Legislature(2017 - 2018)HOUSE FINANCE 519
03/25/2017 10:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB111 | |
| Public Testimony | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 111 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 25, 2017
10:04 a.m.
10:04:13 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 10:04 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Cathy Tilton
Representative Tammie Wilson
MEMBERS ABSENT
Representative Les Gara, Vice-Chair
Representative Steve Thompson
ALSO PRESENT
Representative Dean Westlake; Representative Justin Parish;
Representative Jonathan Kreiss-Tomkins
PRESENT VIA TELECONFERENCE
SUMMARY
HB 111 OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS
HB 111 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster addressed the agenda.
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."
10:05:28 AM
^PUBLIC TESTIMONY
10:05:31 AM
}Scott Ogan, Self, Juneau{ spoke in opposition to the bill.
He shared information about the company he worked for that
hoped to increase the production of heavy oil on the North
Slope by making the substance lighter through nanophysics.
He provided information about his past experience as an
Alaska legislator. He relayed that the current tax credits
were working. He shared that economics had gone south for a
company and subsequently they had gone south as well. He
communicated that the company he worked for had decided to
come to Alaska in part due to the tax credits. The
companies were small and dynamic, not like the large
ExxonMobil, ConocoPhillips, or BP. He discussed that the
small companies made decisions quickly and were currently
trying to decide whether Alaska was a good place to invest.
He stated that the changes to the tax system occurred more
than some individuals changed clothing. He stated that the
changes caused instability. He spoke to the billions
companies spent in infrastructure. Companies would decide
to take business elsewhere if the economics were not
attractive. He stated some companies looked at Alaska like
a third world nation. He implored the committee to provide
a stable system. He did not like what he saw occurring in
the state.
10:10:22 AM
Co-Chair Foster noted Representative Pruitt joined the
meeting. He shared that individuals would receive two
minutes to testify. He relayed that testifiers could also
send in written testimony.
10:11:32 AM
~Malena Marvin, Self, Petersburg{ supported the bill. She
believed the state had been giving away its oil for too
long. She spoke to the need for money for state programs.
She referred to steep cuts the local public radio station
was facing. She stated it did not make sense to give money
away to large corporations. She owned a small seafood
business and was not receiving cash subsidies from the
state.
10:12:53 AM
~George Pierce, Self, Kasilof{ spoke in favor of the
legislation. He stated tax credits were not working and
that companies received more in subsidies than they paid
out in taxes. He supported changing from a net tax system
to a gross tax system. He believed the past conduct of
North Slope producers warranted careful public attention.
He underscored that oil companies received more in
subsidies than they paid out in taxes. He emphasized that
the state could not continue the ongoing welfare to the oil
industry. He continued that the contribution to the economy
had dramatically decreased. The Permanent Fund Dividend had
been reduced to Alaskans all to pay subsidies to companies.
He wanted to see Alaska receiving its fair share for oil
and gas resources. He spoke to the need to reporting
requirements. He supported requesting Department of Natural
Resources to preapprove expenditures. He stressed that the
legislature did not even know how much oil companies made
due to confidentiality provisions. He stated that a company
paying a 10 percent profit tax received a 35 percent
reduction. He spoke to a conflict in interest in the
legislature due to members working for the oil industry.
10:17:55 AM
~Allen Icet, Self, Anchorage{ testified in opposition to
the bill. He believed everyone would agree that more oil in
the pipeline was the desired situation. He stated that
increasing taxes would not put more oil in the pipeline. He
shared that friends in the oil industry had lost their
jobs. He continued that increasing taxes would result in
the loss of more jobs. He spoke about thousands of Alaskans
working in the oil industry. He strongly encouraged the
committee to not support increased taxes.
10:19:48 AM
~Brad Faulkner, Self, Homer{ supported the bill. He shared
that he was in the fishing industry and had worked in the
oil industry over the years. He was concerned about the
state receiving a fair share for its oil. He shared that he
had followed the issue since 1973. He stated that people in
the oil industry would always complain that they did not
want to pay taxes. He did not understand subsidizing the
oil industry. He stated that currently when oil companies
owed taxes after three years they paid no interest, which
he supported changing. He shamed the GOP majority from the
prior year related to credits given to the oil industry. He
provided an example of the revenue coming in for oil
companies. The current tax statute was disappointing as a
private citizen.
10:22:40 AM
~Bob Shavelson, Self, Homer{ testified in support of the
legislation, but he believed it did not go far enough. He
supported the comments of the previous speaker. He referred
to a cartoon from the 1970s that had been recounting the
three arguments made by the industry - that changing taxes
would make the location undesirable, other places would be
more attractive, and other. He believed it was necessary to
change from a gross to a net tax system. He underscored
there would never be a circumstance where the oil industry
would give up profits.
10:24:36 AM
~Larry DeVilbiss, Self, Mat-Su{ testified in opposition to
the bill. He had never worked directly for oil companies,
but he had developed businesses in the farming industry
that worked in competitively difficult situations. He
thought the issue of fair share had been established when
the royalty standards had been set up. He stated that if
the state treated its partners the way Venezuela did, it
would be in trouble in a few years. He asked the
legislature to put its first priority in cutting government
costs. He believed they needed to take caution to avoid
killing the golden goose.
10:27:29 AM
~Scott Hawkins, President and CEO, Advanced Supply Chain
International, Anchorage{ spoke against the legislation.
His company was oil and gas related. The company relied on
the private sector industry for a living. He provided
detail about the company and its employees. He stated that
the cash credits had largely been dealt with the prior year
in HB 247. He did not think it was wise to change the
system yet again. He furthered that the bill was bad for
the private sector economy. He spoke to the recession the
state was currently in and the subsequent job loss that had
resulted. He believed the bill would only deepen the
recession. He opined that the bill was also bad for the
public sector. He stated the public sector needed more
revenue. The bill would work against the long-term needs of
production. He emphasized that for the first time in 15
years, production was starting to increase. He underscored
that the current system was working. He urged the committee
to set the bill aside.
10:30:27 AM
~Dirk Nelson, Self, Fairbanks{ testified in support of the
legislation. He spoke to his support of the prior SB 21
referendum. He spoke to current legislators who had voted
against timely audits of oil companies. He had heard
references to thousands of individuals losing their jobs in
recent years. He countered that he had received information
that people were being hired under the job slogan during
the SB 21 referendum to indicate it was not about revenues,
but about jobs. He thought those individuals were stage
props. He stated that as soon as soon as oil companies had
won the SB 21 referendum BP and Conoco had laid off over 10
percent of their North Slope crew. At that time oil had
been about $80 per barrel. He addressed provisions of law
that allowed companies to call existing fields, new oil. He
underscored that SB 21 was not working. He did not believe
it was possible that SB 21 had influenced the uptick in
production. He referenced the 2011 Revenue Source Book that
had predicted upticks in production in 2014 and 2016. He
did not support giving away tax credits to the oil
companies.
