Legislature(2017 - 2018)BARNES 124

02/27/2017 01:00 PM RESOURCES

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Audio Topic
01:00:26 PM Start
01:01:03 PM Presentation(s): United Tribes of Bristol Bay
01:45:38 PM HB111
03:03:45 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Investigation of Reclaimed Drill TELECONFERENCED
Sites, Pebble Project by Alannah Hurley, United
Tribes of Bristol Bay
-- Testimony <Invitation Only> --
+= HB 111 OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
Rich Ruggiero, Oil & Gas Consultant, Legislative
Budget & Audit Committee
**Streamed live on AKL.tv**
        HB 111-OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS                                                                    
                                                                                                                                
1:45:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR  announced that  the final  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."                                                                                               
                                                                                                                                
CO-CHAIR TARR made announcements.                                                                                               
                                                                                                                                
1:47:10 PM                                                                                                                    
                                                                                                                                
RICHARD  RUGGIERO,  Consultant,   Legislative  Audit  and  Budget                                                               
Committee,  Alaska State  Legislature;  Managing Partner,  Castle                                                               
Gap  Advisors,  provided   a  PowerPoint  presentation  entitled,                                                               
"Petroleum Taxation  Design," dated 2/27/17.   He summarized from                                                               
an  earlier   presentation  to   the  House   Resources  Standing                                                               
Committee   entitled,   "Developing  Petroleum   Fiscal   Policy"                                                               
provided at the  meeting of 2/20/17, restating  the following key                                                               
points:   there  is constant  change in  the industry,  including                                                               
government terms;  governments often make corrections  to a near-                                                               
term  issue  which  jeopardizes   long-term  goals;  increase  in                                                               
government  take  is  a  reduction   in  value  for  industry;  a                                                               
historical  perspective   and  transparency  create   better  tax                                                               
systems;  new  players should  be  encouraged;  regime to  regime                                                               
comparisons should be questioned;  countries have different needs                                                               
[slide  3].    Slide  4  illustrated  petroleum  taxation  change                                                               
charts, and he acknowledged many  governments change their fiscal                                                               
systems  in response  to the  volatility  in oil  prices, as  was                                                               
presented  in  previous  testimony  by the  Alaska  Oil  and  Gas                                                               
Association (AOGA).   The charts identified  the many governments                                                               
that  increased their  take during  rising oil  prices, and  that                                                               
during  periods  of  rapid  decline  in  oil  price,  governments                                                               
lowered take and created incentives.                                                                                            
                                                                                                                                
1:53:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  pointed out  when  oil  was plummeting  in                                                               
value,  Alaska  was the  only  regime  that increased  government                                                               
take.    His  stated  the  distinction  between  the  two  slides                                                               
[presented by Mr.  Ruggiero and AOGA] is his  concern that Alaska                                                               
will not be competitive if it  tries "to squeeze more revenue out                                                               
of, out of an already struggling industry."                                                                                     
                                                                                                                                
MR. RUGGIERO agreed.                                                                                                            
                                                                                                                                
REPRESENTATIVE  RAUSCHER questioned  whether  the information  on                                                               
the aforementioned  charts indicated if  any of the  many changes                                                               
in fiscal policy  were successful, for example,  the changes made                                                               
by Russia.                                                                                                                      
                                                                                                                                
MR.  RUGGIERO observed  the United  Kingdom has  made significant                                                               
changes in  response to high  and low oil prices;  however, other                                                               
countries  react  in   an  incremental  way.     In  Russia,  the                                                               
government  has  taken over  a  working  ownership interest  from                                                               
multinational  companies that  had started  or developed  fields.                                                               
In  further response  to Representative  Rauscher,  he said  some                                                               
changes  are working,  and countries  have gained  investment and                                                               
development.   However, sometimes a successful  policy is unique,                                                               
and he gave an example of  a Southeast Asia country that needed a                                                               
source for natural gas.                                                                                                         
                                                                                                                                
