Legislature(2011 - 2012)HOUSE FINANCE 519

03/25/2011 03:00 PM FINANCE


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03:17:08 PM Start
03:17:51 PM HB110
07:02:15 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+= HB 110 PRODUCTION TAX ON OIL AND GAS TELECONFERENCED
Heard & Held
-- Public Testimony 3:00 - 7:00 pm --
(Contingent upon amount of testimony)
Statewide LIO's & Off-nets
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 25, 2011                                                                                            
                         3:17 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
3:17:08 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 3:17 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Co-Chair                                                                                        
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Reggie Joule                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mark Neuman                                                                                                      
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
John  Sonin,  Juneau;  Don   Smith,  Juneau;  Stuart  Cohen,                                                                    
Juneau.                                                                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Bob  Harrison,   Nikiski;  William  Warren,   Kenai;  Janice                                                                    
Chumley, Nikiski;  Crystal Nygard, MatSu  Business Alliance;                                                                    
Jean   Woods,  MatSu;   Phillip  Furbush,   MatSu;  Clarence                                                                    
Furbush, MatSu; Ray Tinjum, MatSu;  Jim Sykes, Palmer; Marty                                                                    
Metiva,  Self, MatSu;  Peter Mooney,  Port Alexander;  David                                                                    
Hopkinson,   Anchorage;  George   Smallwood,  Homer;   Katie                                                                    
Dawson, Homer;  Dave Bachrach, Homer; LuAnne  Nelson, Anchor                                                                    
Point;  Jim  Nelson,  Anchor   Point;  Mark  Mcarter,  Small                                                                    
Business  Owner,  Anchorage;   Ellston  Laubson,  Anchorage;                                                                    
Malcom Roberts,  Backbone III, Juneau; Lora  Reinhold, Eagle                                                                    
River;  Christopher  Stefanovich,  Anchorage;  Larry  Houle,                                                                    
Anchorage;  Will  Chinn,  Anchorage;  Eric  Reinhold,  Eagle                                                                    
River;  Edward King,  Fairbanks; Aaron  Lojewski, Fairbanks;                                                                    
Brian  Hove,  Fairbanks;  Ken   Larson,  North  Pole;  Linda                                                                    
Setterberg,  Fairbanks;   Bob  Hunter,  Eagle   River;  Evan                                                                    
Rowland,   Anchorage;  Lowell   Humphrey,  Anchorage;   Mary                                                                    
Pignalberi,  Anchorage;  Roger  Burns,  Fairbanks;  Hannibal                                                                    
Grubis,  Fairbanks; Roger  C.  Burggraf, Fairbanks;  Cynthia                                                                    
Henry,  Fairbanks;  Cheryl  Eluska, Anchorage;  Karl  James,                                                                    
Anchorage;  Kathy  Gray,  Anchorage; Mike  Macy,  Anchorage;                                                                    
John  Lawson,  Anchorage;  Andrea Veach,  Anchorage;  Thomas                                                                    
Higgins,  Anchorage;  Michael   O'Connor,  Anchorage;  Bruce                                                                    
Harland,  Anchorage; Kim  Griffith, Anchorage;  Joseph Scott                                                                    
Sr.,   Talketna;  Todd   Brown,   Anchorage;  Jimmy   Doyle,                                                                    
Anchorage; Dr.  Hugh Fate, Anchorage; Andy  Bond, Anchorage;                                                                    
Charlie  Powers,  Kodiak;  Jodie Dominguez,  Anchorage;  Ken                                                                    
Widmer, Matsu;  Rhonda Boyles,  Fairbanks; Mike  Prax, North                                                                    
Pole; Bart LeBon, Fairbanks;  Adela Jackson, Fairbanks; Jack                                                                    
Focose,  Kenai; Steven  McGroarty, Fairbanks;  Bill Johnson,                                                                    
Anchorage;  Ray Metcalfe,  Self;  Steven Borelle,  Executive                                                                    
Director,  Alaska  Miners  Association; Roy  Earnest,  Self;                                                                    
Darlene  Herbert, Self,  Fairbanks;  Blythe Campbell,  Self;                                                                    
Tom  Maloney,  Self;  Kelly Walters,  Self;  Deidre  Cronin,                                                                    
Self;  Janet Bounds,  Self; John  Shively, Self,  Anchorage;                                                                    
Hal  Gazaway,   Self,  Anchorage;  Barbara   Gazaway,  Self,                                                                    
Anchorage;  Paula  Easley,  Self,  Anchorage;  Ryan  Knight,                                                                    
Self,  Anchorage;  Mike  Sirofchuck, Self,  Kodiak;  Shannon                                                                    
Moore,  Self,   Anchorage;  Neil  Black,   Self,  Anchorage;                                                                    
Shannon  Moore, Self,  Anchorage;  Brian Newton,  President,                                                                    
Golden Valley Electric  Association, Fairbanks; Alan Batten,                                                                    
Fairbanks;  Tim  O'Donnell,  Self,  Juneau;  Bertram  Smith,                                                                    
Self,  Big Lake;  Patricia  Anderson,  Self, Anchorage;  Tom                                                                    
Hendrix, Self,  Palmer; Kathleen Harms, Self,  Mat-Su; Cheri                                                                    
Gillian, Self, Anchorage; Jack Crockett, Self, Anchorage.                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 110    PRODUCTION TAX ON OIL AND GAS                                                                                         
                                                                                                                                
          HB 110 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HOUSE BILL NO. 110                                                                                                            
                                                                                                                                
     "An  Act relating  to the  interest rate  applicable to                                                                    
     certain amounts due for fees,  taxes, and payments made                                                                    
     and property  delivered to  the Department  of Revenue;                                                                    
     relating  to  the  oil and  gas  production  tax  rate;                                                                    
     relating to  monthly installment payments  of estimated                                                                    
     oil and  gas production  tax; relating  to oil  and gas                                                                    
     production  tax   credits  for   certain  expenditures,                                                                    
     including  qualified capital  credits for  exploration,                                                                    
     development,   and   production;    relating   to   the                                                                    
     limitation  on assessment  of  oil  and gas  production                                                                    
     taxes;  relating to  the determination  of oil  and gas                                                                    
     production  tax values;  making conforming  amendments;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
3:17:51 PM                                                                                                                    
                                                                                                                                
PUBLIC TESTIMONY                                                                                                              
                                                                                                                                
BOB  HARRISON,   NIKISKI  (via  teleconference),   spoke  in                                                                    
support in HB 110.                                                                                                              
                                                                                                                                
WILLIAM   WARREN,   KENAI   (via   teleconference),   voiced                                                                    
opposition to HB  110. He called it a  give-away. He thought                                                                    
the oil companies  could tell the state was  worried. He had                                                                    
concerns about  the Trans Alaska Pipeline  System (TAPS) and                                                                    
wanted an all-Alaska  line built. He wanted the  state to do                                                                    
business   with   companies   interested   in   Alaska.   He                                                                    
recommended considering SB 85.                                                                                                  
                                                                                                                                