10:34:19 AM
~Dan Sadler, Indivisible Alaska, Palmer{ spoke in favor of
the legislation, but he believed it did not go close to far
enough. He stated that Alaska was paying the oil companies
to take its oil. He furthered that Alaska was paying oil
companies the highest per barrel profit in the world. He
believed the state should be receiving more for its oil. He
stated that revenues had decreased, but the price of oil
had only dropped 62 percent. He stated that production
revenues had dropped by 109 percent. In 2016 companies had
produced 8.4 billion barrels of oil. He stated that Alaska
had much less than it should receive. He supported
switching from net production tax to a gross tax with
adjustments for the lower cost legacy fields. He spoke to
auditing requirements that the legislature had not been
adequately funding. He spoke to confidentiality laws that
allowed oil companies to artificially influence tax in
their favor. He stated the current system was at the
expense of the state.
10:37:36 AM
~Jill Schaefer, Self, Kenai{ spoke against the legislation.
She shared that she is an assemblywoman in Kenai. She did
not believe the bill would increase investment or
production in Alaska. She heard from numerous people moving
out-of-state to make money to support their families. She
stated that more production would produce more money long-
term to bring in money to pay for programs. She emphasized
that the bill indicated to investors that Alaska was not a
stable environment - the investors would go elsewhere with
their money. She stressed that the state had the ability to
get out of recession, but the bill hindered the state's
ability to do that. She urged the committee to drop the
bill.
Co-Chair Seaton noted Ms. Schaefer had identified herself
as an assembly member. He asked if she was speaking as an
assembly member or herself.
Ms. Schaefer replied she was speaking on behalf of herself.
10:39:31 AM
~Regina Daniels, Self, Soldotna{ testified against the
legislation. She shared information about her business in
the private sector. She spoke to negative impacts on her
business. She stated that the bill would be detrimental to
exploration and would be a direct hit to the state's
private sector. She spoke to work directly related to oil
field that had enabled her company to maintain employees
throughout the winter. She asked the committee to think
about families that would be negatively impacted by the
legislation. She implored the committee to vote against the
bill.
10:41:25 AM
~Charles McKee, Self, Anchorage{ relayed that he would
provide written testimony as well. He shared that he would
provide information about the law and U.S. government. He
wondered if the federal government was supportive of the
people or corporations. He referred to U.S. code and Alaska
statute in relation to corporations. He believed there was
full scale deception. He spoke about underwriters in the
oil industry. He did not believe two minutes was sufficient
time to testify. He spoke about attempts to do away with
the Affordable Care Act. He spoke to draining the swamp.
10:45:08 AM
Co-Chair Foster provided the House Finance Committee email.
~Michelle Toohey, Self, Anchorage{ testified in opposition
to the bill. She did not support changing the tax structure
again and believed it was nonsensical. She believed the
changes in the bill would harm the industry bringing
revenue to the state's economy. She stated that the bill
would lead to fewer jobs, less production, less revenue to
the Permanent Fund, and lower state revenue over the long-
term. She stated more production was needed, which would
generate more revenue for the state. She opined that the
oil companies would take their business elsewhere. She
would hate to see her children move out of state because of
negative impacts the bill would have.
10:47:02 AM
~Jerry Walker, Self, Fairbanks{ spoke in strong opposition
to the bill. He believed the bill would reduce revenue to
the state over the long-term. He asked committee members to
consider the issue from the perspective of an investor. He
spoke to the instability of numerous changes in tax
structure over the years. He spoke to the items investors
should consider. He asked members if they would prefer to
invest in an adversarial climate. He discussed potential
job loss for Alaskans. He asked members to consider if a
legislative environment encouraging more private investment
in Alaska be good for current and future Alaskans. He
wanted an environment that supported long-term investment
in the state. He strongly encouraged the legislature to
focus on promoting a positive environment that invited
sustainable long-term investment.
10:49:46 AM
~Sarah Dunlap, Self, Juneau{ spoke in support of the
legislation. She was a small business owner. She believed
every Alaskan had to do their part to work to solve the
state's budget problem. She also supported a state income
tax because she cared about the state's future and wanted
to do their part. She shared that she had a mentally
disabled daughter who was also doing her part. She shared
that her daughter's Permanent Fund Dividend had been cut
and cuts had been made to her services. She supported the
bill because she believed oil and gas producers also needed
to do their part. She underscored that giving the state's
oil revenue away was not sustainable. She agreed that
changes should not keep being made to the oil tax
structure; however, she believed there would never be
stability until a fair tax was reached.
10:53:02 AM
~Jim Plaquet, Self, Fairbanks{ testified in opposition to
the bill. He believed the bill went too far and would hurt
investment in Alaska. He supported attracting investment in
Alaska. He stressed that Alaska could not increase
production by increasing taxes. He stated it was not
possible to tax away the industry's incentive to invest and
still expect to have a sustainable economy. He thought
legislature should be considering how much future
investment the state could attract to put more oil in the
pipeline.
10:54:31 AM
~Maynard Tapp, Self, Anchorage{ spoke against the bill. He
supported increased oil production. He shared that SB 21
had resulted in a decrease in production decline. He
thought the state should not spend more than it could
afford, but it had been doing so for years. He shared that
he worked for a small company that had lost jobs in the oil
industry. He thought the item should be taken off the
table.
10:56:12 AM
~Stephen Taufen, Self, Kodiak{ supported the bill, but took
issue with the $1 on $10. He wanted to avoid the net
operating losses (NOLs) from spiraling down. He shared
information about his employment history in Alaska. He
referred to testimony given by Randall Hoffbeck,
Commissioner, Department of Revenue who had mentioned the
resource curse in the past. He countered that the
commissioner had not mentioned that it was what economists
called the paradox of plenty. He elaborated it was a
situation where states with bountiful natural resources
fail to develop vibrant middle class economies with many
jobs. He stated it was due largely to the combined efforts
of resource exploitation, multi-national corporations, and
politicians the companies corrupted. He believed the
legislature was responsible for allowing the situation to
occur in Alaska. He referred to economic terrorism. He
would prefer to recognize that Iraq and other nations do
cost-plus recovery - Iraq's government take was about 98
percent. He believed the state needed to establish a
rational wealth retention. He did not support subsidies. He
supported the establishment of a resource economic
sovereignty commission to fight the unregulated economic
wealth bleeding.
10:59:08 AM
~Pat Holmes, Self, Kodiak{ spoke in support of the
legislation. He spoke to tremendous cuts to state services.