REPRESENTATIVE JOHNSON  understood the  charts on slide  4 intend                                                               
to  give a  sense  of  the inconsistencies  in  Alaska's oil  tax                                                               
policy.   However, she pointed  out that  from January 15  all of                                                               
the  changes  [to  other  regimes]  are  consistently  to  fiscal                                                               
incentives,  because oil  prices  are going  down,  and when  oil                                                               
prices   go  up,   they   are   consistently  increasing   taxes.                                                               
Representative Johnson  concluded Alaska is  one of the  latest -                                                               
and may be the only - regime to increase government take.                                                                       
                                                                                                                                
2:00:40 PM                                                                                                                    
                                                                                                                                
MR. RUGGIERO agreed  the charts indicate that in  periods of very                                                               
low  prices  most,  if  not   all,  governments  change  to  more                                                               
favorable  terms.   Whether  a  system  should  be changed  at  a                                                               
certain  point lies  with the  legislature,  and the  information                                                               
provided is to inform its decision.                                                                                             
                                                                                                                                
REPRESENTATIVE TALERICO noted the  regime comparisons are usually                                                               
between  Alaska  and  sovereign nations;  however,  as  a  state,                                                               
Alaska has  to also  contend with federal  take, as  other states                                                               
must, and as do  Canada and Alberta.  The U.S.  tax rate does not                                                               
change  often, and  he questioned  whether there  are comparisons                                                               
with other states.                                                                                                              
                                                                                                                                
MR. RUGGIERO pointed out the  charts include U.S. Gulf of Mexico,                                                               
which are federal waters, and  where changes in royalty rates and                                                               
in lease payments in the last  decade have occurred.  Further, in                                                               
most  of the  Lower 48,  the acreage  involved in  oil production                                                               
garners private royalty, such as  in Texas, where new land leases                                                               
are  approximately  one-quarter  royalty   and  above,  thus  the                                                               
payment for  the acreage goes  to a  private mineral holder.   He                                                               
explained comparing operator take  to "government" take is really                                                               
comparing operator  take to "non-operator" take,  because some of                                                               
the take  goes to  private holders  of the  mineral rights.   Mr.                                                               
Ruggiero   directed  attention   to  slide   5,  and   summarized                                                               
"takeaways" as  follows:   there is no  ideal structure  and many                                                               
are unique,  however, some aspects  are more  successful; regimes                                                               
seek to produce  a level playing field; all  systems have biases.                                                               
He  then listed  long-term  strategic  petroleum taxation  design                                                               
goals for Alaska as follows [slide  7]:  keep oil flowing through                                                               
the   Trans-Alaska   Pipeline   System  (TAPS);   encourage   the                                                               
exploration  and   development  of  new  fields;   encourage  new                                                               
operators;  understand and  capture value  from existing  fields;                                                               
create more durability  to the taxation system.   Further, Alaska                                                               
has  high  potential  and  prospectivity but  will  always  be  a                                                               
higher-cost area  for the exploration, discovery,  and production                                                               
of oil [slide 7].                                                                                                               
                                                                                                                                
2:08:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER  opined  the state  always  intends  for                                                               
"long-term strategic  goals for  Alaska," and always  enters into                                                               
agreements  projecting a  long period  of  stability, "and  then,                                                               
couple years later, we're rewriting it."                                                                                        
                                                                                                                                
MR.  RUGGIERO  said  his presentation  addresses  how  unintended                                                               
consequences and  results occur,  and whether  there are  ways to                                                               
include in legislation procedures that  "stand the test of time."                                                               
For example, modeling can be  too simplistic, and may not include                                                               
some of the  factors that will change in the  future, which skews                                                               
the results.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  recalled last  year  there  was a  welcome                                                               
uptick  in production  that  appeared  to be  the  result of  the                                                               
stability  provided by  Senate  Bill 21  [passed  in the  Twenty-                                                               
Eighth  Alaska State  Legislature]; he  questioned why  the state                                                               
would make changes to a successful tax structure.                                                                               
                                                                                                                                
MR. RUGGIERO  pointed out there  are aspects to  Alaska's current                                                               
tax  structure that  will lead  to  unintended consequences  when                                                               
circumstances change, for example, the minimum tax.                                                                             
                                                                                                                                
REPRESENTATIVE  BIRCH pointed  out  HB 111  raises an  additional                                                               
$300 million  in state revenue,  which is a massive  tax increase                                                               
on industry.                                                                                                                    
                                                                                                                                