3:23:30 PM                                                                                                                    
                                                                                                                                
JANICE  CHUMLEY,  NIKISKI  (via  teleconference),  spoke  in                                                                    
opposition to  HB 110.  She believed  the oil  companies had                                                                    
enough  breaks,   and  that  there   was  no   guarantee  of                                                                    
additional  jobs. She  suggested giving  the extra  money to                                                                    
Alaskans or investing in sustained energy programs.                                                                             
                                                                                                                                
CRYSTAL    NYGARD,    MATSU     BUSINESS    ALLIANCE    (via                                                                    
teleconference), testified  in support of HB  110. She spoke                                                                    
for  a group  of  businesses in  support  of the  governor's                                                                    
proposal. She noted the decline  of exploration on the North                                                                    
Slope.  She  did  not  think  lawmakers  were  listening  to                                                                    
industry.                                                                                                                       
                                                                                                                                
3:27:56 PM                                                                                                                    
                                                                                                                                
JEAN WOODS,  MATSU (via teleconference), voiced  support for                                                                    
HB 110. She wanted Alaska to be "open for business."                                                                            
                                                                                                                                
PHILLIP  FURBUSH, MATSU  (via teleconference),  testified in                                                                    
opposition  to  HB  110.  He  did  not  think  there  was  a                                                                    
correlation  between state  support and  investment made  by                                                                    
oil companies. He was concerned  the income of companies was                                                                    
used  for  other purposes  such  as  oil-spill clean-up.  He                                                                    
recommended   diversifying  energy   sources  and   economic                                                                    
development in the state.                                                                                                       
                                                                                                                                
3:32:08 PM                                                                                                                    
                                                                                                                                
CLARENCE   FURBUSH,  MATSU   (via  teleconference),   voiced                                                                    
opposition to HB  110. He did not want to  give money to oil                                                                    
companies,  but  wanted  to invest  in  the  development  of                                                                    
alternative energy.                                                                                                             
                                                                                                                                
RAY  TINJUM, MATSU  (via teleconference),  spoke against  HB                                                                    
110.  He   thought  oil  companies  should   drill  and  the                                                                    
legislature should fill the  pipeline. He recommended giving                                                                    
financial  support  when  the  oil   got  to  the  pipe.  He                                                                    
recommended developing alternative energy.                                                                                      
                                                                                                                                
3:35:11 PM                                                                                                                    
                                                                                                                                
JIM SYKES, PALMER (via  teleconference), spoke in opposition                                                                    
to HB 110. He recalled  the Economic Limit Factor (ELF) tax,                                                                    
which  was opposed  by the  oil companies  at the  time, but                                                                    
when  it passed,  they went  on  with business.  He did  not                                                                    
think  the  problem  was  taxes,  but  price.  He  suggested                                                                    
splitting the  profit 50/50  between the  state and  the oil                                                                    
companies, after paying the federal government.                                                                                 
                                                                                                                                
3:39:15 PM                                                                                                                    
                                                                                                                                
MARTY  METIVA,  SELF,  MATSU  (via  teleconference),  voiced                                                                    
support for HB 110. He  was concerned that diminished supply                                                                    
of oil would diminish the quality of life in Alaska.                                                                            
                                                                                                                                
PETER   MOONEY,   PORT   ALEXANDER   (via   teleconference),                                                                    
testified  in opposition  to  HB 110.  He  thought it  would                                                                    
represent  a  give-away  of  state  money.  He  wanted  more                                                                    
refineries in the state.                                                                                                        
                                                                                                                                
DAVID  HOPKINSON, ANCHORAGE  (via teleconference),  spoke in                                                                    
support of HB 110. He thought  the measure would be good for                                                                    
business.                                                                                                                       
                                                                                                                                
3:44:11 PM                                                                                                                    
                                                                                                                                
GEORGE  SMALLWOOD,  HOMER  (via  teleconference),  spoke  in                                                                    
opposition to  HB 110. He  asked for consideration of  SB 85                                                                    
as a substitute.                                                                                                                
                                                                                                                                
KATIE DAWSON, HOMER  (via teleconference), stated opposition                                                                    
to HB  110. She  felt the oil  companies were  making enough                                                                    
money. She felt  that citizens were paying  for the clean-up                                                                    
and effects of oil. She  believed that giving roll-backs was                                                                    
unconstitutional. She was concerned  about having to give up                                                                    
the  permanent  fund  dividend   and  the  loss  of  federal                                                                    
funding. She noted that oil would  run out some day and felt                                                                    
oil companies  should be  part of  the solution  and support                                                                    
green jobs.                                                                                                                     
                                                                                                                                
3:48:39 PM                                                                                                                    
                                                                                                                                
DAVE  BACHRACH,  HOMER  (via teleconference),  testified  in                                                                    
opposition to  HB 110. He  quoted an article in  a petroleum                                                                    
journal. He thought Alaska Clear  and Equitable Share (ACES)                                                                    
was  working,  and that  Alaska  could  not afford  to  give                                                                    
additional  money.  He  recommending taking  the  money  and                                                                    
investing in Alaska  and in Alaskans jobs. He  did not think                                                                    
oil  companies would  abandon  Alaska with  the  oil at  the                                                                    
current high price.  He referred to testimony  by the Office                                                                    
of  Management and  Budget (OMB)  about an  increase in  oil                                                                    
exploration.                                                                                                                    
                                                                                                                                
3:52:09 PM                                                                                                                    
                                                                                                                                
LUANNE  NELSON, ANCHOR  POINT  (via teleconference),  voiced                                                                    
opposition to HB 110. She did  not think ACES was a problem,                                                                    
and believed there were provisions for exploration.                                                                             
                                                                                                                                
Representative  Gara provided  his phone  number to  get the                                                                    
information referred to by Mr. Bachrach.                                                                                        
                                                                                                                                
Co-Chair Thomas asked  that the information be  given to the                                                                    
whole committee.                                                                                                                
                                                                                                                                
JIM  NELSON,   ANCHOR  POINT  (via   teleconference),  spoke                                                                    
against HB  110. He  noted the  difficulties and  expense of                                                                    
building  a gasline.  He  thought the  money  that would  be                                                                    
given  away  to oil  companies  could  be  used to  build  a                                                                    
gasline  and support  infrastructure. He  referred to  those                                                                    
who were doing well because of ACES.                                                                                            
                                                                                                                                
3:56:30 PM                                                                                                                    
                                                                                                                                
MARK   MCARTER,  SMALL   BUSINESS   OWNER,  ANCHORAGE   (via                                                                    
teleconference), testified  against HB 110. He  did not want                                                                    
to give public money to the  oil companies. He did not think                                                                    
the state  budget could handle  the expense  without hurting                                                                    
the citizens. He  challenged the legislature to  start a new                                                                    
oil company owned by the  state, since the state was already                                                                    
involved in the oil business.                                                                                                   
                                                                                                                                
4:01:26 PM                                                                                                                    
                                                                                                                                
ELLSTON LAUBSON,  ANCHORAGE (via  teleconference), testified                                                                    
against HB 110.  He felt that reducing taxes  would make the                                                                    
Alaskan asset more attractive for leveraging.                                                                                   
                                                                                                                                
