Legislature(2017 - 2018)SENATE FINANCE 532

04/29/2017 09:00 AM FINANCE

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Audio Topic
09:02:32 AM Start
09:04:10 AM HB111
09:04:16 AM Public Testimony
10:54:33 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 111 OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS TELECONFERENCED
Heard & Held
-- Public Testimony <9:00 a.m. - 11:00 a.m.> --
Must be Signed up by 10:30 a.m.
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR HOUSE BILL NO. 111(FIN)(efd fld)                                                                                       
                                                                                                                                
     "An Act  relating to  the oil  and gas  production tax,                                                                    
     tax  payments,   and  credits;  relating   to  interest                                                                    
     applicable to  delinquent oil  and gas  production tax;                                                                    
     relating  to carried-forward  lease expenditures  based                                                                    
     on losses  and limiting those lease  expenditures to an                                                                    
     amount  equal  to  the  gross value  at  the  point  of                                                                    
     production of  oil and gas  produced from the  lease or                                                                    
     property  where  the  lease expenditure  was  incurred;                                                                    
     relating to  information concerning tax  credits, lease                                                                    
     expenditures, and  oil and gas  taxes; relating  to the                                                                    
     disclosure of that information  to the public; relating                                                                    
     to an  adjustment in  the gross value  at the  point of                                                                    
     production;  and  relating  to  a  legislative  working                                                                    
     group."                                                                                                                    
                                                                                                                                
9:04:10 AM                                                                                                                    
                                                                                                                                
^PUBLIC TESTIMONY                                                                                                             
                                                                                                                                
9:04:16 AM                                                                                                                    
                                                                                                                                
GAIL PHILIPS,  KEEP ALASKA, ANCHORAGE  (via teleconference),                                                                    
testified  in support  of  the most  recent  version of  the                                                                    
bill. She opposed  restructuring of the current  oil and gas                                                                    
tax policy.                                                                                                                     
                                                                                                                                
9:05:10 AM                                                                                                                    
                                                                                                                                
ANDY BOND,  SELF, ANCHORAGE (via  teleconference), testified                                                                    
in  support of  the most  recent  version of  the bill,  and                                                                    
opposed the house  version of the bill. He  felt that Alaska                                                                    
could  not  compete  at  the  lower  cost  of  oil  and  gas                                                                    
production in the lower 48.                                                                                                     
                                                                                                                                
9:07:03 AM                                                                                                                    
                                                                                                                                
JAMES   MCMILON,  TEAMSTERS   LOCAL   959,  FAIRBANKS   (via                                                                    
teleconference),  testified against  legislation that  would                                                                    
negatively impact  the oil and  gas production.  He stressed                                                                    
that more production would result in more jobs.                                                                                 
                                                                                                                                
9:09:17 AM                                                                                                                    
                                                                                                                                
TOM  WALSH,  SELF,  ANCHORAGE (via  teleconference),  shared                                                                    
that  his company  was  suffering from  low  oil prices.  He                                                                    
spoke against the legislation.                                                                                                  
                                                                                                                                
9:10:56 AM                                                                                                                    
                                                                                                                                
KEITH   SILVER,   SELF,  ANCHORAGE   (via   teleconference),                                                                    
testified  that he  wanted the  state to  have a  consistent                                                                    
fiscal policy.                                                                                                                  
                                                                                                                                
9:12:40 AM                                                                                                                    
                                                                                                                                
CARL  PORTMAN, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
against  early  versions  of  the bill.  He  felt  that  the                                                                    
committee substitute  had a  reasonable compromise.  He felt                                                                    
that the  best way to produce  revenue for the state  was to                                                                    
increase oil production.                                                                                                        
                                                                                                                                
9:15:17 AM                                                                                                                    
                                                                                                                                
BEN  MULLIGAN, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in support of the current committee substitute of the bill.                                                                     
                                                                                                                                
9:16:32 AM                                                                                                                    
                                                                                                                                
CURTIS THAYER, PRESIDENT AND  CEO, ALASKA CHAMBER, ANCHORAGE                                                                    
(via  teleconference), spoke  in  support  of the  committee                                                                    
substitute version of the bill.                                                                                                 
                                                                                                                                
