Legislature(2017 - 2018)HOUSE FINANCE 519

03/25/2017 10:00 AM FINANCE

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

Document Name Date/Time Subjects
HB 111 - Documents in Support - Public Testimony.pdf HFIN 3/25/2017 10:00:00 AM
HB 111
HB 111 - Documents in Opposition - Public Testimony.pdf HFIN 3/25/2017 10:00:00 AM
HB 111
HB 111 - Documents in Opposition (3).pdf HFIN 3/25/2017 10:00:00 AM
HB 111
HB 111 - Documents in Opposition (2) - Public Testimony.pdf HFIN 3/25/2017 10:00:00 AM
HB 111
HB 111 - Documents in Support (2) - Public Testimony.pdf HFIN 3/25/2017 10:00:00 AM
HB 111