He remarked that most people who had moved back to places
like Texas and Oklahoma had benefitted directly. He shared
that he had worked in Cook Inlet in the past. He believed
HB 247 had been a good start the previous year, he believed
the current bill could be more severe. He did not support
cash subsidies to the oil industry. He thought the state
may need to be more restrictive. He believed they should
focusing on going towards credits for growth production. He
believed the bill represented a good start. He lauded the
committee for working on the issue.
11:01:40 AM
~Mike Milligan, Self, Kodiak{ spoke in support of the
legislation. He thought the issue was whether the state
would monetize NOLs. In other words, he wondered if the
state was going to hand out cash to people taking risk on
the North Slope. He stated it was possible for a company to
get paid by the state for developing a technology, but not
use it in Alaska. He supported leveling the playing field
and encouraging development, but he emphasized that He
stated that 65 to 70 percent of worldwide oil production
came from a state-owned facility (e.g. Norway and Saudi
Arabia). He stated that oil companies were not leasing in
those locations and were working as hired hands. He thought
that if the state was going to monetize NOLs and pay to
develop technology, it should just have a state-owned oil
field. He believed there should be production-based credits
and that the monetization of NOLs should be taken off the
table. He believed if the price of oil was low people would
leave. He cautioned that the lessening of environmental
regulations in the state would have a profound effect on
Alaska. He thanked the committee for its work.
11:04:48 AM
~Bob Stinson, Self, Anchorage{ testified in opposition to
the bill as it was currently written because it would be
detrimental to the state's economy. He shared information
about his professional background. He believed the bill was
in response to solving the state's budget gap and not in
response to fixing a problem with the tax structure. He
addressed declining production and inclining oil prices in
past years. He stressed that Alaska's budget should be
based on providing a reasonable and predictable level of
services for residents regardless of the fluctuation of oil
prices. He believed the bill represented a lack in
foresight in managing government spending. He always
thought oil prices and production would save the day in
Alaska, but that was no longer the case. He did not support
to putting more taxes on the industry in response to the
state's budgetary problems.
11:08:02 AM
~Lynn Johnson, Self, Anchorage{ spoke against the
legislation. He thanked the committee for hearing the
testimony. He shared information about his business. He
spoke to current slowdown in the economy that had caused
his business to operate fewer hours per week. He stated
that the bill was flawed because it reduced investment. He
specified that in the oil price range of $50 to $70 per
barrel, the change would increase oil taxes between $60
million and $95 million per year. He stressed the
importance of encouraging additional investment in
facilities and infrastructure to prolong oil field life and
facilitate exploration. He discussed various times the tax
structure had been changed in the state. He believed the
bill was a bad investment decision for the state.
11:10:44 AM
~Karl Gohlke, Mechanical Contractors of Fairbanks,
Fairbanks{ testified in opposition to the bill. He shared
information about the company. He believed the bill would
decrease the competiveness of Alaska's projects and would
rob the companies of investment capital required to expand
existing fields and discover new ones. He stated increasing
taxes on the industry would do more harm to the state's
economy in the long-term. More investment meant more
production, more revenue for the state, and more jobs for
Alaskans. The current tax system was balanced. At current
prices Alaska's oil tax policy brought in more to the state
than would have come in under the prior system. The new
2017 tax change represents the seventh tax credit system if
adopted. He was concerned with investments ceasing due to
the proposed tax policy. Alaska could not increase
production by increasing taxes.
11:13:42 AM
~Marissa Sharrah, Fairbanks Chamber of Commerce, Fairbanks{
spoke against HB 111. She asserted that the proposed tax
system would lead to increased burdens to oil companies and
would discourage investments in Alaska. The chamber was
opposed to the bill that would bring the fifth tax increase
to industry in ten years. She spoke to the difficult
environment in Alaska for the oil industry. She added that
the industry was still grappling with a downturn due to
lower prices and production. She stated it is the fiduciary
responsibility of the producers to look after their
shareholders. She stated that increased production was the
number one way to increase benefits to Alaska. She noted
the potential direct and indirect job losses the bill would
cause.
11:15:56 AM
Representative Wilson asked if Ms. Sharrah was testifying
on behalf of the Fairbank Chamber or herself. Ms. Sharrah
stated "both."
11:16:19 AM
~David Otness, Self, Cordova{ spoke in favor of HB 111. He
thought it was interesting that the oil industry had been
espousing doom and gloom and stating that companies would
all leave the state. He stated that the statements had been
used for SB 21 and HB 110 three years earlier. He referred
to testimony about increased investment after the passage
of SB 21 - he countered that the investment had been
planned prior to the passage of the bill. He referred to
modifications that could have been made that would still
bring in revenue from royalty fields. He mentioned supply
and demand. He thought the oil companies were experts in
the industry and were aware that there would be a downtown.
He asserted the oil companies knew the downturn was coming
which is why the industry pressed to get the legislation
passed. He was tired of hearing that the oil industry was
the only thing happening in the state. He believe reducing
the Permanent Fund Dividend was far worse for the state.
11:19:47 AM
~Mike Sallee, Self, Ketchikan{ spoke in favor of HB 111. He
disputed claims that climate change was a hoax. He
emphasized the impacts resource extraction had on the
environment. He thought the major driver of the Alaskan
economy was oil, but diversification was necessary. He
stated that not everyone in Alaska agreed that more oil
needed to go through the pipeline. He agreed with the
elimination of NOLs. He opined that the oil industry should
be audited to clearly show where Alaskan oil revenues were
going. He wanted to know if the state was being paid fairly
for its oil, but the information was not forthcoming. He
disagreed with the gloom and doom picture provided by the
oil companies. He used Ketchikan as an example and
explained that the community had not died when the pulp
company had left.
11:23:21 AM
~Roberta Highland, Self, Homer{ strongly supported HB 111.
She discussed that for over 40 years Alaska had depended
almost exclusively on the volatile fossil fuel industry and
had not seriously diversified. She thought that was crazy.
She thought oil would end and that the state needed to get
its fair share. She referred to the Valdez oil spill that
had taken place 28 years earlier. She referenced an article
by Robin Brena that explained the situation. The article
stated that the oil industry owed Alaska $35 billion since
1978. She emphasized that climate change, ocean
acidification, and sea level rise were all real. She
continued that the environment had not recovered from the
Valdez oil spill and there was currently a gas leak under
Cook Inlet. She spoke to companies that had been operating
unsafely. She urged support for HB 111. She encouraged
members to make plans for Alaska's future.
11:25:43 AM
~David Scott, Self, Auke Bay{ spoke in support of HB 111.
He mentioned he had spent 30 years in the oil industry. He
thought the bill did not go far enough in terms of taxing
producers. He believed the large producers should pay their
share. He was thankful for the testimony of others.