9:18:11 AM                                                                                                                    
                                                                                                                                
KATI  CAPOZZI, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in support of  the current version of the bill,  but did not                                                                    
support any  change of the  policy. She urged  the committee                                                                    
to make no further changes to the bill.                                                                                         
                                                                                                                                
9:19:01 AM                                                                                                                    
                                                                                                                                
ELSTUN  LAUESEN, SELF,  JUNEAU,  spoke  against the  current                                                                    
version of the bill.                                                                                                            
                                                                                                                                
9:22:28 AM                                                                                                                    
                                                                                                                                
JUDY  CRONDAHL,  SELF,  JUNEAU,   shared  a  story  about  a                                                                    
legislator who did not have a  hand. She spoke in support of                                                                    
the house version of the legislation.                                                                                           
                                                                                                                                
9:25:24 AM                                                                                                                    
                                                                                                                                
CATHY  DUXBURY, SELF,  ANCHORAGE (via  teleconference), felt                                                                    
that the  legislature should not continually  change the oil                                                                    
and gas tax structure.                                                                                                          
                                                                                                                                
9:26:29 AM                                                                                                                    
                                                                                                                                
JIM PLAQUET,  SELF, BIRCH  LAKE (via  teleconference), spoke                                                                    
in support of the current version of the bill.                                                                                  
                                                                                                                                
9:27:45 AM                                                                                                                    
                                                                                                                                
MIKE  COONS, SELF,  PALMER  (via  teleconference), spoke  in                                                                    
support of the focusing on the votes of the Alaskans.                                                                           
                                                                                                                                
9:30:13 AM                                                                                                                    
                                                                                                                                
JOE   RINTALA,   TEAMSTERS   LOCAL   959,   ANCHORAGE   (via                                                                    
teleconference), spoke in support  of the current version of                                                                    
the legislation.                                                                                                                
                                                                                                                                
9:32:53 AM                                                                                                                    
                                                                                                                                
ALEX  VAUGHAN, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in  support of  legislation that  encouraged oil  production                                                                    
and development.                                                                                                                
                                                                                                                                
9:35:32 AM                                                                                                                    
                                                                                                                                
WILLIAM WILLENBRUNK,  SELF, ANCHORAGE  (via teleconference),                                                                    
spoke in support of the current version of the bill.                                                                            
                                                                                                                                
9:36:55 AM                                                                                                                    
                                                                                                                                
JAMES UDELHOVEN,  SELF, KASILOF (via  teleconference), spoke                                                                    
in support of the most recent version of the bill.                                                                              
                                                                                                                                
9:38:15 AM                                                                                                                    
                                                                                                                                
KELLY   DROOP,   SELF,   ANCHORAGE   (via   teleconference),                                                                    
testified in support of the current version of the bill.                                                                        
                                                                                                                                
9:39:27 AM                                                                                                                    
                                                                                                                                
BEN  ANGLEN,  SELF,  ANCHORAGE (via  teleconference),  spoke                                                                    
against  the original  house  version of  the  bill, and  in                                                                    
support of the current version.                                                                                                 
                                                                                                                                
9:41:39 AM                                                                                                                    
                                                                                                                                
FAITH  MARTINEAU, SELF,  EAGLE  RIVER (via  teleconference),                                                                    
spoke in support of the current version of the bill.                                                                            
                                                                                                                                
9:43:14 AM                                                                                                                    
                                                                                                                                
BART MEYER,  SELF, SITKA (via teleconference),  testified in                                                                    
support of the house version of the legislation.                                                                                
                                                                                                                                
9:45:30 AM                                                                                                                    
                                                                                                                                
STACEY  WAYNE, SELF,  SITKA (via  teleconference), spoke  in                                                                    
support of the house version of the bill.                                                                                       
                                                                                                                                
9:48:53 AM                                                                                                                    
                                                                                                                                
MARLEANNA  HALL,  EXECUTIVE  DIRECTOR  RESOURCE  DEVELOPMENT                                                                    
COUNCIL, ANCHORAGE (via teleconference),                                                                                        
                                                                                                                                
9:51:04 AM                                                                                                                    
                                                                                                                                
REBECCA  LOGAN,  GENERAL  MANAGER, ALASKA  SUPPORT  INDUSTRY                                                                    
ALLIANCE, ANCHORAGE  (via teleconference), spoke  in support                                                                    
of the current legislation.                                                                                                     
                                                                                                                                