MR. RUGGIERO  said he had not  reviewed "the numbers" on  HB 111,                                                               
but  at  this   time  is  providing  to   the  committee  helpful                                                               
background information based on  his extensive experience in this                                                               
regard.                                                                                                                         
                                                                                                                                
REPRESENTATIVE BIRCH  characterized Alaska's Clear  and Equitable                                                               
Share   (ACES)  [passed   in   the   Twenty-Fifth  Alaska   State                                                               
Legislature], with progressivity  that raised a lot  of money, as                                                               
"terrible from  an investment standpoint,"  and asked  whether it                                                               
was successful.                                                                                                                 
                                                                                                                                
MR. RUGGIERO stressed there is  a long lead time between spending                                                               
and production,  thus data is  not available to  indicate whether                                                               
the additional  production now generated  is because  of spending                                                               
attributed to  ACES, or  spending attributed  to Senate  Bill 21.                                                               
However, "a bit" of the spending  and arresting of the decline is                                                               
as  a  result  of  spending  after  ACES,  along  with  increased                                                               
employment.  He acknowledged the  very high progressivity rate in                                                               
ACES led to difficulty, but there were positive aspects also.                                                                   
                                                                                                                                
2:15:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   DRUMMOND   asked   whether   insufficient   data                                                               
regarding  ACES  and  Senate  Bill  21   is  due  to  a  lack  of                                                               
transparency.                                                                                                                   
                                                                                                                                
MR. RUGGIERO explained  it is known how much money  was spent but                                                               
it is unknown what  the money was spent on, "and  so we can't tie                                                               
the correlation between where the  production comes from and then                                                               
when the money was spent on  that production, or on the wells and                                                               
facilities  in order  to  get  there."   In  further response  to                                                               
Representative Drummond,  he said yes, because  [the legislature]                                                               
doesn't have the information and can't make a correlation.                                                                      
                                                                                                                                
MR. RUGGIERO  directed attention  to slide  8 that  listed short-                                                               
term goals at  a time when profits are low;  for example, keeping                                                               
industry  activity high  and  encouraging  operators to  continue                                                               
doing  business,  and  offering  incentives  for  new  investment                                                               
without putting the state in a "cash-reimbursement position."                                                                   
                                                                                                                                
REPRESENTATIVE JOHNSON  inquired as to  how a tax increase  in HB                                                               
111 will help increase production.                                                                                              
                                                                                                                                
MR. RUGGIERO responded:                                                                                                         
                                                                                                                                
     I have had  some dialogue in talking  with people about                                                                    
     it.   I am not  an advocate  of putting a  heavy burden                                                                    
     onto  the  oil companies  at  a  time when  there's  no                                                                    
     profit in the system.                                                                                                      
                                                                                                                                
REPRESENTATIVE   JOHNSON   expressed    her   understanding   the                                                               
presentation  is  "an  interpretation  of HB  111,  that's  being                                                               
offered to  address these  issues, and I  don't know  exactly how                                                               
[it] ... actually address[es] the issues ... put before us."                                                                    
                                                                                                                                
CO-CHAIR TARR  said the committee would  return to Representative                                                               
Johnson's question.                                                                                                             
                                                                                                                                
MR.  RUGGIERO continued  to a  comparison  of Alaska's  petroleum                                                               
taxation terms to those in the Lower 48 [slide 10]:                                                                             
                                                                                                                                
   · Royalty:  The royalty charged in Alaska is in line with                                                                    
     that of  older leases  in the  Lower 48,  many of  which are                                                               
     one-eighth royalty.  Alaska is  more favorable when compared                                                               
     to new royalty  rates, which are at a 20  percent minimum in                                                               
     Texas;  new  private  leases   average  around  20  percent,                                                               
     depending  on the  location of  the  land.   In addition  to                                                               
     higher  royalty, many  new  leases have  a  "drill or  drop"                                                               
     provision which  escalates fees to  force activity,  thus an                                                               
     oil company  faces a  deadline and  may drill  an uneconomic                                                               
     well just to hold on to its lease.                                                                                         
                                                                                                                                