4:05:37 PM                                                                                                                    
                                                                                                                                
JOHN  SONIN, JUNEAU,  spoke  against HB  110.  He felt  that                                                                    
maximizing profit would not support human welfare.                                                                              
                                                                                                                                
4:07:02 PM                                                                                                                    
                                                                                                                                
MALCOM ROBERTS,  BACKBONE III, JUNEAU  (via teleconference),                                                                    
testified  against   HB  110.   He  stated   concerns  about                                                                    
situations around the  globe. He thought it was  too soon to                                                                    
make  the decision.  Backbone III  was  started by  Governor                                                                    
Hickel when BP merged with  Atlantic Richfield and wanted to                                                                    
include  ARCO,  which  would  have  resulted  in  a  company                                                                    
controlling 70 percent of Prudhoe  Bay and TAPS. He referred                                                                    
to history; Backbone III did  not support HB 110, and wanted                                                                    
to wait until there was more information.                                                                                       
                                                                                                                                
4:10:11 PM                                                                                                                    
                                                                                                                                
LORA REINHOLD,  EAGLE RIVER (via  teleconference), testified                                                                    
in support of HB 110.  She highly recommended a Commonwealth                                                                    
North  report,  "Alaska's   Oil  Investment  Tax  Structure:                                                                    
Establishing a  Competitive Alaska." She felt  that ACES was                                                                    
a  mistake,  and needed  to  be  corrected. She  wanted  her                                                                    
children to be able to be employed in Alaska.                                                                                   
                                                                                                                                
4:12:23 PM                                                                                                                    
                                                                                                                                
CHRISTOPHER  STEFANOVICH,  ANCHORAGE  (via  teleconference),                                                                    
spoke  against HB  110. He  provided  information about  the                                                                    
situation in North Africa;  the reason authoritarian regimes                                                                    
have  lasted because  of the  economic model  used. He  felt                                                                    
control  of natural  resources should  be  commonly held  by                                                                    
citizens.                                                                                                                       
                                                                                                                                
4:14:27 PM                                                                                                                    
                                                                                                                                
LARRY  HOULE,  ANCHORAGE   (via  teleconference),  spoke  in                                                                    
support of  HB 110.  He believed the  architectural business                                                                    
he worked for was successful  because of the oil industry in                                                                    
the   state  and   was  concerned   about  the   decline  in                                                                    
throughput.  He reported  employment  history, including  in                                                                    
the  oil  industry. He  wanted  to  incentivize oil  company                                                                    
investment in the state.                                                                                                        
                                                                                                                                
4:17:30 PM                                                                                                                    
                                                                                                                                
WILL  CHINN,   ANCHORAGE  (via  teleconference),   spoke  in                                                                    
support  of  HB  110.  He  felt  the  lack  of  North  Slope                                                                    
exploration and development was  a clear result of producers                                                                    
pushing  back against  current  high taxes  on  oil and  gas                                                                    
production,  which was  already  the most  expensive in  the                                                                    
world. He was concerned  about development outside of Alaska                                                                    
and blamed the high taxes. He urged quick action.                                                                               
                                                                                                                                
4:19:51 PM                                                                                                                    
                                                                                                                                
ERIC REINHOLD,  EAGLE RIVER  (via teleconference),  spoke in                                                                    
support  of  HB  110.  He reviewed  experience  in  the  oil                                                                    
industry.  He felt  that ACES  was inefficient  in terms  of                                                                    
promoting  oil development  and  uncompetitive. He  stressed                                                                    
that oil prices  were high, but oil production  was down. He                                                                    
believed  there  was  still  a  great  deal  of  development                                                                    
potential.                                                                                                                      
                                                                                                                                
4:23:43 PM                                                                                                                    
                                                                                                                                
EDWARD  KING,  FAIRBANKS   (via  teleconference),  spoke  in                                                                    
support  of HB  110. He  supported oil  companies developing                                                                    
the resource and believed the effort was cooperative.                                                                           
                                                                                                                                
4:24:37 PM                                                                                                                    
                                                                                                                                
AARON  LOJEWSKI, FAIRBANKS  (via teleconference),  testified                                                                    
in  support  of  HB  110.  He  believed  TAPS  was  Alaska's                                                                    
economic lifeline  and thought incentivizing  throughput was                                                                    
essential.                                                                                                                      
                                                                                                                                
4:25:12 PM                                                                                                                    
                                                                                                                                
BRIAN  HOVE, FAIRBANKS  (via  teleconference), testified  in                                                                    
support of HB 110. He  referred to a graph showing declining                                                                    
oil production. He believed  the legislation would encourage                                                                    
more exploration.                                                                                                               
                                                                                                                                
4:26:35 PM                                                                                                                    
                                                                                                                                
KEN LARSON,  NORTH POLE (via teleconference),  spoke against                                                                    
HB 110.  He stressed  that oil taxes  should remain  as they                                                                    
were. He felt big oil  companies were pushing their case and                                                                    
not  providing  any  assurance   to  the  state.  He  stated                                                                    
concerns about the high costs of fuel.                                                                                          
                                                                                                                                
4:30:23 PM                                                                                                                    
                                                                                                                                
LINDA SETTERBERG,  FAIRBANKS (via teleconference),  spoke in                                                                    
support of  HB 110.  She was concerned  about the  future of                                                                    
Alaska and the prospects of her family in the state.                                                                            
                                                                                                                                
4:32:09 PM                                                                                                                    
                                                                                                                                
BOB HUNTER,  EAGLE RIVER (via teleconference),  testified in                                                                    
support of  HB 110. He was  involved in the state's  oil and                                                                    
gas industry  as a geologist.  In 1989, TAPS  production was                                                                    
strong,  but  has  declined  significantly.  He  wanted  new                                                                    
exploration and development, which  could take many years to                                                                    
throughput.                                                                                                                     
                                                                                                                                
4:33:51 PM                                                                                                                    
                                                                                                                                
EVAN  ROWLAND,  ANCHORAGE  (via  teleconference),  spoke  in                                                                    
support of HB  110. He felt the problem had  to be addressed                                                                    
as soon as possible to get business moving again.                                                                               
                                                                                                                                
 4:34:27 PM                                                                                                                   
                                                                                                                                
LOWELL HUMPHREY,  ANCHORAGE (via  teleconference), testified                                                                    
in support  of HB  110. He  felt ACES  had put  his family's                                                                    
future at risk. He pointed  to other tax incentives that had                                                                    
worked in the state.                                                                                                            
                                                                                                                                
4:35:47 PM                                                                                                                    
                                                                                                                                
MARY  PIGNALBERI, ANCHORAGE  (via teleconference),  spoke in                                                                    
support of HB 110.                                                                                                              
                                                                                                                                
4:36:46 PM                                                                                                                    
                                                                                                                                
ROGER  BURNS,  FAIRBANKS   (via  teleconference),  testified                                                                    
against  HB 110.  He reported  experience working  for Shell                                                                    
Oil, which had  to shut down production. He  stressed that a                                                                    
corporation's  mission  was  to  maximize  profits  and  was                                                                    
concerns about giving them more money.                                                                                          
                                                                                                                                
