Legislature(2015 - 2016)BILL RAY CENTER 230
06/06/2016 02:00 PM CONFERENCE COMMITTEE ON HB247
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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).