   · Effective tax rate:  Under Senate Bill 21, Alaska has one                                                                  
     of  the   lower  tax  rates  and   competes  mainly  against                                                               
     severance tax rates.                                                                                                       
                                                                                                                                
   · Credits:  Alaska's exploration and production credits are                                                                  
     very unique  and valuable to  the industry as they  serve to                                                               
     overcome  the additional  risk associated  with the  state's                                                               
     environment and long lead time.                                                                                            
                                                                                                                                
   · Unique aspects:  Different taxation for location,                                                                          
     substantial and stackable credits,  and monthly taxation are                                                               
     unique to Alaska.                                                                                                          
                                                                                                                                
MR. RUGGIERO,  speaking from  his experience  working in  the oil                                                               
industry, said  when projects are  considered, fiscal  terms have                                                               
to  meet certain  criteria,  but most  attention  is centered  on                                                               
relative risk; in fact, a project  may advance with a higher non-                                                               
operator take if risks can be mitigated.                                                                                        
                                                                                                                                
2:25:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH referred  to information previously provided                                                               
to  the  committee  indicating  HB  111  "shows  a  $300  million                                                               
increase in taxes.   ...  I'm concerned that  that is not stable,                                                               
that that is actually a pretty significant increase."                                                                           
                                                                                                                                
CO-CHAIR TARR  clarified Representative Birch was  referring to a                                                               
fiscal note, "and  those are the numbers for 2025,  so the actual                                                               
fiscal note  for the bill,  as it  stands in this  current fiscal                                                               
year, is $45 million."                                                                                                          
                                                                                                                                
MR. RUGGIERO  advised an increase can  be seen as stable  - if it                                                               
occurs at  the right time  - or  unstable, relative to  those who                                                               
are  impacted.   He cautioned  against looking  at situations  in                                                               
isolation.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  BIRCH,  referring to  a  statement  on slide  11,                                                               
questioned  whether stability  of  the petroleum  tax  is a  good                                                               
thing.                                                                                                                          
                                                                                                                                
MR. RUGGIERO  responded that  "you've got  a certain  increase in                                                               
one spot,  but you may have  also at the same  time enacted other                                                               
incentives, other credits, other  things that would actually draw                                                               
people in."   He urged for the committee to  look at the totality                                                               
of the circumstances.   Mr. Ruggiero directed  attention to slide                                                               
13, and  in response to  an earlier question  from Representative                                                               
Rauscher,  said governments  do believe  in their  legislation at                                                               
the  time of  enactment;  however, the  future brings  unintended                                                               
results  due  to  changing prices  and  unpredictable  variables.                                                               
Further,  interdependencies of  variables are  often ignored  for                                                               
modeling simplicity.   Self-correcting  systems attempt  to avoid                                                               
unintended  consequences;  one  approach  to  petroleum  taxation                                                               
theory is  that operators recover  their cost and a  fair return,                                                               
with  the  government to  receive  the  remainder.   However,  in                                                               
reality,  an  attempt  to  approach  taxation  design  from  this                                                               
direction  and to  determine the  operator's fair  share, returns                                                               
all  parties to  the ongoing  to debate  on what  is fair,  which                                                               
remains an  unanswered question.  Mr.  Ruggiero further explained                                                               
self-correcting   mechanisms   have    been   developed   because                                                               
governments are setting a tax  rate prospectively, and the future                                                               
is   unknown.     Therefore,  self-correcting   mechanisms  allow                                                               
governments and  operators to  make appropriate  adjustments such                                                               
as  project  profitability, and  fixed,  bracketed,  and S  curve                                                               
metrics [slide 14].                                                                                                             
                                                                                                                                
2:32:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH returned  attention to  slide 14  and asked                                                               
whether  it was  the  government's  role to  decide  what a  fair                                                               
return is for a business in the United States.                                                                                  
                                                                                                                                