11:27:03 AM
~Teddy Babcock, Self, Fairbanks{ testified in opposition to
the bill. He shared that he was currently a University of
Alaska - Fairbanks mechanical engineering student. He spoke
to the negative job outlook for the future. He thought the
comparison of Alaska to Iraq was disingenuous. He stressed
that it was unwise to believe just because the oil industry
had continued to operate in Alaska that it would always be
here regardless of the conditions. He relayed that Alaska
was unique because it was 90 percent dependent on oil
revenues. He stressed that if the oil industry left it
would mean the end of the state.
11:29:17 AM
~Anne Doerpinghaus, Self, Fairbanks{ spoke in favor of HB
111. She was in support of a sustainable, balanced budget
that was not centered only on fossil fuels. She stressed
that renewable energy was rapidly becoming cheaper,
cleaner, and preferred. She was also willing to pay an
income tax or sales tax and giving up a portion of her PFD
as long as the oil companies also paid their share. She
spoke to environmental issues facing the state including
the melting of permafrost, erosion of coastlines, and
other. She emphasized the importance of taking a long-range
view for the health and economic wellbeing of the state's
future generations. She encouraged members to think about
the future of the state. She supported more revenue
diversification.
11:31:01 AM
~Joan Franz, Self, Fairbanks{ spoke in support of HB 111.
Shared information about her professional and personal
background in Alaska. She was in favor of replacing SB 21,
which she believed was a complex oil tax written by and for
the big three oil companies. She detailed that Fairbanks
had understood that and had voted it down. She stated that
HB 111 supported oil exploration but required oil companies
to begin paying a more fair tax. She stated that Alaska oil
continued to be the bread and butter of the big three oil
companies. She thought it the legislation moved towards a
more equitable structure. She added that she also supported
an income tax to help balance the budget.
11:32:21 AM
~Jaremiah Emmerson, Self, Homer{ spoke in support of HB
111. He noted he was not certain the bill went far enough.
He compared the situation that had occurred when banks had
to be bailed out by the people. He stressed that it was not
possible to protect the Permanent Fund Dividend if the
state was not receiving its fair share of taxes. He
believed the first step was passing HB 111. He underscored
that there were more industries in Alaska besides just the
oil industry. He was happy to pay his fair share if the big
oil companies also paid their fair share. He thought the
state was being fair and the bill was highly generous
because companies would still receive credits. He fully
supported the legislation and gave kudos to the House
Majority coalition.
11:34:57 AM
~Kate Blair, Government and Public Affairs Manager, Tesoro
Corporation, Anchorage{ opposed HB 111. She shared
information about the company. She spoke to the jobs the
company brought to Alaska. She relayed that the company did
not pay production tax in Alaska. She emphasized that in-
state oil production mattered; any loss of production would
affect the in-state refinery and would potentially make the
company's economics more challenging. She spoke to the
declining production in Cook Inlet. She discussed that the
company had signed a royalty oil contract with the state
that allowed it to purchase oil with a benefit to Alaska of
$45 million to $56 million. She spoke to increased
investment since the passage of SB 21 that had resulted in
stable, local supply for the majority of the company's
crude. Declining production would result in the Kenai
refinery importing more crude to meet the market demands.
She continued that coupled with extremely high energy costs
importing could make local refining less economical. She
stated that it could ultimately impact the stable local
supply of transportation fuels in Alaska. She asked the
committee to consider how modifications would impact
production and in-state manufacturing.
11:38:56 AM
~Rebecca Logan, General Manager, Alaska Support Industry
Alliance, Anchorage{ opposed HB 111. She provided detail
about the alliance that represented Alaskans. She reported
that the member companies of the Alliance employed 30,000
Alaskans. She noted that producing companies had never been
members of the organization. She specified that since 2015
the member companies had laid off 3,000 people, which had
resulted in $400 million in payroll being taken out of the
Alaskan economy. She emphasized the need for more oil
production, which would lead to more revenue and more jobs.
The bill would not provide those things. She asked the
House Majority to stop attacking Alaskans - via social
media - who had turned out to testify during the current
meeting.
11:40:31 AM
~Keith Silver, Self, Anchorage{ spoke in opposition of HB
111. He did not work for an oil company or service company.
He discussed that resource development was costly in Alaska
due to weather conditions and lack of affordable access. He
stressed that the fiscal policy needed to be competitive,
fair, and consistent. He believed the bill failed the
consistency test because it changed the taxes for the
seventh time in 12 years. He explained that it also failed
the fairness and competitive tests. He spoke to the
importance of incentive credits. He mentioned the factors
companies had to consider in order to do business. He did
not think the proposed tax system was equitable and did not
think it provide incentive to the oil industry to do
business.
11:42:28 AM
~Cathy Duxbury, Self, Anchorage{ spoke in opposition of HB
111. She did not support continued discussions by the
legislature about how to increase taxes on an industry that
had brought Alaska a great economy over the years. She
relayed that increasing oil taxes year after year made the
economy unstable. She spoke of the employee reductions in
the office she worked in. She did not believe the state had
made enough reductions to the budget. She discussed that
Alaska residents were not spending money in the economy out
of fear they would not have money in the future. She
thought the legislature should focus on incentivising the
industry to attract investment and more oil in the
pipeline.
11:44:33 AM
~David Morgan, Self, Anchorage{spoke in opposition of HB
111. He reported being in Alaska since 1982 - he spoke to
his background as an economist. He spoke of an article that
he would forward to committee members from Bloomberg News
related to the disaster related to resource development and
the tax policy in Alaska. He thought what would be decided
by the legislature would have titanic effects on the state
in terms of whether there would be responsible development,
a viable budget, and a growing economy. He stressed that
oil had funded the state's schools, roads, airports, etc.
He suggested that Alaska needed to look at the cost of
producing oil. He discussed declining oil production. He
relayed that the cost of infrastructure was more than the
revenues to the industry. He reported that Alaska was not a
good investment at present.
11:48:22 AM
~J.R. Wilcox, Chair, Anchorage Chamber of Commerce,
Anchorage{ spoke in opposition of HB 111. He provided
detail about the organization. He did not appreciate the
characterization that all testifiers opposed to the bill
were somehow related to the oil industry. The chamber spent
its energies promoting the economic prosperity of
Anchorage. He read a quote from Winston Churchill. He
thought the legislation did not promote oil investment in
the state. He stated that changing the oil tax system made
the oil industry less competitive in the past. A stable tax
environment would provide additional stability in Alaska's
economy. He suggested that reducing revenues would reduce
investment.
