Legislature(2017 - 2018)
2017-04-10 House Journal
Full Journal pdf2017-04-10 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).