4:38:55 PM                                                                                                                    
                                                                                                                                
HANNIBAL  GRUBIS,  FAIRBANKS   (via  teleconference),  spoke                                                                    
against HB  110. He did not  think the numbers added  up. He                                                                    
believed  the decision  was premature.  He felt  HB 110  was                                                                    
based on politics and not economics.                                                                                            
                                                                                                                                
4:41:07 PM                                                                                                                    
                                                                                                                                
ROGER   C.   BURGGRAF,   FAIRBANKS   (via   teleconference),                                                                    
testified in  support of HB  110. He thought ACES  needed to                                                                    
be reformed. He was concerned  that Alaska be competitive in                                                                    
the  world  market,  and   thought  incentives  were  needed                                                                    
because of the expense of operating in the state.                                                                               
                                                                                                                                
4:43:38 PM                                                                                                                    
                                                                                                                                
CYNTHIA  HENRY,  FAIRBANKS  (via teleconference),  spoke  in                                                                    
favor  of HB  110. She  spoke as  a business  owner and  was                                                                    
concerned about economic instability in the state.                                                                              
                                                                                                                                
4:46:55 PM                                                                                                                    
                                                                                                                                
CHERYL  ELUSKA,  ANCHORAGE  (via teleconference),  spoke  in                                                                    
support of  HB 110. She wanted  a future for her  family and                                                                    
friends.                                                                                                                        
                                                                                                                                
4:48:03 PM                                                                                                                    
                                                                                                                                
KARL  JAMES, ANCHORAGE  (via  teleconference), testified  in                                                                    
support  of HB  110. He  believed all  businesses wanted  to                                                                    
make  a   profit.  He  thought  lower   progressivity  would                                                                    
stimulate economic activity.                                                                                                    
                                                                                                                                
4:51:21 PM                                                                                                                    
                                                                                                                                
KATHY  GRAY,   ANCHORAGE  (via  teleconference),   spoke  in                                                                    
support  of  HB 110.  She  did  not feel  progressivity  was                                                                    
working and wanted ACES to be revamped as soon as possible.                                                                     
                                                                                                                                
4:53:03 PM                                                                                                                    
                                                                                                                                
MIKE   MACY,  ANCHORAGE   (via  teleconference),   testified                                                                    
against HB 110.  He felt the underlying  assumption that the                                                                    
give-away would encourage  exploration was wishful thinking.                                                                    
He  felt big  oil companies  preferred to  look for  big oil                                                                    
deposits  ("elephants") and  felt that  the companies  would                                                                    
spend the  $2 billion per  year outside the state.  He urged                                                                    
the legislature  to ask the Regulatory  Commission of Alaska                                                                    
to investigate  whether any of  the significant  decline was                                                                    
politically  motivated and  therefore artificial.  He listed                                                                    
reasons  why he  did  not  believe that  gas  was not  being                                                                    
developed in the state.                                                                                                         
                                                                                                                                
4:57:29 PM                                                                                                                    
                                                                                                                                
JOHN  LAWSON, ANCHORAGE  (via teleconference),  testified in                                                                    
support of  HB 110.  He stated  concerns about  the economic                                                                    
future of his children without enough throughput.                                                                               
                                                                                                                                
4:58:53 PM                                                                                                                    
                                                                                                                                
ANDREA VEACH,  ANCHORAGE (via teleconference),  testified in                                                                    
opposition to HB  110. She read from an  article by Citizens                                                                    
for Tax  Justice, "What Oil  and Gas Companies  Extract from                                                                    
the American Public." The article states that:                                                                                  
                                                                                                                                
     The evidence  indicates that  the public  receives very                                                                    
     little benefit  in return for  subsidizing oil  and gas                                                                    
     through the  tax code. People  associated with  the oil                                                                    
     and gas industry  often argue that the  tax breaks they                                                                    
     enjoy  encourage them  to locate  and extract  more oil                                                                    
     and gas, which allows them  to increase supply and thus                                                                    
     keep  energy prices  down below  the  level they  would                                                                    
     otherwise  reach.  But  among   the  largest  five  oil                                                                    
     companies,  less  than 10  percent  of  profit goes  to                                                                    
     exploration  for new  oil fields.  High profits  do not                                                                    
     encourage  exploration. In  fact, in  the top  five oil                                                                    
     companies, managers  direct most  of their  excess cash                                                                    
     to  dividends  and  stock repurchases,  both  of  which                                                                    
     drive   up  the   companies'  share   prices  and   the                                                                    
     executives' stock option values.  The percentage of net                                                                    
     profits   directed   towards    dividends   and   stock                                                                    
     repurchases  for  the top  five  oil  companies was  58                                                                    
     percent in 2005, 73 percent  in 2006, and 72 percent in                                                                    
     2007,  71 percent  in  2008, and  89  percent in  2009.                                                                    
     These  figures   are  high   in  comparison   to  other                                                                    
     industries. To the extent  that tax loopholes targeting                                                                    
     the oil and gas industry  boost their profits, there is                                                                    
     no  evidence  that  the  additional  profits  lead  the                                                                    
     companies  to explore  for more  oil so  that they  can                                                                    
     increase the supply.                                                                                                       
                                                                                                                                
Ms.  Veach believed  the assumption  that the  oil companies                                                                    
would so  what was  hoped for  in return  for the  tax break                                                                    
could be wrong.                                                                                                                 
                                                                                                                                
5:02:11 PM                                                                                                                    
                                                                                                                                
THOMAS  HIGGINS, ANCHORAGE  (via teleconference),  testified                                                                    
in opposition  to HB 110. He  did not think the  bill should                                                                    
be   compared  to   other   incentives   offered  to   other                                                                    
industries. He believed the film  and tourist industries did                                                                    
not  take Alaska  away  for profit,  but  brought people  to                                                                    
Alaska.  He  thought  the oil  companies  were  making  high                                                                    
profits   already  and   would  stay.   He  encouraged   gas                                                                    
development.                                                                                                                    
                                                                                                                                
5:06:16 PM                                                                                                                    
                                                                                                                                
MICHAEL O'CONNOR, ANCHORAGE  (via teleconference), testified                                                                    
in support of  HB 110. He disagreed  with previous testimony                                                                    
that money  made from  the oil industry  left the  state. He                                                                    
commented   on  the   changes   resulting   from  the   ACES                                                                    
legislation. He  did not think  ACES was working.  He listed                                                                    
companies  that had  come to  the state  to explore  and the                                                                    
money they  had spent  to develop  the resource.  He pointed                                                                    
out that the  new companies had not spent  money. He thought                                                                    
the first priority  was to keep oil flowing  in the pipeline                                                                    
and that  incentives alone would  keep big oil  companies in                                                                    
the state. He  noted that 71 percent of oil  revenue went to                                                                    
the state or federal government.                                                                                                
                                                                                                                                
5:10:26 PM                                                                                                                    
                                                                                                                                
BRUCE HARLAND, ANCHORAGE  (via teleconference), testified in                                                                    
favor of  HB 110. He  described experience in  the industry.                                                                    
He stated that investment  decisions that oil companies made                                                                    
were long-lead  items, and that companies  were competing on                                                                    
a world-wide market for  infrastructure projects. He thought                                                                    
the legislation would improve the  investment climate in the                                                                    
state.                                                                                                                          
                                                                                                                                