MR. RUGGIERO clarified he is  presenting theories of costs and of                                                               
economic rent;  the theory of  economic rent is  that government,                                                               
as the  steward of  the resource,  should receive  economic rent,                                                               
which is everything that is in  excess of the company's return of                                                               
its cost  and a  return on its  costs.  He  said, "The  whole bit                                                               
about putting together petroleum  taxation systems is governments                                                               
deciding what  their fair  share is,  oil companies  battling and                                                               
trying  to  achieve  the  best  return that  they  can  on  their                                                               
resources, and trying to find that  point where you can make them                                                               
both work."                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BIRCH opined  the  risk is  made  by an  investor                                                               
during  exploration and  development, and  decisions are  made in                                                               
response to their  return [on investment].  He  said he struggled                                                               
to  accept that  the  government  would be  metering  out a  fair                                                               
return on investment for any business.                                                                                          
                                                                                                                                
MR.  RUGGIERO  noted that  when  many  countries set  a  windfall                                                               
profits tax on  a typical project they are setting  a cap on what                                                               
producers  will make;  in addition,  many  governments are  using                                                               
risk  service contracts  which  have defined  caps  and rates  of                                                               
return so that governments set  an expected range of profits, and                                                               
the range of profits is known to the oil company.                                                                               
                                                                                                                                
REPRESENTATIVE  JOHNSON asked  whether petroleum  taxation theory                                                               
is a field of study.                                                                                                            
                                                                                                                                
MR. RUGGIERO explained the aforementioned  theory applies for all                                                               
extractive industries in which the  government is the owner of an                                                               
asset and  hires a  private company  to develop  its asset.   The                                                               
theory of  economic rent  is that whoever  develops on  behalf of                                                               
the state should  recover their costs and a fair  return, and the                                                               
government  gets the  rest  as the  owner of  the  resource.   He                                                               
returned to  options for  Alaska and  suggested adopting  a self-                                                               
correcting system  that would  remove much  of the  complexity of                                                               
the  current tax  system,  and some  of  the unintended  results.                                                               
Firstly,  in  order to  create  durability,  the state  needs  to                                                               
retain its net  based system which is based on  margin and not on                                                               
price; in fact, fixing a system  on price is "setting yourself up                                                               
for some  of these  unintended consequences or  ... if  you don't                                                               
make changes, then people are going  to pick up their toys and go                                                               
home."    Also,  a  system   based  on  margin  and  profit  will                                                               
demonstrate to  producers there will  be sharing on the  low end,                                                               
and on  the high end, as  well [slide 15].   Slide 16 illustrated                                                               
an example of an unintended consequence:   The intent at the time                                                               
of  the legislation  was that  there was  to be  no tax  when the                                                               
companies were losing money, however,  there has been a $25 shift                                                               
in cost, and thus companies have  an additional burden of a gross                                                               
tax when they are losing money [slides 16 and 17].                                                                              
                                                                                                                                
2:42:40 PM                                                                                                                    
                                                                                                                                
MR.  RUGGIERO,  referring  to  changes  that  can  result  in  an                                                               
unintended consequence,  provided a  chart that showed  the total                                                               
average cost of  production has increased from  $17.34 per barrel                                                               
in  2007 to  $35.64 per  barrel  in 2016  [slide 18].   Slide  19                                                               
illustrated another  possible unintended consequence  of Alaska's                                                               
current tax structure, and he explained:                                                                                        
                                                                                                                                
     If  at any  point, if  your effective  tax rate  is the                                                                    
     same as the  tax rate at which your  NOLs are converted                                                                    
     to a credit,  you're in a[n] equal  situation whether I                                                                    
     get an NOL carry forward or  I get the tax credit.  ...                                                                    
     We'll  leave  the  time  value out  on  it  right  now.                                                                    
     However,  if you're  ... giving  credits at  35 percent                                                                    
     and your effective tax rate  is only 10, that credit is                                                                    
     actually  shielding  three  and  [one]-half  times  the                                                                    
     margin  than the  loss that  created  that tax  credit.                                                                    
     And that  has to do  with the differential  between the                                                                    
     rate at which  the NOLs converted to a  credit and then                                                                    
     the rate  at which their  future revenues are  taxed at                                                                    
     when they use those credits.                                                                                               
                                                                                                                                
CO-CHAIR TARR advised the committee  will have further discussion                                                               
related to effective tax rates and NOLs.                                                                                        
                                                                                                                                