11:51:47 AM
~Renee Limoge Reeve, Self, Anchorage{ opposed HB 111. She
was offended when people did not give credit to the oil
industry for its contribution to Alaska's economy. She
stressed that the state had received billions in revenue, a
healthy economy for decades, and jobs. She asked the
committee to avoid taking a short-sighted approach to tax
policy. She encouraged a long-term approach that supported
investment and production. She implored legislators not to
pass the legislation under consideration.
11:53:11 AM
~Marleanna Hall, Executive Director, Resource Development
Council, Anchorage{ spoke against HB 111. She provided
detail about the organization. The organization believed
the best approach to expand the state's economy was to
produce more oil, attract more tourists, harvest more fish
and timber, and mine more minerals. She suggested that
increasing taxes on the oil industry during a period of low
oil prices would not encourage investment and would be
damaging to the economy and the private sector. She thought
production decline rates would go up. She encouraged
growing more wealth. Her members were not asking for a tax
decrease but urged members to do no harm by opposing the
legislation.
11:55:53 AM
~Marcus Sanders, Self, Anchorage{ strongly opposed HB 111.
He stated that the oil industry had funded almost 90
percent of Alaska's government since the pipeline had been
built. The oil industry provided at least 55 percent of the
state's income at present. The industry helped to fund
schools, roads, public safety, airports, and charities. He
stressed that the industry had provided the luxury of not
having to pay a state income or sales tax. He thanked
committee members for their time.
11:57:26 AM
~Michael Jesperson, Self, Anchorage{ spoke in opposition of
HB 111. He shared that he had never worked for an oil
company or for a company dependent on the industry. He
thought changing the tax system for the seventh time was
not a smart idea. He thought the legislation would result
in less production and would be detrimental to jobs. He
urged members to stop raising taxes and changing the
system. He emphasized that the best way to help the state
was to increase the number of jobs. He thanked the
committee.
11:59:09 AM
~Dawn Patience, Self, Anchorage{ urged members to oppose HB
111. She wanted members to look beyond the election cycle
and protect Alaska's future.
11:59:58 AM
~William Harrington, Self, Anchorage{ opposed HB 111. He
referred to modeling done by the state and called it
speculation. He stated that Alaska had 250 to 500 years of
oil activity remaining. He spoke to other sovereign wealth
funds including Norway. He stressed that the proposed
investment policy in Alaska did not favor the home team. He
noted having waited 3.5 hours to testify on the income tax
bill. He spoke to his dissatisfaction with the public
testimony process.
12:02:22 PM
~Jim Hill, Self, Anchorage{ opposed HB 111. He stated that
the bill would not do anything to solve the state's current
financial situation, it did not promote jobs in the private
sector, and did not encourage further investment in the
state. He shared that he worked with a forklift business
working with many transportation, warehousing business in
the state. He had seen the effects of the state's uncertain
tax policy first hand. He supported letting SB 21 continue
to work. He thought the legislation would not help the
state in its current fiscal situation. He worked for a
transportation company and had seen jobs lost. He thought
Alaska's answer was additional oil. He thanked the
committee.
12:03:44 PM
~Ross Bieling, Self, Anchorage{ spoke against HB 111. He
thought the state had lost its credibility because of not
paying the oil tax credits to its creditors. He urged
paying credit money owed to oil companies such as Caelus.
He shared a conversation he had had with a former BP
executive. He stated that the oil companies chose to be in
Alaska and could leave. He spoke to wells that had been
shut down and about employee layoffs in the industry. He
thought the state should be more careful with the policy it
was creating. He thanked the committee.
12:05:52 PM
~Jesse Thacker, All Pro Toyota Alaska, Anchorage{ spoke in
opposition of HB 111. He shared information about his
business. He reported the majority of his customers were
involved in the oil industry. He thought the state economy
was in sad shape. He stated that when the business
environment in Alaska had changed, the state municipalities
had refused to change their spending habits. He encouraged
the legislature to be a good business partner and to stop
changing the tax policy. He stated that increase in volume
would mean to more profit and jobs and other benefits.
12:08:08 PM
~Paul Kendall, Self, Anchorage{ had no position on the
bill. He recommended radio broadcasting of public
testimony. He mentioned needing a disclosure of secrets. He
proposed members leaving Juneau and advocated moving into
the BP building.
Co-Chair Seaton asked Mr. Kendall to submit the remainder
of his testimony in writing.
12:12:28 PM
~Kay Schuster, Self, Anchorage{ opposed HB 111. She shared
that she was a small business owner specializing in hunting
and fishing. She stated that it had been many years since
Alaska had the opportunity for more oil production. With an
increase in production the oil companies would renew their
great financial support in the state's public schools
through their business partnerships. Additionally, jobs
would be maintained and people would stay in Alaska. She
provided examples of the benefits of the oil industry in
Alaska. She thanked the committee.
12:13:25 PM
~Michael Mason, Self, Anchorage{ spoke in favor of HB 111.
He believed the legislature had sold the state out to the
oil companies for many years. He did not think the bill
went far enough. He stressed that oil would not leave the
state. He continued that oil companies made investment
decisions based on global price fluctuations, which had
nothing to do with Alaska's tax structure. He noted that
Norway was a great comparison to Alaska - Norway's
sovereign wealth fund was about $900 billion. He stated it
was what Alaska's Permanent Fund should be if the state had
not allowed itself to be robbed by oil companies over the
years. He thanked the committee for its time.
12:14:27 PM
~Michele Vasquez, Self, Soldotna{ supported HB 111. She had
fought hard to repeal SB 21. She believed it was important
to reform the oil tax credits in the name of fairness to
Alaska and its citizens. It was not fair to ask Alaskans to
pay income tax and give up PFDs while paying oil companies
millions of dollars. The bill would reduce the state's
liabilities during the current fiscal crisis. She would be
submitting an article by Dermot Cole to members. She fully
supported the legislation.
12:15:50 PM
~James Lounsbury, Self, Fairbanks{ opposed HB 111. He had
spent half of his life in Alaska before the pipeline and
then after the pipeline. He recalled that before the
pipeline businesses had shut down in the winter months, but
after the pipeline had been built businesses had remained
open year-round. He spoke of all of the benefits resulting
from the pipeline and encouraged members to vote against HB
111. He did not want to see the state's resources get
squeezed out.
12:16:58 PM
~Andy Durny, Self, Fairbanks{ strongly supported HB 111. He
provided some of his background. He disputed the claim that
the primary reason for the decline in oil production was
the tax structure. He understood the state depended on oil
revenue, but the oil revenue was derived from the state's
resources. He stressed that even though the state received
most of its money from the oil industry, the oil industry
was a for-profit industry that made billions of dollars. He
believed the bill was fair to the oil industry and was even
fairer to the people of Alaska. He indicated that the
state's resources belonged to the people of Alaska. He
referred to comments about the numerous changes to the tax
structure over the years and explained that the changes had
resulted because the legislature had never gotten the
structure right. He thought the legislation was a step in
the right direction.
