Legislature(2015 - 2016)BILL RAY CENTER 230

06/06/2016 02:00 PM CONFERENCE COMMITTEE ON HB247

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Audio Topic
02:04:09 PM Start
02:04:39 PM HB247
02:13:39 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
= HB 247 TAX;CREDITS;INTEREST;REFUNDS;O & G
Moved CCS HB 247 Out of Committee
-- Testimony <Invitation Only> --
           HB 247-TAX;CREDITS;INTEREST;REFUNDS;O & G                                                                        
                                                                                                                                
2:04:39 PM                                                                                                                    
                                                                                                                                
CHAIR TALERICO announced  that the only order  of business before                                                               
the Conference Committee on HB 247  would be 2d CS FOR HOUSE BILL                                                               
NO. 247(RLS)  am, "An  Act amending  the powers  of the  board of                                                               
trustees of  the Alaska Retirement Management  Board to authorize                                                               
purchase and sale of transferable  tax credit certificates issued                                                               
in conjunction with  the production tax on oil  and gas; relating                                                               
to interest  applicable to  delinquent tax;  relating to  the oil                                                               
and gas  production tax, tax  payments, and credits;  relating to                                                               
exploration incentive  credits; relating  to refunds for  the gas                                                               
storage facility  tax credit, the  liquefied natural  gas storage                                                               
facility  tax credit,  and the  qualified  in-state oil  refinery                                                               
infrastructure   expenditures  tax   credit;   relating  to   the                                                               
confidential  information  status  and public  record  status  of                                                               
information  in  the possession  of  the  Department of  Revenue;                                                               
relating to  oil and  gas lease  expenditures and  production tax                                                               
credits for municipal entities; requiring  a bond or cash deposit                                                               
with a business  license application for an oil  or gas business;                                                               
establishing  a legislative  working  group to  study the  fiscal                                                               
regime  and tax  structure and  rates  for oil  and gas  produced                                                               
south  of  68  degrees  North  latitude;  and  providing  for  an                                                               
effective  date." and  SENATE CS  FOR 2d  CS FOR  HOUSE BILL  NO.                                                               
247(FIN)  am S,  "An Act  relating to  the exploration  incentive                                                               
credits; relating to the powers and  duties of the Alaska Oil and                                                               
Gas Conservation  Commission; relating to interest  applicable to                                                               
delinquent tax; relating  to the oil and gas  production tax, tax                                                               
payments,  and  credits;  relating to  tax  credit  certificates;                                                               
relating to refunds for the  gas storage facility tax credit, the                                                               
liquefied  natural  gas  storage  facility tax  credit,  and  the                                                               
qualified in-state  oil refinery infrastructure  expenditures tax                                                               
credit;  relating   to  oil  and   gas  lease   expenditures  and                                                               
production tax  credits for municipal entities;  requiring a bond                                                               
or cash  deposit with a  business license application for  an oil                                                               
or gas business; and providing for an effective date."                                                                          
                                                                                                                                
CHAIR TALERICO stated that the  Conference Committee on HB 247 is                                                               
exempt from  committee meeting  notice requirements  as specified                                                               
in Uniform  Rule 23(g).   He informed  the committee that  at the                                                               
previous   meeting  the   conference   committee  approved   four                                                               
amendments; however, Amendment 3,  related to local hire, removed                                                               
language  related to  repurchase restrictions  on companies  from                                                               
the oil and gas tax credit fund,  which was not the intent of the                                                               
committee.  In  order to adopt the amendment  "as presented," the                                                               
committee  will   need  to  rescind   its  action   adopting  the                                                               
conference  committee  report,  request limited  powers  of  free                                                               
conference,  and   report  out   a  new   [conference]  committee                                                               
substitute.                                                                                                                     
                                                                                                                                
2:05:14 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL  moved  to rescind  the  committee's  action  in                                                               
reporting CCS HB  247 from committee.  There  being no objection,                                                               
it was so ordered.                                                                                                              
                                                                                                                                
2:05:38 PM                                                                                                                    
                                                                                                                                
SENATOR  GIESSEL   moved  to  request  limited   powers  of  free                                                               
conference [from  the presiding  officers for  the aforementioned                                                               
specific points  of HB 247,  regarding local hire  and repurchase                                                               
restrictions], found  in Section 35  of the House version  and in                                                               
Section 25 of the Senate version.                                                                                               
                                                                                                                                