MR.  RUGGIERO   said  his  first   option  for   the  committee's                                                               
consideration is  to continue with  the net tax system  - outside                                                               
of royalty - and ensure mechanisms  of the system are not tied to                                                               
price  but to  margins,  and  to include  a  low  base rate  with                                                               
bracketed progressivity,  which be a system  that would eliminate                                                               
features  such as  gross  value reduction  (GVR)  and per  barrel                                                               
credits.   He stressed that  a net  system requires the  state to                                                               
become an indirect  investor in every project,  because it allows                                                               
income to be offset  by costs.  The second option  is for the use                                                               
of carry forward losses instead  of cashable credits, so that the                                                               
state invests indirectly and after  the project is online through                                                               
taxes not  paid.  Also  as an  indirect investor, the  state must                                                               
insure costs are reasonable, and  that there is no duplication of                                                               
facilities.    Further, the  state  must  continue to  offer  top                                                               
quartile,  or decile,  exploration and  investment incentives  to                                                               
ensure further  activity, and allow certain  conditional cashable                                                               
credits.   Mr.  Ruggiero further  suggested an  uplift factor  to                                                               
compensate  for the  time value  of  money, and  that credits  or                                                               
uplift should  be tied  to a minimum  level of  data transparency                                                               
[slide 21].                                                                                                                     
                                                                                                                                
2:50:16 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR asked for an example  of "uplift to account for the                                                               
time value of money."                                                                                                           
                                                                                                                                
MR. RUGGIERO explained  some countries offer an  annual uplift on                                                               
any unused losses or NOLs; for  example, in a year NOLs or losses                                                               
are  not used,  they are  increased by  10 percent,  so when  the                                                               
operator  eventually uses  the credit  or  loss, it  has a  value                                                               
similar  to if  it had  been cashed  or used  immediately against                                                               
current income.  This type of  uplift can be open-ended or extend                                                               
for a  set length of  time.  Other  regimes use a  mechanism that                                                               
provides a one-time, lump-sum, 100  percent uplift, which creates                                                               
an incentive  to expedite a development  by a certain date.   Mr.                                                               
Ruggiero returned  attention to a  gross versus a net  system and                                                               
restated  his next  option, which  is to  retain the  net system.                                                               
However, he  advised keeping  royalty along  with the  net system                                                               
because   worldwide,  all   regimes   where  petroleum   revenues                                                               
represent  a large  portion of  the treasury  include royalty  in                                                               
their  fiscal   systems,  even  though  royalty   may  have  been                                                               
eliminated in regimes  where petroleum revenues are  a small part                                                               
of  total revenue.   Because  Alaska is  predominately funded  by                                                               
petroleum,  the state  should  retain royalty  [slide  22].   Net                                                               
systems have options for rates,  and he suggested the best option                                                               
for Alaska would  be a net system with bracketed  steps, based on                                                               
increased profitability per barrel:   at high profits per barrel,                                                               
"you can  step up your  tax, when the  profit per barrel  is very                                                               
low,  that's when  you start  from a  low tax"  [slide 23].   Mr.                                                               
Ruggiero  reviewed  a  net  system   with  stepped  or  bracketed                                                               
progressivity that  is based on margin  or profit and not  on oil                                                               
price, and which will adjust as  costs and inflation "[go] up and                                                               
down with  respect to the oil  patch."  For a  successful system,                                                               
the state  must determine  the starting tax  rate, the  number of                                                               
steps, and how  broad the change in state take  is between steps.                                                               
He reminded the  committee that every dollar of  profit not taken                                                               
as  state take  remains subject  to state  and federal  corporate                                                               
income tax [slide  24].  Although not a  recommendation, slide 25                                                               
illustrated  how   a  bracketed  net  tax   functions  -  without                                                               
accommodations for  GVR or per  barrel credits - and  he provided                                                               
an explanation.   Slide  26 illustrated an  example of  the self-                                                               
correcting  nature  of  the aforementioned  tax  system,  and  he                                                               
provided an explanation.   He said working models of  a net based                                                               
bracketed system, relative credits,  and effective tax rates will                                                               
be  presented at  the meeting  of [2/27/17  at 7:00  p.m.] [slide                                                               
27].   Mr. Ruggiero  concluded his options  for the  committee to                                                               
consider are as follows [slide 28]:                                                                                             
                                                                                                                                