5:13:01 PM                                                                                                                    
                                                                                                                                
KIM GRIFFITH,  ANCHORAGE (via teleconference),  testified in                                                                    
support  of   HB  110.  She   wanted  her  family   to  have                                                                    
opportunity in  the state and  believed the  legislation was                                                                    
necessary as soon as possible.                                                                                                  
                                                                                                                                
5:14:39 PM                                                                                                                    
                                                                                                                                
JOSEPH SCOTT  SR., TALKETNA (via  teleconference), testified                                                                    
in  opposition  to HB  110.  He  saw  the legislation  as  a                                                                    
violation of ethics because of  conflict of interest for the                                                                    
governor. He  also felt  that money should  not be  given to                                                                    
oil  companies, as  it would  treat for-profit  companies as                                                                    
though they  were nonprofit,  charity organizations.  He did                                                                    
feel something needed to be done,  but that HB 110 was not a                                                                    
legitimate solution.                                                                                                            
                                                                                                                                
5:17:14 PM                                                                                                                    
                                                                                                                                
TODD  BROWN, ANCHORAGE  (via  teleconference), testified  in                                                                    
opposition to  the legislation. He pointed  to large profits                                                                    
made  by  oil companies  and  questioned  testimony that  70                                                                    
percent of  the profit stayed  in the state. He  spoke about                                                                    
strategies  in North  Dakota to  build an  infrastructure to                                                                    
make profit. He urged a larger perspective.                                                                                     
                                                                                                                                
5:21:06 PM                                                                                                                    
                                                                                                                                
JIMMY  DOYLE, ANCHORAGE  (via teleconference),  testified in                                                                    
support of  HB 110.  He discussed experience  with business.                                                                    
investment.                                                                                                                     
                                                                                                                                
5:22:20 PM                                                                                                                    
                                                                                                                                
HUGH  FATE,  ANCHORAGE  (via teleconference),  testified  in                                                                    
support  of HB  110. He  spoke about  nations in  the Middle                                                                    
East  that   were  suffering  as   a  result  of   poor  tax                                                                    
structures.  He  described  the business  practices  of  oil                                                                    
companies,  and  stated  that  those  who  have  the  lowest                                                                    
expenses and the highest profit  margins get the most money.                                                                    
He  reminded the  committee  that there  was  both fact  and                                                                    
fiction in testimony.                                                                                                           
                                                                                                                                
5:25:15 PM                                                                                                                    
                                                                                                                                
ANDY  BOND,  ANCHORAGE  (via teleconference),  testified  in                                                                    
support  of HB  110. He  spoke as  an engineer  and compared                                                                    
doing  business  in  Texas with  doing  business  in  Alaska                                                                    
related  to  investment.  He believed  progressivity  was  a                                                                    
problem for companies. He spoke  to declining throughput. He                                                                    
wanted increased tax credits for  new investment and reduced                                                                    
progressivity at high oil prices.                                                                                               
                                                                                                                                
5:27:29 PM                                                                                                                    
                                                                                                                                
CHARLIE  POWERS, KODIAK  (via teleconference),  testified in                                                                    
support  of  HB  110.  He described  Alaskan  lifestyle  for                                                                    
individuals   and  companies.   He  stated   concerns  about                                                                    
declining throughput  in TAPS.  He believed  that investment                                                                    
dollars  followed the  highest return;  since 90  percent of                                                                    
the state's revenue  was from oil, he felt  it was essential                                                                    
to make tough decisions and focus on becoming competitive.                                                                      
                                                                                                                                
5:30:38 PM                                                                                                                    
                                                                                                                                
JODIE DOMINGUEZ,  ANCHORAGE (via  teleconference), testified                                                                    
in opposition  to HB 110.  She thought it was  good business                                                                    
for  oil and  gas companies  to pay  less taxes;  she wanted                                                                    
legislators to treat  Alaska like a company  and protect the                                                                    
state's assets.                                                                                                                 
                                                                                                                                
5:31:52 PM                                                                                                                    
                                                                                                                                
DON SMITH, JUNEAU, spoke in  opposition to HB 110, unless it                                                                    
was amended. He supported the  oil industry. He supported an                                                                    
incentive  program  rather  than  a  straight  reduction  of                                                                    
taxes. He did  not want the profit to go  outside the state.                                                                    
He suggested amending the bill with incentives.                                                                                 
                                                                                                                                
5:35:19 PM                                                                                                                    
                                                                                                                                
STUART COHEN, JUNEAU, testified in  opposition to HB 110. He                                                                    
agreed oil  was important in  the state, but  questioned the                                                                    
bill's  ability to  accomplish what  was needed.  He pointed                                                                    
out that  the bill  would give a  blanket tax  deduction for                                                                    
all   production,   including   areas  that   were   already                                                                    
developed.  He  felt the  bill  would  reward companies  for                                                                    
sitting on  developments already made and  would not require                                                                    
new  exploration or  the creation  of new  jobs. He  did not                                                                    
think  it  was good  business  to  have vague  promises.  He                                                                    
questioned  a plan  that would  create a  $2 billion  budget                                                                    
deficit.                                                                                                                        
                                                                                                                                
5:39:42 PM                                                                                                                    
                                                                                                                                
KEN  WIDMER,   MATSU  (via  teleconference),   testified  in                                                                    
opposition to HB  110. He was not opposed to  changes in the                                                                    
tax system,  but he  thought the changes  should be  made by                                                                    
non-partisan  experts in  the field.  He suggested  that the                                                                    
legislation  be completely  rewritten.  He wanted  something                                                                    
back from the oil companies in exchange for the funds.                                                                          
                                                                                                                                
5:41:30 PM                                                                                                                    
                                                                                                                                
RHONDA BOYLES, FAIRBANKS  (via teleconference), testified in                                                                    
support  of  HB  110.  She admitted  that  the  bill  needed                                                                    
amending,  but  believed   it  was  a  step   in  the  right                                                                    
direction.  She stated  that ACES  had to  be corrected  and                                                                    
that the  tax incentive  was essential  for the  strength of                                                                    
the economy  of Alaska. She  referred to someone  from North                                                                    
Dakota who had  said that North Dakota  "was taking Alaska's                                                                    
oil industry  and doing something  with it."  However, North                                                                    
Dakota  did   not  have   the  infrastructure.   She  stated                                                                    
concerns.                                                                                                                       
                                                                                                                                
5:46:29 PM                                                                                                                    
                                                                                                                                
MIKE  PRAX, NORTH  POLE (via  teleconference), testified  in                                                                    
support  of  HB  110.  He believed  the  best  strategy  was                                                                    
viewing the  oil companies as partners  and not competitors.                                                                    
He  thought oil  prices were  a bit  high and  needed to  be                                                                    
adjusted.                                                                                                                       
                                                                                                                                
5:48:48 PM                                                                                                                    
                                                                                                                                
BART  LEBON,   FAIRBANKS  (via  teleconference),   spoke  in                                                                    
support of  HB 110.  He urged the  immediate passage  of the                                                                    
legislation.  He  cited  long  experience  as  a  banker  in                                                                    
Fairbanks.  He   believed  that  without  action,   the  oil                                                                    
companies would  leave Alaska. He stated  concerns about the                                                                    
declining TAPS throughput.                                                                                                      
                                                                                                                                