2:05:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR  informed  the  committee  that  [after  the                                                               
conference  committee meeting  held  at 8:11  a.m., 6/6/16],  she                                                               
learned a different provision found  in the Senate version of the                                                               
bill, related to  delinquent taxes and interest  rates, "could be                                                               
problematic according  to the Department  of Revenue."   She said                                                               
the  committee  may  use  this  opportunity  to  reconsider  that                                                               
provision as well,  if there is interest  from committee members.                                                               
She said  she was unsure of  the nature of the  problem; however,                                                               
the problem was brought to her attention.                                                                                       
                                                                                                                                
[Although not  stated on  the record,  the committee  treated the                                                               
comments by  Representative Tarr  as an  objection to  the motion                                                               
for discussion purposes.]                                                                                                       
                                                                                                                                
CHAIR  TALERICO   expressed  his   belief  that   the  conference                                                               
committee's  limited powers  are  related to  the one  particular                                                               
subject matter [of Amendment 3].                                                                                                
                                                                                                                                
2:07:10 PM                                                                                                                    
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
2:07:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR  removed  her  objection.   There  being  no                                                               
further objection, the  motion to request limited  powers of free                                                               
conference was approved.                                                                                                        
                                                                                                                                
2:08:13 PM                                                                                                                    
                                                                                                                                
The committee took an at ease from 2:08 p.m. to 2:09 p.m.                                                                       
                                                                                                                                
2:09:56 PM                                                                                                                    
                                                                                                                                
CHAIR TALERICO described a new conference committee substitute.                                                                 
                                                                                                                                
2:10:24 PM                                                                                                                    
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
2:10:54 PM                                                                                                                    
                                                                                                                                
CHAIR TALERICO directed attention to  CCS for HB 247, Version 29-                                                               
GH2609\EE, Nauman,  6/6/16, which includes all  of the amendments                                                               
that passed  in the  conference committee  meeting [held  at 8:11                                                               
a.m., on 6/6/16],  except for Amendment 3.   He explained Version                                                               
EE would adopt the House local  hire provisions, as shown on page                                                               
22, lines 11-16, which read:                                                                                                    
                                                                                                                                
     (2) must,  when allocating available money  in the fund                                                                
     under  this section,  grant a  preference, between  two                                                                
     applicants, to  the applicant with a  higher percentage                                                                
     of  resident  workers  in  the  applicant's  workforce,                                                                
     including  workers employed  by the  applicant's direct                                                                
     contractors,  in the  state  in  the previous  calendar                                                                
     year;  in this  paragraph,  "resident  worker" has  the                                                                
     meaning given in AS 43.40.092(b):                                                                                      
                                                                                                                                
CHAIR  TALERICO continued  to  explain that  the  CCS leaves  the                                                               
Senate  repurchase  restrictions intact,  as  shown  on page  22,                                                               
lines 17-23, which read:                                                                                                        
                                                                                                                                
     (3) must provide  for the purchase of  the amount equal                                                                
     to the first 50 percent  of the credit repurchase limit                                                                
     per person under  (e) of this section at a  rate of 100                                                                
     percent of the  value of the certificate  or portion of                                                                
     the  certificate  requested  to be  purchased  and  the                                                                
     amount  equal to  the  next 50  percent  of the  credit                                                                
     repurchase limit  per person under (e)  of this section                                                                
     at  a  rate   of  75  percent  of  the   value  of  the                                                                
     certificate or portion of  the certificate requested to                                                                
     be purchased.                                                                                                          
                                                                                                                                
2:11:23 PM                                                                                                                    
                                                                                                                                
SENATOR GIESSEL moved that pursuant  to receiving limited powers,                                                               
the Conference  Committee for  HB 247  recommends that  the House                                                               
and Senate adopt the CCS for HB 247, Version 29-GH2609\EE.                                                                      
                                                                                                                                
2:11:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR  objected  for  discussion  purposes.    She                                                               
called  attention to  Section 8,  in  both the  House and  Senate                                                               
versions, and said DOR indicated  that the language in the Senate                                                               
version could  be problematic in  figuring out the  interest rate                                                               
on  delinquent oil  and gas  taxes.   Although she  did not  have                                                               
further supporting  documents, Representative Tarr  suggested the                                                               
aforementioned provision needs further consideration.                                                                           
                                                                                                                                
2:12:56 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.  Representatives  Olson and Talerico                                                               
voted in  favor of  the motion  to recommend  that the  House and                                                               
Senate adopt  CCS for  HB 247, Version  EE.   Representative Tarr                                                               
voted against it.  Senators  Coghill, Micciche, and Giessel voted                                                               
in favor  of the motion  to recommend  that the House  and Senate                                                               
adopt CCS for  HB 247, Version EE.  Therefore,  the motion passed                                                               
by a vote of 2:1 (House) and 3:0 (Senate).                                                                                      
                                                                                                                                

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