9:52:20 AM                                                                                                                    
                                                                                                                                
RENEE  LIMOGE REEVE,  SELF, ANCHORAGE  (via teleconference),                                                                    
spoke in support  of legislation that supported  oil and gas                                                                    
production and development.                                                                                                     
                                                                                                                                
9:53:25 AM                                                                                                                    
                                                                                                                                
SANDRA   UDELHOVEN,   SELF,  KANIK   (via   teleconference),                                                                    
testified  in   support  of  the  current   version  of  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
9:54:56 AM                                                                                                                    
                                                                                                                                
JAKE  JACOBSON, SELF,  KODIAK (via  teleconference), opposed                                                                    
all oil credits.                                                                                                                
                                                                                                                                
9:56:51 AM                                                                                                                    
                                                                                                                                
PAMELA MILLER,  SELF, FAIRBANKS (via  teleconference), spoke                                                                    
against oil tax credits. She  supported the house version of                                                                    
the bill.                                                                                                                       
                                                                                                                                
10:00:24 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:01:26 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:01:32 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  announced that  there was an  attempt to                                                                    
determine  the revenue  that the  oil industry  had produced                                                                    
for the state.                                                                                                                  
                                                                                                                                
10:02:25 AM                                                                                                                   
                                                                                                                                
JOHN  SONIN, SELF,  JUNEAU  (via  teleconference), spoke  in                                                                    
support of the house version of the bill.                                                                                       
                                                                                                                                
10:06:02 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:06:31 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:06:38 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon announced  that  from 2006  to 2014  the                                                                    
state  paid  $7.4  billion  in  credits,  and  received  $40                                                                    
billion in revenue.                                                                                                             
                                                                                                                                
10:07:04 AM                                                                                                                   
                                                                                                                                
KARLA  HART, SELF,  JUNEAU  (via  teleconference), spoke  in                                                                    
support of the house version of the legislation.                                                                                
                                                                                                                                
Co-Chair MacKinnon announced that  there was a limitation on                                                                    
the time that  an uplift could occur. She  stated that there                                                                    
was an expiration  on the credit, she remarked  that 7 years                                                                    
matched the  federal code for deductibility  for losses. Ms.                                                                    
Hart felt that a large  economic decision should not be made                                                                    
in a hasty manner.                                                                                                              
                                                                                                                                
Senator  Micciche  stressed  that   cash  credits  were  not                                                                    
sustainable, and  Alaska had  the only  cash credits  in the                                                                    
world.                                                                                                                          
                                                                                                                                
10:12:28 AM                                                                                                                   
                                                                                                                                
ALICIA    SIIRA,   EXECUTIVE    DIRECTOR,   ALASKA    MINERS                                                                    
ASSOCIATION,  ANCHORAGE (via  teleconference), testified  in                                                                    
support of the bill.                                                                                                            
                                                                                                                                
10:14:25 AM                                                                                                                   
                                                                                                                                
JEREMY  PRICE, ALASKA  DIRECTOR,  AMERICANS FOR  PROSPERITY,                                                                    
ANCHORAGE   (via  teleconference),   spoke  in   support  of                                                                    
predictable tax rates for industry.                                                                                             
                                                                                                                                
10:16:30 AM                                                                                                                   
                                                                                                                                
MIKE   DAVIDSON,   SELF,  GIRDWOOD   (via   teleconference),                                                                    
testified in support of the house version of the bill.                                                                          
                                                                                                                                
10:19:41 AM                                                                                                                   
                                                                                                                                
GARY MCDONALD,  SELF, ANCHORAGE (via  teleconference), spoke                                                                    
in support of the legislation.                                                                                                  
                                                                                                                                
10:21:22 AM                                                                                                                   
                                                                                                                                
STEPHEN   SORENSEN,  SELF,   JUNEAU  (via   teleconference),                                                                    
wondered whether  there was a  calculation that  would allow                                                                    
Alaskans to  understand whether an oil  company could deduct                                                                    
their costs over a ten-year  period, and whether the revenue                                                                    
to  Alaska  would  be  sufficient   to  pay  for  the  state                                                                    
services.                                                                                                                       
                                                                                                                                
Co-Chair MacKinnon  announced that deducting expenses  was a                                                                    
standard business  practice. Mr. Sorenson stated  that there                                                                    
would be  a cash flow  problem when businesses  could deduct                                                                    
100 percent of their costs over a short period of time.                                                                         
                                                                                                                                