    · retain a net tax system that has self-correcting mechanisms                                                               
      and is based on taxing on profitability                                                                                   
    · simplify as much as possible                                                                                              
    · utilize a system that ensures operators can recover all of                                                                
      their costs                                                                                                               
    · allow NOLs to carry forward and be recovered from                                                                         
      production-based income                                                                                                   
    · provide uplift for the time value of money.                                                                               
                                                                                                                                
[HB 111 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB111 ver O 2.8.17.PDF HRES 2/13/2017 1:00:00 PM
HRES 2/17/2017 1:00:00 PM
HRES 2/20/2017 1:00:00 PM
HRES 2/22/2017 1:00:00 PM
HRES 2/22/2017 6:30:00 PM
HRES 2/24/2017 1:00:00 PM
HRES 2/27/2017 1:00:00 PM
HRES 3/1/2017 1:00:00 PM
HRES 3/1/2017 6:00:00 PM
HRES 3/6/2017 6:30:00 PM
HRES 3/8/2017 1:00:00 PM
HB 111
HB111 Fiscal Note DOR-TAX 2.12.17.pdf HRES 2/13/2017 1:00:00 PM
HRES 2/17/2017 1:00:00 PM
HRES 2/22/2017 1:00:00 PM
HRES 2/22/2017 6:30:00 PM
HRES 2/24/2017 1:00:00 PM
HRES 2/27/2017 1:00:00 PM
HRES 3/1/2017 1:00:00 PM
HRES 3/1/2017 6:00:00 PM
HRES 3/6/2017 6:30:00 PM
HRES 3/8/2017 1:00:00 PM
HRES 3/13/2017 1:00:00 PM
HB 111
HB111 Sponsor Statement 2.12.17.pdf HRES 2/13/2017 1:00:00 PM
HRES 2/17/2017 1:00:00 PM
HRES 2/20/2017 1:00:00 PM
HRES 2/22/2017 1:00:00 PM
HRES 2/22/2017 6:30:00 PM
HRES 2/24/2017 1:00:00 PM
HRES 2/27/2017 1:00:00 PM
HRES 3/1/2017 1:00:00 PM
HRES 3/1/2017 6:00:00 PM
HRES 3/6/2017 6:30:00 PM
HRES 3/8/2017 1:00:00 PM
HRES 3/13/2017 1:00:00 PM
HB 111
HB111 Sectional Analysis 2.12.17.pdf HRES 2/13/2017 1:00:00 PM
HRES 2/17/2017 1:00:00 PM
HRES 2/20/2017 1:00:00 PM
HRES 2/22/2017 1:00:00 PM
HRES 2/22/2017 6:30:00 PM
HRES 2/24/2017 1:00:00 PM
HRES 2/27/2017 1:00:00 PM
HRES 3/1/2017 1:00:00 PM
HRES 3/1/2017 6:00:00 PM
HRES 3/6/2017 6:30:00 PM
HRES 3/8/2017 1:00:00 PM
HB 111
UTBB 2016 MLUP Renewal Official Comments Cover Letter.pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
2015-11-03 -- FINAL Petition to DNR re PLP Exploration w Exhibits-2.pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
2016 09 20 Comparison of CSP2 and DNR results at overlapping sites.MEMO.pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
2016 11 15 Nunamta Letter re_ Pebble MLUP Violations (1) (1) (1).pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
CSP2 PEBBLE DRILL HOLE RECLAMATION - CSP2 3NOV16 (2).pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
CSP2 Pebble Inspection Summary Report - DMC 3Nov16 (4).pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
Northern Dynasty Minerals NAK.pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
PebbleTimeline[4] (1).pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
UTBB Juneau Presentation - Feb27.pdf HRES 2/27/2017 1:00:00 PM
United Tribes of Bristol Bay
HB111 Supporting Document-Castle Gap Advisors_Presentation to House Resources 2.27.17.pdf HRES 2/27/2017 1:00:00 PM
HB 111
HB111 Supporting Document - Responses from Rich Ruggiero in Followup to 20170220 2.27.17.pdf HRES 2/27/2017 1:00:00 PM
HB 111