                                                             
against the oil and gas production tax; relating to lease                                                                     
expenditures; and providing for an effective date.""                                                                          
                                                                                                                                
Page 1, line 11, through page 2, line 16:                                                                                       
     Delete all material.                                                                                                       
                                                                                                                                
Page 2, line 17:                                                                                                                
     Delete "Sec. 3"                                                                                                          
     Insert "Section 1"                                                                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 3, line 12, through page 21, line 28:                                                                                      
     Delete all material.                                                                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               

2017-04-10                     House Journal                      Page 1024
Page 22, line 29:                                                                                                               
     Delete "[OR (g)]"                                                                                                          
     Insert "or (g)"                                                                                                            
                                                                                                                                
Page 23, line 1, through page 27, line 24:                                                                                      
     Delete all material.                                                                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 27, line 28:                                                                                                               
     Delete "(h)(1) [(h)]"                                                                                                  
     Insert "(h)"                                                                                                               
                                                                                                                                
Page 28, line 5:                                                                                                                
     Delete "(h)(1)(C) [(h)(3)]"                                                                                            
     Insert "(h)(3)"                                                                                                            
                                                                                                                                
Page 28, line 15, through page 32, line 23:                                                                                     
     Delete all material.                                                                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 33, lines 16 - 25:                                                                                                         
     Delete all material and insert:                                                                                            
              "(3)  lease expenditures, as adjusted under (m) of this                                                       
     section, that                                                                                                          
                  (A)  met the requirements of AS 43.55.160(e) in                                                           
           the year that the lease expenditures were incurred;                                                             
                  (B) were deductible in the immediately preceding                                                          
         10 calendar years, not counting the year in which the                                                              
         expenditure was incurred;                                                                                          
                  (C)  have not been deducted in the determination                                                          
         of the production tax value of oil and gas under                                                                   
         AS 43.55.160(a) in a previous calendar year;                                                                       
                  (D)  were not the basis of a credit under this title;                                                     
         and                                                                                                                
                  (E) were incurred to explore for, develop, or                                                             
         produce an oil or gas deposit located north of 68 degrees                                                          
         North latitude."                                                                                                   
                                                                                                                                

2017-04-10                     House Journal                      Page 1025
Page 33, line 26:                                                                                                               
     Delete "new subsections"                                                                                                   
     Insert "a new subsection"                                                                                                  
                                                                                                                                
Page 33, line 27, through page 38, line 30:                                                                                     
     Delete all material and insert:                                                                                            
"* Sec. 5. AS 43.55.165 is amended by adding a new subsection to                                                              
read:                                                                                                                           
         (m)  A loss carried forward under (a)(3) of this section shall                                                         
     increase in value at a rate of 10 percent, compounded annually. An                                                         
     increase in value under this subsection begins to accrue on                                                                
     January 1 of the calendar year immediately following the calendar                                                          
     year in which the loss was accrued and no longer accrues on                                                                
     December 31 of the calendar year immediately preceding the                                                                 
     calendar year in which a carried-forward annual loss is applied.                                                           
     The increase in value accrued under this subsection has no value                                                           
     except as applied in this section. An increase in value may not                                                            
     accrue                                                                                                                     
              (1)  for a partial calendar year;                                                                                 
              (2)  for more than 10 calendar years, consecutive or                                                              
     nonconsecutive; or                                                                                                         
              (3)  on a loss carried forward by a producer whose                                                                
     average amount of oil and gas produced a day and taxable under                                                             
     AS 43.55.011(e) is more than 50,000 BTU equivalent barrels                                                                 
     during the calendar year that the loss was accrued.                                                                        
   * Sec. 6. The uncodified law of the State of Alaska is amended by                                                          
adding a new section to read:                                                                                                   
     APPLICABILITY. (a) AS 43.55.023(b), as amended by sec. 2 of                                                                
this Act, applies to lease expenditures incurred on or after the effective                                                      
date of sec. 2 of this Act.                                                                                                     
     (b)  AS 43.55.165(a)(3) and 43.55.165(m), added by secs. 4 and 5                                                           
of this Act, apply to a lease expenditure incurred on or after the                                                              
effective date of secs. 4 and 5 of this Act."                                                                                   
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 39, line 9:                                                                                                                
     Delete "Section 3"                                                                                                         
     Insert "Section 1"                                                                                                         
                                                                                                                                

2017-04-10                     House Journal                      Page 1026
Page 39, line 10:                                                                                                               
     Delete "Sections 3, 30, 36, and 37"                                                                                        
     Insert "Sections 1, 7, and 8"                                                                                              
                                                                                                                                
Page 39, line 12:                                                                                                               
     Delete "Section 26"                                                                                                        
     Insert "Section 4"                                                                                                         
                                                                                                                                
Page 39, line 14:                                                                                                               
     Delete "secs. 38 and 39"                                                                                                   
     Insert "secs. 9 and 10"                                                                                                    
                                                                                                                                
Representative Rauscher moved and asked unanimous consent that                                                                  
Amendment No. 2 be adopted.                                                                                                     
                                                                                                                                
Representative Tarr objected.                                                                                                   
                                                                                                                                