5:51:26 PM                                                                                                                    
                                                                                                                                
ADELA  JACKSON,  FAIRBANKS  (via teleconference),  spoke  in                                                                    
support of HB 110. She  wanted to develop Alaska's resources                                                                    
responsibly  and  to diversify  the  economy.  She spoke  in                                                                    
favor of  the mining industry. She  believed the legislation                                                                    
would  bring investment  back to  Alaska  and stimulate  the                                                                    
economy. "No oil, no jobs, no future, no way."                                                                                  
                                                                                                                                
5:52:52 PM                                                                                                                    
                                                                                                                                
JACK  FOCOSE,  KENAI   (via  teleconference),  testified  in                                                                    
support  of HB  110.  He believed  that  incentives and  tax                                                                    
breaks worked  and cited  the experience  of a  company that                                                                    
had  moved to  North Dakota.  He  spoke in  support of  past                                                                    
decisions for Cook Inlet tax breaks.                                                                                            
                                                                                                                                
5:54:22 PM                                                                                                                    
                                                                                                                                
STEVEN MCGROARTY,  FAIRBANKS (via teleconference),  spoke in                                                                    
opposition to  HB 110. He listed  expected exploration plans                                                                    
by  companies for  the near  future and  stated that  Alaska                                                                    
would  continue to  provide good  options  for oil  industry                                                                    
investment.   He   suggested   funding   hydropower,   wind,                                                                    
geothermal, tidal power  projects and roads-to-resources for                                                                    
mineral development  and ice-road access to  villages, which                                                                    
could  create annual  sustainable jobs  in rural  Alaska and                                                                    
bring down the cost of fuel for the villages.                                                                                   
                                                                                                                                
5:57:15 PM                                                                                                                    
                                                                                                                                
BILL  JOHNSON,  ANCHORAGE  (via  teleconference),  testified                                                                    
against HB  110. He referred  to industry testimony  and did                                                                    
not think there  would be exploration by  the big companies.                                                                    
He stated concerns about TAPS  infrastructure. He wanted the                                                                    
state to  look at  developing other  industries. He  did not                                                                    
believe that the state would see a gasline built.                                                                               
                                                                                                                                
6:00:49 PM                                                                                                                    
                                                                                                                                
RAY   METCALFE,  SELF   (via  teleconference),   voiced  his                                                                    
opposition to  HB 110. He  had been in the  legislature when                                                                    
ELF  was  passed.   He  had  been  skeptical   of  the  bill                                                                    
originally and regretted  voting for it. He  told a personal                                                                    
story about his  experience tracking down a memo  put out by                                                                    
Sohio  (BP in  Alaska) telling  stockholders how  much money                                                                    
was  being made  from Alaskan  investments, the  opposite of                                                                    
what  their  lobbyists  had  been  telling  legislators.  He                                                                    
believed that ELF  had cost the state $100  billion over the                                                                    
past 30  years. The  people involved in  the passage  of the                                                                    
bill went  on to work for  oil companies. He thought  it was                                                                    
important to  look at  why the  newspapers in  Anchorage and                                                                    
Fairbanks had  not published profits  that were made  by the                                                                    
oil companies. He stated that  Exxon, ConocoPhillips, and BP                                                                    
(and others) had  signed contracts in Iraq  to produce their                                                                    
oil for  less than  $2 per barrel,  while they  were getting                                                                    
$20 in  Alaska. He did  not want tax  breaks to be  given to                                                                    
the companies except on the increase.                                                                                           
                                                                                                                                
6:07:05 PM                                                                                                                    
                                                                                                                                
STEVEN   BORELLE,   EXECUTIVE    DIRECTOR,   ALASKA   MINERS                                                                    
ASSOCIATION  (via teleconference),  testified in  support of                                                                    
HB 110. He did not  believe that anything except oil flowing                                                                    
through the pipeline would ensure  the security for Alaska's                                                                    
future.                                                                                                                         
                                                                                                                                
6:08:06 PM                                                                                                                    
                                                                                                                                
ROY EARNEST,  SELF, ESTER (via teleconference),  was opposed                                                                    
to HB 110. He agreed with  Mr. Metcalfe. He pointed out that                                                                    
the information referred to was  open to the general public.                                                                    
He understood the  information and was not  swayed by people                                                                    
lobbying for the oil companies.  He did not believe that the                                                                    
oil would  dry up or disappear.  He felt that tax  breaks to                                                                    
the oil companies were ridiculous.                                                                                              
                                                                                                                                
6:10:01 PM                                                                                                                    
                                                                                                                                
DARLENE  HERBERT,  SELF,   FAIRBANKS  (via  teleconference),                                                                    
vocalized  her opposition  to HB  110. She  did not  believe                                                                    
that oil  companies cared about Alaskans  or the legislators                                                                    
and  only  cared  about  their   stockholders.  She  told  a                                                                    
personal story about several visits  to the North Slope. She                                                                    
had  recently been  to the  job  fair in  Fairbanks and  she                                                                    
emphasized  that there  were a  significant  amount of  jobs                                                                    
available  in Fairbanks.  She believed  that Alaska  was too                                                                    
dependent on oil.                                                                                                               
                                                                                                                                
6:13:19 PM                                                                                                                    
                                                                                                                                
BLYTHE  CAMPBELL, SELF  (via  teleconference), supported  HB                                                                    
110. She did  not agree that taking money  away from private                                                                    
industry would benefit Alaskans.  She believed that the need                                                                    
for  legislators to  be reelected  every two  or four  years                                                                    
made  it difficult  for  them to  take a  long  view of  the                                                                    
economy in Alaska. She wanted  to make HB 110 retroactive to                                                                    
January 2011 and start another oil boom.                                                                                        
                                                                                                                                
6:15:20 PM                                                                                                                    
                                                                                                                                
TOM MALONEY,  SELF (via teleconference), stated  his support                                                                    
of HB 110. He referred  to earlier testimony in Anchorage on                                                                    
the legislation; he  felt it was unanimous  that people felt                                                                    
changes  were needed  in ACES.  He referred  to a  report by                                                                    
Commonwealth North (pages 5 and 12):                                                                                            
                                                                                                                                
     If  Alaskans are  to maintain  their  present level  of                                                                    
     economic well-being, the  governor and legislature must                                                                    
     make  increasing oil  production the  highest priority.                                                                    
     Nationally,  there  is  a   growing  awareness  of  the                                                                    
     detrimental impact  high taxes can have  on the private                                                                    
     sector and thereby the general  economy. Alaska has the                                                                    
     opportunity to heed this  impact by making improvements                                                                    
     to the  current oil tax  structure. Now is the  time to                                                                    
     act while  there is still an  opportunity to strengthen                                                                    
     Alaska's  economy  through  increased  oil  production.                                                                    
     …100 percent  of the time, the  Department of Revenue's                                                                    
     forecasts  have   been  too  high  in   predicting  oil                                                                    
     production.                                                                                                                
                                                                                                                                