12:18:43 PM
~Lynette Clark, Self, Fairbanks{ spoke in opposition to HB
111. She reminded members of the obligation of their oath
of office. She thought the legislation was a detriment to
all of Alaska and constituted a knee-jerk reaction to SB
21. She did not believe the state had a fiscal plan and HB
111 should not be addressed until it is obvious whether SB
21 was working. Alaskans had a long memory.
12:21:38 PM
~Ryan McKee, Americans for Prosperity, Wasilla{ opposed HB
111. He stated that targeting resource development was not
the answer to the state's fiscal problem. He thought that
some people believed the state was not getting its fair
share of oil revenue if oil companies were profiting. He
thought the legislation meant that Alaska was not open for
business. He stated that oil companies were currently
feeling the pain of low oil prices. He asserted that Alaska
was in a recession. Any additional taxes on the industry
would be a disincentive to the oil industry. He urged
members to oppose HB 111.
12:23:21 PM
~Ann Rappoport, Self, Anchorage{ spoke in favor of HB 111.
She did not believe further cuts were the answer. She had
been saddened in the last several years as past
legislatures had unsuccessfully struggled with balancing
the state's budget. She thought additional cuts would be
detrimental to state services and education system. She
underscored that the solution to a balanced budget needed
to include a balanced mix of tax reform and new tax
revenues. She favored an income tax. She noted oil was a
finite resource. She spoke to harmful effects on the
environment. She recommended diversifying the economy. Oil
tax reform was necessary. She specifically encouraged the
elimination of the carried forward annual loss credit to
reduce future fiscal liability to the state, to harden the
tax floor, to increase the minimum tax from 4 to 5 percent,
and several others.
12:25:59 PM
~Peter Mjos, Self, Anchorage{ spoke in favor of the
legislation. He emphasized that the health and wellbeing of
Alaskans was reliant on a stable fiscal policy. He did not
fully understand the intricacies and nuances of Alaskan oil
tax policy, but he understood that the oil belonged to the
state. The Alaska Constitution stated that the resources
must be used for the maximum benefits of the state's
citizens. He stated that at low oil prices of $40 per
barrel, ConocoPhillips had earned $250 million in profits
in Alaska in 2016. The company had lost money on
investments elsewhere at the same time. He believed the
industry would remain in Alaska until the last drop of oil
was extracted. He fully supported the efforts of the bill.
12:28:24 PM
~Andrew Lessig, Self, Anchorage{ testified against the
bill. He had previously been in support of repealing SB 21.
He stated that under SB 21 oil production had increased and
the bill should remain law. Oil prices had declined, but
production had increased. He hoped the price of oil and
production would continue to increase. He stated that long-
term production was increasing. He was opposed to changing
the tax structure system again.
12:30:44 PM
~Curtis Thayer, President, Alaska Chamber of Commerce,
Anchorage{ spoke in opposition to the legislation on behalf
of the Alaska Chamber of Commerce. He stated that the bill
constituted the sixth time the state had changed its oil
tax policy. He underscored that the previous change had
been nine months back; the effects of HB 247 had not even
been witnessed. He believed Alaska was not keeping up with
investments across the world. He spoke in support of SB 21
and believed it was the time to maintain a stable tax
policy. He referred to numerous oil companies investing in
Alaska. He supported letting the oil flow through the
pipeline.
12:32:46 PM
~Jeremy Price, Director, Americans for Prosperity,
Anchorage{ testified against the bill. He addressed the
Permanent Fund Dividend and the various opinions about it.
He believed maintaining robust oil production was
important. He spoke about legislation that would increase
throughput in the Trans-Alaska Pipeline System (TAPS). He
stated that "greenies" testifying throughout the state did
not like the fact that Alaska was a resource state. He
encouraged the legislature to pass legislation that
encouraged more oil production.
12:35:26 PM
~Jeannie Pierce, Self, Kasilof{ was in favor of the bill.
She believed the current tax policy represented a giveaway
in revenue. She spoke to a loss in jobs throughout the
state. She shared that the oil industry paying a 10 percent
tax received a 35 percent deduction. She discussed that
North Dakota was looked to for guidance; however, it would
take 20 oil companies to reach a percentage of total
production compared to 3 companies. She believed the bill
was a beginning. She stated that SB 21 had been about
creating more jobs, but jobs had been lost. She referred to
testimony by BP that jobs would be automated. She reminded
the committee that the Chamber received many donations from
the oil companies for lobbying.
12:40:15 PM
~Laura Demaray, Self, Matsu{ testified against the
legislation. She shared that she worked as a nurse for
patients with disabilities and was also a small business
owner. She believed that with a low TAPS flow rate and low
oil prices, it was counterintuitive to change the tax
structure. She stated the bill would impact private sector
jobs. She stated that in her business if she changed prices
repeatedly it would make her seem very untrustworthy and
incompetent. She noted that the oil and gas private sector
had been faced with firing about 8,000 families. She stated
that continuing to change the tax system would have a
negative impact. She stressed that Alaska had a spending
problem, not an income problem. She stated that one of the
most egregious aspects of the bill was bringing another
level of regulation on oil and gas expenditures in a DNR
process. She thanked the committee for its time.
12:44:40 PM
~Ceal Smith, Alaska Climate Caucus, Eagle River{ testified
in support of the legislation. She urged committee members
to vote yes on the legislation, but she did not believe the
bill went far enough. She believed Alaska had a revenue
crisis, not a budget crisis. She spoke to the profits
brought in by oil companies in a given year. She did not
believe Alaska was receiving its fair share from industry.
She thought the state needed to be doing better. She
supported a gross tax on profits rather than a net tax. She
believed it was time for the industry to pay its fair
share.
12:49:37 PM
~Edward Witbeck, Self, Kenai{ spoke against portions of the
legislation, but in support of a change to the oil tax
system. He believed the oil industry was lying to the
state. He believed certain legislators working with the oil
industry should not be in office. He asked the committee to
maintain parts of the legislation, but discard others. He
stressed that if the companies did not like it they could
leave and the leases could be resold.
12:53:00 PM
~Robert Archibald, Self, Homer{ testified in support of the
bill. He discussed that the state's budget fluctuated like
the price of oil. He stated that the price of maintaining
the state's economy was increasing. He spoke to raising
taxes including sales and income taxes. He thought oil
companies should pay their share too. He added that he had
noticed many nonresidents coming to Alaska to work on the
North Slope or in Cook Inlet - he would like to see the
individuals pay an income tax.
12:55:14 PM
~Judy Patrick, Self, Wasilla{ strongly opposed the
legislation. She believed it was very detrimental to the
state to continue to change tax policy. She stressed that
HB 111 was job killing legislation. She believed the
legislature should be doing everything possible to
encourage oil production to increase the number of jobs for
state residents.