The question being:  "Shall Amendment No. 2 be adopted?"  The roll                                                              
was taken with the following result:                                                                                            
                                                                                                                                
CSHB 111(FIN)                                                                                                                   
Second Reading                                                                                                                  
Amendment No. 2                                                                                                                 
                                                                                                                                
YEAS:  18   NAYS:  22   EXCUSED:  0   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Birch, Chenault, Eastman, Johnson, Johnston, Knopp, Kopp,                                                                
Millett, Neuman, Pruitt, Rauscher, Reinbold, Saddler,                                                                           
Sullivan-Leonard, Talerico, Thompson, Tilton, Wilson                                                                            
                                                                                                                                
Nays:  Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn,                                                                  
Guttenberg, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux,                                                                  
Ortiz, Parish, Seaton, Spohnholz, Stutes, Tarr, Tuck, Westlake, Wool                                                            
                                                                                                                                
And so, Amendment No. 2 was not adopted.                                                                                        
                                                                                                                                
CSHB 111(FIN) was automatically in third reading.                                                                               
                                                                                                                                
Representative Tarr placed a call of the House.                                                                                 
                                                                                                                                
Representative Tarr rose to a point of order.                                                                                   
                                                                                                                                

2017-04-10                     House Journal                      Page 1027
The Speaker cautioned members to confine remarks to the bill.                                                                   
                                                                                                                                
Representative Reinbold moved and asked unanimous consent to                                                                    
abstain from voting because of a conflict of interest.  Objection was                                                           
heard, and she was required to vote.                                                                                            
                                                                                                                                
Representative LeDoux rose to a point of order.                                                                                 
                                                                                                                                
The Speaker cautioned members to confine remarks to the bill.                                                                   
                                                                                                                                
Representative Pruitt moved and asked unanimous consent to abstain                                                              
from voting because of a conflict of interest.  Objection was heard, and                                                        
he was required to vote.                                                                                                        
                                                                                                                                
The call was satisfied.                                                                                                         
                                                                                                                                
The question being:  "Shall CSHB 111(FIN) pass the House?"  The                                                                 
roll was taken with the following result:                                                                                       
                                                                                                                                
CSHB 111(FIN)                                                                                                                   
Third Reading                                                                                                                   
Final Passage                                                                                                                   
                                                                                                                                
YEAS:  21   NAYS:  19   EXCUSED:  0   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Claman, Drummond, Edgmon, Fansler, Foster, Gara,                                                                         
Guttenberg, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux,                                                                  
Ortiz, Parish, Seaton, Spohnholz, Stutes, Tarr, Tuck, Westlake, Wool                                                            
                                                                                                                                
Nays:  Birch, Chenault, Eastman, Grenn, Johnson, Johnston, Knopp,                                                               
Kopp, Millett, Neuman, Pruitt, Rauscher, Reinbold, Saddler,                                                                     
Sullivan-Leonard, Talerico, Thompson, Tilton, Wilson                                                                            
                                                                                                                                
And so, CSHB 111(FIN) passed the House.                                                                                         
                                                                                                                                
Representative Tuck moved the effective date clause.                                                                            
                                                                                                                                
The question being:  "Shall the effective date clause be adopted?"  The                                                         
roll was taken with the following result:                                                                                       
                                                                                                                                
CSHB 111(FIN)                                                                                                                   
Third Reading                                                                                                                   
Effective Date                                                                                                                  
                                                                                                                                
YEAS:  22   NAYS:  16   EXCUSED:  0   ABSENT:  2                                                                              

2017-04-10                     House Journal                      Page 1028
Yeas:  Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn,                                                                  
Guttenberg, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux,                                                                  
Ortiz, Parish, Seaton, Spohnholz, Stutes, Tarr, Tuck, Westlake, Wool                                                            
                                                                                                                                
Nays:  Chenault, Eastman, Johnson, Johnston, Knopp, Kopp, Millett,                                                              
Neuman, Pruitt, Reinbold, Saddler, Sullivan-Leonard, Talerico,                                                                  
Thompson, Tilton, Wilson                                                                                                        
                                                                                                                                
Absent:  Birch, Rauscher                                                                                                        
                                                                                                                                
And so, lacking the required 27 votes, the effective date clause was not                                                        
adopted, and the new title follows:                                                                                             
                                                                                                                                
     CS FOR HOUSE BILL NO. 111(FIN)(efd fld)                                                                                    
     "An Act relating to the oil and gas production tax, tax payments,                                                          
     and credits; relating to interest applicable to delinquent oil and gas                                                     
     production tax; relating to carried-forward lease expenditures                                                             
     based on losses and limiting those lease expenditures to an amount                                                         
     equal to the gross value at the point of production of oil and gas                                                         
     produced from the lease or property where the lease expenditure                                                            
     was incurred; relating to information concerning tax credits, lease                                                        
     expenditures, and oil and gas taxes; relating to the disclosure of                                                         
     that information to the public; relating to an adjustment in the                                                           
     gross value at the point of production; and relating to a legislative                                                      
     working group."                                                                                                            
                                                                                                                                
Representative Millett gave notice of reconsideration of the vote on                                                            
CSHB 111(FIN)(efd fld).