Mr.  Maloney   questioned  whether   TAPS  would   still  be                                                                    
operating in five years without greatly needed changes.                                                                         
                                                                                                                                
6:17:27 PM                                                                                                                    
                                                                                                                                
KELLY WALTERS, SELF  (via teleconference), testified against                                                                    
HB  110. He  did not  want the  committee to  pass the  bill                                                                    
before it  had all  of the  data and  facts. He  referred to                                                                    
testimony made  by Commissioner  Sullivan of  the Department                                                                    
of  Natural  Resources  (DNR).   He  believed  that  it  was                                                                    
important to  promote Alaska and  that it was a  great place                                                                    
to do business. He referred  to high rankings for the state.                                                                    
He  claimed that  the development  of  wells and  employment                                                                    
under  ACES  was up.  He  noted  that Repsol  was  investing                                                                    
three-quarters of a billion dollars  on exploratory wells in                                                                    
new fields on the North  Slope, and Great Bear Petroleum and                                                                    
other companies had production plans as well.                                                                                   
                                                                                                                                
6:21:56 PM                                                                                                                    
                                                                                                                                
DEIDRE   CRONIN,  SELF   (via  teleconference),   emphasized                                                                    
support of HB 110. She reported  that she worked in the non-                                                                    
profit sector and wanted to  raise their children in Alaska.                                                                    
She was concerned that there  had only been one well drilled                                                                    
during the current year, while  North Dakota was doing well.                                                                    
She thought Alaskans should be proud to be an oil state.                                                                        
                                                                                                                                
6:23:18 PM                                                                                                                    
                                                                                                                                
JANET BOUNDS,  SELF (via teleconference), voiced  support of                                                                    
HB  110.  She  felt  there  was   a  lack  of  work  in  the                                                                    
construction  sector.  She  believed   there  needed  to  be                                                                    
incentive for the oil industry to do business in Alaska.                                                                        
                                                                                                                                
6:24:48 PM                                                                                                                    
                                                                                                                                
JOHN SHIVELY,  SELF, ANCHORAGE (via teleconference),  was in                                                                    
favor  of passage  of HB  110. He  discussed history  of oil                                                                    
taxes of  as a former  Commissioner of DNR. He  had believed                                                                    
there was  a need  to adjust  the tax  system when  ACES was                                                                    
being developed, but felt the  focus went from trying to fix                                                                    
the  problem  to  trying  to punish  the  oil  industry.  He                                                                    
believed the  punitive tax system  had to be fixed  and that                                                                    
the  evidence  showed  (in  the  Frasier  Report)  that  oil                                                                    
companies did not want to invest in Alaska on-shore.                                                                            
                                                                                                                                
6:26:36 PM                                                                                                                    
                                                                                                                                
HAL   GAZAWAY,   SELF,   ANCHORAGE   (via   teleconference),                                                                    
testified that  he was  against HB 110.  He felt  that under                                                                    
ELF, Alaska  had some of the  cheapest oil in the  world and                                                                    
that under ACES,  the state was competitive. He  did not see                                                                    
that  the bill  was  supported by  commitment  from any  oil                                                                    
company to drill  more or bring more oil  into the pipeline.                                                                    
He pointed out that he would not mind paying more taxes.                                                                        
                                                                                                                                
6:28:14 PM                                                                                                                    
                                                                                                                                
BARBARA GAZAWAY,  SELF, ANCHORAGE (via  teleconference), was                                                                    
opposed to  HB 110. She  did not buy  all of the  "gloom and                                                                    
doom" that  was being  put out by  the oil  corporations and                                                                    
others in the  state. She felt the  corporations were making                                                                    
a lot of money, including  through tax subsidies, which were                                                                    
distributed  to  shareholders  instead  of  being  used  for                                                                    
research  and development  of alternatives.  She noted  that                                                                    
net profits had  gone from 58 percent in 2005  to 89 percent                                                                    
in  2009. She  did  not  think the  bill  would require  new                                                                    
development  in  exchange for  the  $2  billion "gift."  She                                                                    
pointed  out  that  the  non-partisan  Tax  Foundation  2011                                                                    
report  had  ranked Alaska  as  second  in having  the  best                                                                    
climate for business.                                                                                                           
                                                                                                                                
6:31:42 PM                                                                                                                    
                                                                                                                                
PAULA  EASLEY, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in support  of HB 110.  She referred to friends  in business                                                                    
who  wanted   to  leave  California   because  of   so  much                                                                    
regulation,  but  the  economy  there was  so  diverse.  She                                                                    
pointed out  that Alaska  had only  one major  industry. She                                                                    
wanted to eliminate ACES for  a couple years and see whether                                                                    
the oil companies increased  exploration and development; if                                                                    
they did not, ACES could be brought back.                                                                                       
                                                                                                                                
6:33:36 PM                                                                                                                    
                                                                                                                                
RYAN  KNIGHT, SELF,  ANCHORAGE  (via teleconference),  urged                                                                    
against  the passage  of HB  110. She  pointed out  that the                                                                    
country was in  a recession and she did not  want to put the                                                                    
money  into  oil  companies.  She wanted  the  money  to  go                                                                    
towards job development.                                                                                                        
                                                                                                                                
6:35:22 PM                                                                                                                    
                                                                                                                                
MIKE SIROFCHUCK,  SELF, KODIAK (via  teleconference), voiced                                                                    
opposition  to HB  110. He  wanted  more information  before                                                                    
making  the decision.  He believed  the  oil companies  were                                                                    
making high profits and were  interested in increasing those                                                                    
profits, which  would be at  the expense of the  citizens of                                                                    
Alaska. He pointed  out that residents of  North Dakota paid                                                                    
an income tax  and he believed that  Alaskans were fortunate                                                                    
to not  have to  pay income  tax, because  of oil  taxes. He                                                                    
supported  tax breaks  for  new  exploration and  developing                                                                    
other  sources of  income,  but did  not  support using  the                                                                    
proposed oil tax structure.                                                                                                     
                                                                                                                                
6:37:47 PM                                                                                                                    
                                                                                                                                
SHANNON MOORE,  SELF, ANCHORAGE (via  teleconference), spoke                                                                    
against   the  legislation.   She  pointed   out  that   the                                                                    
previously  mentioned  Frasier  Institute  Report  had  been                                                                    
pulled and was not  valid. (Reception interrupted; continued                                                                    
testimony below.)                                                                                                               
                                                                                                                                
6:39:05 PM                                                                                                                    
                                                                                                                                
NEIL BLACK,  SELF, ANCHORAGE  (via teleconference),  urged a                                                                    
no vote for HB 110.  He communicated that oil companies were                                                                    
making record  profits and received  billions of  dollars in                                                                    
tax subsidies; some  did not pay any federal  income tax. He                                                                    
pointed out  that oil companies  were complaining  about the                                                                    
level of  taxes in  North Dakota.  He recommended  a website                                                                    
called "fixthetax.org" and believed  that oil companies were                                                                    
complaining unnecessarily.  He noted  that Repsol  and Great                                                                    
Bear  Petroleum   were  coming   to  the  North   Slope  for                                                                    
exploration  and  production, in  spite  of  ACES, and  that                                                                    
there were  more businesses opening in  Anchorage. He agreed                                                                    
that oil  was needed in  the pipeline,  but did not  want to                                                                    
pay more money to the companies and increase their profits.                                                                     
                                                                                                                                