12:56:18 PM
~Dan Graham, Self, Mat-Su{ testified against the bill. He
spoke to a decline in production in the past that had been
buffered by high oil prices. He discussed that there had
been an increase in oil production after the passage of SB
21. He explained that for incentives to result in new
production in the pipeline took up to ten years. He did not
believe it was currently time to change the tax structure.
He supported leaving the existing tax structure in place.
12:57:51 PM
~Garvan Bucaria, Self, Wasilla{ spoke in opposition to the
bill. He had been involved in the petroleum industry as a
seismic observer and other. He believed the state's oil
benefitted no one if it continued to remain underground. He
believed the state should continue to stimulate the
petroleum industry, incentivize production, and encourage
the discovery of new fields. He referred to testimony that
majors may benefit even when oil prices were low because
they continued to benefit through their corporate
structure. He believed the loophole needed correction. He
believed the problem was that Governor Walker had failed to
pay credits the state owed to oil companies. He stressed
that liquid natural gas was cheaper elsewhere and was not a
source in Alaska at present.
1:00:09 PM
~Pamela Brodie, Self, Homer{ testified in favor of the
legislation. She believed it was essential for Alaska to
receive its fair share from the oil industry. She had been
impressed by writings by Robin Brena and the late Governor
Jay Hammond. She noted the agreement with the industry long
ago had been the state, the federal government, and the oil
industry would each receive one-third. She stated that at
present the state and federal government were receiving
less and the oil industry receive more. She pointed to a
recent article by Robin Brena stating there were only three
sources of revenues to close the state's deficit - through
oil industry taxes, taxes on the people, and use of the
PFD. She stated that very little of the money going to the
oil industry was spent in Alaska. She emphasized that the
second and third option would have a much worse impact on
the state's economy. She stressed if money was taken away
from Alaskans it would hurt the economy. She spoke against
failing to inflation proof the Permanent Fund.
1:03:04 PM
~Sydney Deering, UAF Petroleum Engineering Student,
Fairbanks{ testified in opposition to the legislation. She
stated the bill would harm the economic and development
climate in Alaska; it would also decrease the income of
energy companies. She believed that companies would leave
the state and it would make it difficult for her to get a
job in the industry. She referred to the brain drain in
Alaska. She wanted to work in Alaska. She spoke to
protecting the state's economic development. She asked the
committee to oppose the legislation.
1:05:37 PM
~Alyssa Dordan, UAF Petroleum Engineering Student,
Fairbanks{ spoke against the legislation. She stressed that
the bill represented the seventh major tax change in 12
years. She believed that continuing to impose limitations
through taxation on oil companies would only have a
negative impact on investment. She stated that less
investment would result in less production. She believed
the legislation would impact the state's economy
negatively. She explained that the situation would not help
jobs grow within the state; it would not encourage high
school or college graduates to remain in Alaska.
1:06:47 PM
~Adam Tiss, UAF Petroleum Engineering Student, Fairbanks{
was opposed to the bill. He wanted to stay in Alaska upon
graduation, but he thought it may not be possible if the
bill passed. He stated that the bill would decrease job
prospects for his graduating class. He reminded the
committee that students represented the future of Alaska.
1:07:25 PM
~Nathaniel Love, UAF Petroleum Engineering Student,
Fairbanks{ testified in opposition to the bill. He
recognized the state was having budget issues. He did not
want to see Alaska be a dead state due to its budget. He
detailed that the majority of the state's revenue currently
came from the oil industry. He believed it did not make
sense to kill the chicken that was laying the eggs. He
asked how the legislature would fix the deficit if the
petroleum industry left.
1:08:34 PM
~Sylvester Smith, UAF Petroleum Engineering Student,
Fairbanks{ spoke against the bill. He wanted to remain in
Alaska. He believed the state was a beautiful land of
opportunity thanks to the oil industry. He did not support
further taxation of oil companies. He stated that jobs in
the industry were increasingly difficult to come by due to
the falling price of oil. He opined that further taxation
of oil companies would ultimately harm the ability for
people to find jobs in the industry. The bill was not the
answer to Alaska's fiscal problems.
1:09:31 PM
~Cody Keith, UAF Petroleum Engineering Student, Fairbanks{
was opposed to the legislation. He characterized the
situation as a symbiotic relationship between the state and
the oil industry - the state had a resource, but did not
have the means to produce it. He stated that the industry
had the means to produce the resource and both the state
and industry could both make money if they worked together.
He spoke to the high costs of drilling wells in the state.
He believed increasing taxation on the oil industry would
have negative impacts on the state.
1:10:55 PM
~Merrick Pierce, Self, Fairbanks{ spoke in support of the
legislation, which he believed was a good start. He
stressed that the state's oil belonged to the state. At
current prices, $25 million to $26 million in oil was taken
per day and Alaska lost nearly all of that revenue under SB
21. He emphasized that the state's budget deficit could
never be fixed unless Alaska received a fair return for its
oil. He underscored that the state would never have the
ability to honor its long-term pension obligations without
a fair return for its oil. He discussed that Alaska was
headed for bankruptcy if things did not change. He was
concerned that a 5 percent floor was not nearly enough,
especially for legacy fields. He appreciated the effort to
reform the interest rate for past due taxes. He recalled
that when Hugh Malone had been the commissioner of DOR, the
department had worked to fix the interest on past due
taxes. He stated that SB 21 had made the system worse.
1:13:32 PM
~Deantha Crockett, Executive Director, Alaska Miners
Association, Big Lake{ spoke against the legislation. The
organization believed the state should first look at
spending cuts, then it should examine use of the Permanent
Fund earnings, and then broad-based taxes if necessary. She
stressed that the oil industry was already part of the
solution.
1:14:55 PM
~Moira Ignle, Self, Chugiak{ testified in support of the
bill. She believed that oil companies were doing just fine
financially and that Alaskans were not getting enough
benefits for their oil. She had read that the current rate
paid by oil companies was less than in other locations. She
believed the rate in the bill was a start, but that Alaska
could get a better deal for its oil. She emphasized that
oil was a finite resource. She encouraged planning for the
future and working to reduce the state's dependency on oil.
1:16:21 PM
~Kevin Durling, Self, Anchorage{ spoke in adamant
opposition to the bill. He supported the passage of SB 21
in the past. He spoke to a great increase in throughput in
TAPS. He addressed comments about the fair share. He
stressed that the state did not invest in production and
merely reaped the rewards. He spoke to new production
resulting from SB 21. He stated the legislature would be
responsible for leaving oil in the ground if taxes on the
industry were increased. He stated the oil industry had
historically paid over 90 percent of the state's budget.
