Legislature(2017 - 2018)BARNES 124

07/15/2017 01:00 PM CONFERENCE COMMITTEE ON HB111

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Audio Topic
09:22:45 PM Start
09:22:58 PM HB111
09:30:02 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 9:15 p.m. Today --
+= HB 111 OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS TELECONFERENCED
Moved CCS HB 111 Out of Committee
**Streamed live on AKL.tv**
        HB 111-OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS                                                                    
                                                                                                                                
9:22:58 PM                                                                                                                    
                                                                                                                                
CHAIR TARR  announced that  the only order  of business  would be                                                               
HOUSE  BILL  NO. 111,  ""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;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
[Before  the  committee  were  the CSHB  111(FIN)  and  SCS  CSHB                                                               
111(FIN).]                                                                                                                      
                                                                                                                                
9:23:00 PM                                                                                                                    
                                                                                                                                
CHAIR TARR advised  that the Alaska House  of Representatives and                                                               
the Senate had  approved SCR 202, allowing the  committee to take                                                               
official action on  HB 111.  She briefly explained  the points of                                                               
agreement and major  features of the bill to  include as follows:                                                               
the  end  of cash  credits  statewide,  effective July  1,  2017;                                                               
establish  a  carry  forward annual  loss  program  allowing  100                                                               
percent of  the carry forward  lease expenditures to  be deducted                                                               
in the calculation  of future production taxes  once the property                                                               
comes into  production; ring fencing  that ensures  carry forward                                                               
lease expenditures  may only  be deducted  in the  calculation of                                                               
future taxes after the project  that incurred those expenses also                                                               
comes into  regular production;  a down  lift starting  after the                                                               
tenth  year a  lease expenditure  had been  carried forward  on a                                                               
non-producing  property,  or  seventh  year  for  a  property  in                                                               
production, will be  reduced in value by 10 percent  based on the                                                               
value  of  the  preceding  year; establish  a  working  group  to                                                               
address  oil  and gas  tax  issues  with new  consultants;  allow                                                               
application of  unpaid credits toward corporate  income taxes and                                                               
production tax audits  with certain limitations, such  as the CVR                                                               
language;  interest  rates  at 5.25  percent  above  the  federal                                                               
reserve  rate;   and  technical  amendments,  suggested   by  the                                                               
Department of  Revenue, related to retroactive  regulation making                                                               
to accommodate  the July 1,  2017 effective  date for the  end of                                                               
the  cash  credits,  as  well  as the  CVR  language  to  clarify                                                               
limitations.                                                                                                                    
                                                                                                                                
9:25:08 PM                                                                                                                    
                                                                                                                                
CHAIR TARR explained that the  proposed conference committee bill                                                               
makes  changes   to  the   versions  passed   in  the   House  of                                                               
Representatives  and the  Senate and  therefore requires  limited                                                               
powers  of   free  conference,  detailed  in   a  memorandum  the                                                               
committee will sign.  She explained  that Sec. 38 is entirely new                                                               
and  provides transition  language to  allow for  the retroactive                                                               
regulation making to accommodate the  July 1, 2017 effective date                                                               
for the elimination  of cash credits and  therefore requires free                                                               
conference powers.   Chair Tarr  entertained a motion  to request                                                               
the necessary limited and free conference powers.                                                                               
                                                                                                                                
9:25:40 PM                                                                                                                    
                                                                                                                                
CHAIR  GIESSEL made  a  motion that  the  committee pass  limited                                                               
powers  of free  conference for  HB 111,  and that  Uniform Rules                                                               
42(a) and  42(b) be  suspended relating  to tax  credits eligible                                                               
for  purchase by  the state  during  calendar year  2017.   There                                                               
being no objection, the motion passed.                                                                                          
                                                                                                                                
9:26:19 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 9:26 p.m. to 9:28 p.m.                                                                       
                                                                                                                                
9:28:01 PM                                                                                                                    
                                                                                                                                
CHAIR  GIESSEL  made a  motion  that  pursuant to  receiving  the                                                               
powers  and suspension  of the  Uniform Rules  as requested,  the                                                               
Conference  Committee on  HB  111 recommends  that  the House  of                                                               
Representatives  and  the Senate  adopt  CCSHB  111, Version  30-                                                               
LS0450\OO,  Shutts/Nauman, 7/15/17,  and  its forthcoming  fiscal                                                               
notes, with individual recommendations.                                                                                         
                                                                                                                                
CHAIR TARR  advised that  the motion before  the committee  is to                                                               
send  the  report  to  its  respective  bodies  recommending  the                                                               
approval of Conference CSHB 111, Version 30-LS0450\OO.                                                                          
                                                                                                                                
9:29:10 PM                                                                                                                    
                                                                                                                                
A roll  call vote  was taken.   Representatives  Tarr, Josephson,                                                               
and Talerico  and Senators Giessel,  Stedman, and Olson  voted in                                                               
favor of passing Conference CSHB  111, Version 30-LS0450\OO, with                                                               
its  forthcoming  fiscal  notes, to  the  committee's  respective                                                               
bodies.   There being  no objection,  Conference CSHB  111 passed                                                               
out of the Conference Committee on CCS HB 111.                                                                                  

Document Name Date/Time Subjects
HB111 CCS Comparison 2017.07.15.pdf JHB111 7/15/2017 1:00:00 PM
HB 111
CCCSHB 111-Version O.pdf JHB111 7/15/2017 1:00:00 PM
HB 111