Co-Chair  MacKinnon  stated  that the  losses  were  carried                                                                    
forward at 35 cents on the dollar.                                                                                              
                                                                                                                                
10:25:23 AM                                                                                                                   
                                                                                                                                
Senator Micciche  remarked that  there was a  current system                                                                    
where  certain allowable  costs  could be  written off,  and                                                                    
there was  no requirement that  they produce oil  to receive                                                                    
reimbursement. He stressed that it  was a problem. There was                                                                    
an attempt to change the  structure to only provide a credit                                                                    
after production. Mr. Sorenson  agreed and continued to make                                                                    
his point as previously stated.                                                                                                 
                                                                                                                                
10:29:27 AM                                                                                                                   
                                                                                                                                
MICHAEL  JESPERSON,  SELF, ANCHORAGE  (via  teleconference),                                                                    
spoke against changing the tax structure.                                                                                       
                                                                                                                                
10:30:43 AM                                                                                                                   
                                                                                                                                
TIM   GALLAGHER,  SELF,   ANCHORAGE  (via   teleconference),                                                                    
supported  legislation that  would encourage  a healthy  oil                                                                    
and gas industry.                                                                                                               
                                                                                                                                
10:33:11 AM                                                                                                                   
                                                                                                                                
JOHN  SHIVELY, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in support of the senate version of the bill.                                                                                   
                                                                                                                                
10:35:48 AM                                                                                                                   
                                                                                                                                
JOAN FRANZ,  SELF, FAIRBANKS (via teleconference),  spoke in                                                                    
support of the house version of the bill.                                                                                       
                                                                                                                                
10:37:20 AM                                                                                                                   
                                                                                                                                
EDWARD WESLEY,  SELF, ANCHORAGE (via  teleconference), spoke                                                                    
in support of the bill.                                                                                                         
                                                                                                                                
10:39:46 AM                                                                                                                   
                                                                                                                                
EVELYNN TREFON,  SELF, NEWHALEN (via  teleconference), spoke                                                                    
against credits to oil companies.                                                                                               
                                                                                                                                
10:41:05 AM                                                                                                                   
                                                                                                                                
WENDY   ALWARD,   SELF,  ANCHORAGE   (via   teleconference),                                                                    
supported the legislation.                                                                                                      
                                                                                                                                
10:42:30 AM                                                                                                                   
                                                                                                                                
FRANK KELTY, SELF,  UNALASKA (via teleconference), supported                                                                    
the house version of the bill.                                                                                                  
                                                                                                                                
10:45:03 AM                                                                                                                   
                                                                                                                                
MAYNARD TAPP, SELF, ANCHORAGE  (via teleconference), did not                                                                    
support  adding  costs  to government  operations  or  small                                                                    
businesses.                                                                                                                     
                                                                                                                                
Senator  Micciche wondered  whether Mr.  Tapp supported  the                                                                    
senate or house  version of the bill. Mr.  Tapp replied that                                                                    
he was in support of the revised version of HB 111.                                                                             
                                                                                                                                
10:48:02 AM                                                                                                                   
                                                                                                                                
BONNIE   LILLIE,  SELF,   ANCHORAGE  (via   teleconference),                                                                    
testified in support of the bill.                                                                                               
                                                                                                                                
10:49:40 AM                                                                                                                   
                                                                                                                                
CAMERON COWLES, SELF,  ANCHORAGE (via teleconference), spoke                                                                    
in support of the bill. He echoed the Ms. Lillie's remarks.                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Senator Micciche  felt that it  might be difficult  for some                                                                    
testifiers to understand the issues.                                                                                            
                                                                                                                                
                                                                                                                                
Vice-Chair Bishop thanked the testifiers.                                                                                       
                                                                                                                                
Co-Chair MacKinnon appreciated the impact of the public                                                                         
hearing. She announced that public comments could be                                                                            
submitted by email.                                                                                                             
                                                                                                                                
CSHB 111(FIN)(efd fld) was HEARD and HELD in committee for                                                                      
further consideration.                                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
HB 111 Public Testimony Letters 3.pdf SFIN 4/29/2017 9:00:00 AM
HB 111
HB 111 Weissler Comment 4.29.17.pdf SFIN 4/29/2017 9:00:00 AM
HB 111