1:18:45 PM
~Pete Burns, Self, Anchorage{ testified against the bill.
He stated that if his mortgage had changed seven times in
12 years he would probably not have a house. He shared that
he was not an oil industry advocate, but an advocate for
the state and its citizens. He referred to projects in the
Lower 48 and believed they would not make it easy for
Alaska to compete on a national or international level. He
stressed the state was not competing against the oil
companies, but against other states. He reasoned the state
could continue to fight the oil companies, but the oil
would remain in the ground. He believed there were other
ways the state could balance its budget.
1:20:28 PM
~John Shively, Self, Anchorage{ spoke in opposition to the
bill. He shared that he was a former commissioner for the
Department of Natural Resources. He spoke against the
provision requiring the Department of Natural Resources to
preapprove lease expenditures to be carried forward. He
believed it would create inefficiency and more work. He was
uncertain that the department had the capacity to handle
the additional work. He stated it was an extra step for the
industry and decisions could be appealed. He noted the
existing tax system had increased production and more
revenue than the previous system.
1:22:05 PM
~Stephen Grabacki, Self, Anchorage{ opposed the bill. He
urged the legislature to stop moving the goal post for the
industry. He stated that avoiding a tax increase would
continue to provide the financial incentive for exploration
and development. He stated the bill was a short-term
solution to a long-term problem.
1:23:05 PM
~Gene White, Self, Anchorage{ supported the legislation. He
believed it was one component to bring in more revenue for
the state.
Co-Chair Seaton noted no additional testifiers were signed
up. He recognized Representative Jonathan Kreiss-Tomkins in
the audience. He addressed the schedule for the following
week.
1:25:20 PM
AT EASE
1:47:01 PM
RECONVENED
Co-Chair Seaton indicated additional people were online.
1:47:18 PM
~Roselyn Cacy, Self, Anchorage{ supported HB 111. She
recalled when SB 21 was up for a vote and people being told
that they would lose their jobs. She noted that some people
had been supportive of the bill and had still lost their
jobs. She thought university students should be concerned
that the university would continue to operate, which she
believed may not happen if funding was continually reduced.
She appreciated the tax credits students could get for up
to $1,000 of refundable tax credits for going to school.
She stated that the refundable oil tax credits cost much
more than $1,000. She was concerned about companies
receiving the credits and then leaving Alaska. She thanked
the committee.
1:49:30 PM
~Joan Johnson, Self, Fairbanks{ spoke in opposition to HB
111. She reported her husband and two sons worked in the
Lower 48 in the oil industry. They would like to work in
Alaska but could not due to the instability of the oil
industry tax system in the state. She stressed that the
bill would constitute the seventh tax system change in the
past 12 years. She thought the bill was a big mistake and
would not encourage investment or result in jobs. She had
witnessed increased industry activity as a result of SB 21.
She thanked the committee for listening.
1:51:59 PM
~John Halford, UAF Petroleum Engineering Student,
Fairbanks{ spoke in opposition to HB 111. He was a chemist
and had moved to Alaska five years earlier. He could not
find employment so he decided to attend the university and
obtain his petroleum engineering degree. He stressed that
he would need a job after graduation. He understood that
some of the oil credits seemed to be a luxury the state
could no longer afford, but the credits would fund some of
the marginal projects, which would mean jobs. He understood
that the budget needed to be balanced, but he stressed that
individuals would need jobs to be contributing citizens. He
urged opposition to the bill.
1:53:51 PM
~Beth Fread, Self, Palmer{ opposed HB 111. She shared that
she had witnessed the positive results of SB 21. She worked
in the real estate business and recommended that the state
needed to be more business friendly. She did not support
continued changes to the tax system. She asked the state to
no longer attack business in the private sector. She
opposed the legislation.
1:55:53 PM
~Sharon Alden, Self, Fairbanks{ favored HB 111. She did not
believe Alaska could afford to subsidize the oil industry
any longer. She stated that being business friendly did not
mean paying the oil industry to take the oil. She stated
that the current system was not sustainable. She realized
that for many years the oil industry paid most of the
state's budget. She believed it was necessary to be
realistic about what type of oil tax structure would
benefit the state. She thought the oil industry needed to
be able to stand on its own.
1:58:08 PM
~Tom Patmor, Self, Clam Gulch{ recommended selling the
Dalton Highway to the Alaska Permanent Fund Corporation and
turning it into a toll road. He detailed it would give the
state an estimated $1 billion to $2 billion from the fund,
but it would not be draining the fund. He explained that as
oil and gas exploration continued east and west of Prudhoe
Bay, the fund would continue to make more money. He
furthered that it would be an addition to raising the oil
tax and would save money on road maintenance. He thanked
the committee.
1:59:35 PM
~David Parish, Self, Juneau{ spoke in support of HB 111. He
thought it was time for Alaska to receive 33 percent share
that former Governor Jay Hammond advocated. He spoke about
the current complex tax system. He did not think the oil
companies were reinvesting in Alaska. He referred to job
loss in the oil industry he had heard about. He suggested
that prior to taxing Alaskans and using their PFDs the oil
companies needed to pay their fair share.
2:01:42 PM
}Karla Hart, Self, Juneau{ spoke in favor of HB 111. She
thought the current tax structure needed to be replaced
with a simple structure. She supported a progressive gross
market tax. She spoke to the previous changes to the system
in Alaska's Clear and Equitable Share (ACES) and SB 21. She
supported a simple, transparent tax structure that did not
require the state to hire a multitude of accountants to
keep on top of the industry's accounting. She stated that
SB 21 had been completely driven by the oil industry. She
thought the oil industry's call for stability was
disingenuous because it had requested changes to the tax
structure over the years. She supported a stable, long-term
structure that benefited Alaskans. She urged members to
support the legislation.
Co-Chair Seaton appreciated everyone taking their Saturday
to listen and to testify. He relayed the agenda for the
following meeting on Monday, March 27, 2017 at 1:30 P.M.
HB 111 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
2:04:49 PM
The meeting was adjourned at 2:05 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 111 - Documents in Support - Public Testimony.pdf |
HFIN 3/25/2017 10:00:00 AM |
HB 111 |
| HB 111 - Documents in Opposition - Public Testimony.pdf |
HFIN 3/25/2017 10:00:00 AM |
HB 111 |
| HB 111 - Documents in Opposition (3).pdf |
HFIN 3/25/2017 10:00:00 AM |
HB 111 |
| HB 111 - Documents in Opposition (2) - Public Testimony.pdf |
HFIN 3/25/2017 10:00:00 AM |
HB 111 |
| HB 111 - Documents in Support (2) - Public Testimony.pdf |
HFIN 3/25/2017 10:00:00 AM |
HB 111 |