6:41:12 PM                                                                                                                    
                                                                                                                                
SHANNON  MOORE, SELF,  ANCHORAGE  (via teleconference),  was                                                                    
against  HB 110.  She discussed  that  the Fraser  Institute                                                                    
Report had  originally been used by  the administration, but                                                                    
they stopped  using it  because it did  not support  HB 110.                                                                    
She pointed out difference  between Alaska and North Dakota.                                                                    
She asserted that the legislature  held the Alaskan people's                                                                    
collective  bargaining for  collective mineral  rights given                                                                    
through the state constitution.                                                                                                 
                                                                                                                                
Ms.  Moore  relayed  a  story  about  people  visiting  from                                                                    
outside Alaska who had the  impression that Alaska was not a                                                                    
good  place  to  do  business. She  believed  that  the  oil                                                                    
companies  were "crying  poor" in  spite of  record profits,                                                                    
and the administration had not  ever pushed back. She argued                                                                    
that Alaska  was not in  a recession and there  were current                                                                    
jobs that were helping our  economy. She pointed to projects                                                                    
in  various  districts  that  were  supporting  the  private                                                                    
sector.                                                                                                                         
                                                                                                                                
Representative  Gara  thanked  Ms.   Moore  and  others  for                                                                    
remaining active in Alaska's politics.                                                                                          
                                                                                                                                
6:45:48 PM                                                                                                                    
                                                                                                                                
BRIAN    NEWTON,   PRESIDENT,    GOLDEN   VALLEY    ELECTRIC                                                                    
ASSOCIATION, FAIRBANKS (via  teleconference), spoke in favor                                                                    
of  HB 110.  He  believed  that lowering  taxes  on the  oil                                                                    
industry would increase production  and help open Alaska for                                                                    
business.                                                                                                                       
                                                                                                                                
6:46:58 PM                                                                                                                    
                                                                                                                                
ALAN BATTEN, FAIRBANKS (via  teleconference), was opposed to                                                                    
HB 110. He  did not see anything wrong with  the current tax                                                                    
structure  in   Alaska.  He  reviewed  profits   by  various                                                                    
companies,  which   he  thought   were  ample.   He  thought                                                                    
investments had increased  as well. He did  not believe that                                                                    
giving away  $2 billion to  the oil companies  would improve                                                                    
the situation.                                                                                                                  
                                                                                                                                
6:48:25 PM                                                                                                                    
                                                                                                                                
TIM  O'DONNELL, SELF,  JUNEAU  (via teleconference),  stated                                                                    
opposition to HB 110. He reported  that he had worked on the                                                                    
TAPS pipeline  and at Prudhoe  Bay, and had helped  with the                                                                    
clean-up after the Exxon Valdez  oil spill. He addressed the                                                                    
subject of tax credits for  giving jobs to Alaskans. He felt                                                                    
that workers  had been used  pawns in the game  of taxation.                                                                    
He referred  to amendments that  had been introduced  in the                                                                    
past  by  Representative  Guttenberg  aimed  at  giving  tax                                                                    
credits for  hiring Alaskan  workers and  consistently voted                                                                    
down. He  pointed to HB  82 and SB  71, which were  aimed at                                                                    
Alaska hire, which he did  not think should be contingent on                                                                    
passage of  HB 110. He did  not want the oil  industry to be                                                                    
able to  apply for tax  breaks by voluntarily  hiring Alaska                                                                    
workers, while there were thousands  of non-resident jobs in                                                                    
the  oil industry  and  high rates  of  unemployment in  the                                                                    
state.                                                                                                                          
                                                                                                                                
6:51:57 PM                                                                                                                    
                                                                                                                                
BERTRAM SMITH,  SELF, BIG  LAKE (via  teleconference), spoke                                                                    
against HB  110. He believed  there was a limited  amount of                                                                    
oil on  the North Slope  and that oil prices  would continue                                                                    
to rise  as resources  became more  limited. He  referred to                                                                    
profits made  in Libya  from oil  companies. He  opined that                                                                    
Alaska's oil should  be kept in state; if not,  it should be                                                                    
paid well for.                                                                                                                  
                                                                                                                                
6:54:36 PM                                                                                                                    
                                                                                                                                
PATRICIA  ANDERSON,  SELF, ANCHORAGE  (via  teleconference),                                                                    
was against  HB 110.  She read  from the  state constitution                                                                    
about political  power and government being  inherent in the                                                                    
people  and instituted  for  the  good of  the  people as  a                                                                    
whole.  In   addition,  the  constitution   stipulates  that                                                                    
natural resources  are for the  good of the people,  not the                                                                    
good of a  company. Therefore, the oil was  owned by 700,000                                                                    
Alaskans.  She  did  not  believe  giving  away  $2  billion                                                                    
without promise  of oil production  or Alaskan jobs  was for                                                                    
the good of the people.                                                                                                         
                                                                                                                                
6:55:34 PM                                                                                                                    
                                                                                                                                
TOM  HENDRIX, SELF,  PALMER (via  teleconference), testified                                                                    
in support  of HB 110.  He believed that Alaskans  should be                                                                    
able  to   enjoy  a  profit,  but   also  acknowledged  that                                                                    
corporations  were in  Alaska to  make money.  He felt  that                                                                    
Alaskan roads, schools, and libraries were funded by oil.                                                                       
                                                                                                                                
6:57:05 PM                                                                                                                    
                                                                                                                                
KATHLEEN  HARMS,  SELF,  MAT-SU  (via  teleconference),  was                                                                    
against HB 110.  She believed that giving $2  billion to the                                                                    
oil companies would not help  the state. She thought the oil                                                                    
would run out and the oil companies would be long gone.                                                                         
                                                                                                                                
6:58:27 PM                                                                                                                    
                                                                                                                                
CHERI GILLIAN, SELF,  ANCHORAGE (via teleconference), voiced                                                                    
support of  HB 110. She  was concerned that without  the oil                                                                    
companies,  investment  in  the state  would  decline,  jobs                                                                    
would  disappear,  and people  would  leave  the state.  She                                                                    
believed  that  state  policies  were  stifling  exploration                                                                    
development  and  development  by   the  oil  industry.  She                                                                    
believed the  support of the  oil and gas industry  was very                                                                    
important to  businesses in the  state. She  urged immediate                                                                    
action.                                                                                                                         
                                                                                                                                
7:00:54 PM                                                                                                                    
                                                                                                                                
JACK   CROCKETT,  SELF,   ANCHORAGE  (via   teleconference),                                                                    
vocalized support for HB 110.                                                                                                   
                                                                                                                                
Co-Chair Stoltze thanked the public for their testimony.                                                                        
                                                                                                                                
HB  110  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
7:02:15 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 7:02 PM.                                                                                           

Document Name Date/Time Subjects
HB 110 Guttenberg Handout 032511.pdf HFIN 3/25/2011 3:00:00 PM
HB 110