Legislature(2003 - 2004)
05/19/2003 04:24 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 19, 2003
4:24 PM
TAPE HFC 03 - 103, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 4:24 PM.
MEMBERS PRESENT
Representative John Harris, Co-Chair
Representative Bill Williams, Co-Chair
Representative Kevin Meyer, Vice-Chair
Representative Ethan Berkowitz
Representative Mike Chenault
Representative Richard Foster
Representative Mike Hawker
Representative Beth Kerttula
Representative Carl Moses
Representative Bill Stoltze
Representative Jim Whitaker
MEMBERS ABSENT
Representative Eric Croft
Representative Reggie Joule
ALSO PRESENT
Senator Thomas Wagoner; Will Nebesky, Department of Natural
Resources; Bill Van Dyke, Petroleum Manager, Department of
Natural Resources; Steve Porter, Deputy Commissioner,
Department of Revenue.
PRESENT VIA TELECONFERENCE
Dan Dickinson, Director, Division of Oil and Gas Audit,
Department of Revenue.
SUMMARY
CSSB 185(FIN)
"An Act providing for a reduction of royalty on certain
oil produced from Cook Inlet submerged land, and for a
credit for certain exploration expenses against oil and
gas properties production taxes on oil and gas produced
from a lease or property in the state."
CSSB 185(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with two previously published
fiscal impact notes: DNR #2 and REV #3.
CSSB 117(FIN)
"An Act relating to the longevity bonus program; and
providing for an effective date."
CSSB 117 (FIN) was REPORTED out of Committee with
no recommendation" and five fiscal impact notes: #2,
#3 and #4, and #6 from the Department of Health and
Social Services, and #5 from the Department of
Administration.
CS FOR SENATE BILL NO. 185(FIN)
"An Act providing for a reduction of royalty on certain
oil produced from Cook Inlet submerged land, and for a
credit for certain exploration expenses against oil and
gas properties production taxes on oil and gas produced
from a lease or property in the state."
Representative Berkowitz expressed concern about moving a
bill of this magnitude without having the opportunity to
fine-tune its programs. He observed that incentives were
being made available without adequate knowledge of the level
of exploration throughout the state. He raised questions
about access to all producers. He questioned whether ten
years' hold on data was too much, or whether two years might
encourage competition.
Representative Berkowitz MOVED to ADOPT Amendment #1, by
Representative Berkowitz and Representative Kerttula:
REPORT TO THE LEGISLATURE. On or before the first day
of the Second Regular Session of the Twenty-Third
Alaska State Legislature, the commissioner of natural
resources shall prepare a report to the legislature.
The report must include a discussion
(1) Specific incentives that could be used to spur
oil and gas exploration;
(2) A comprehensive plan to lower pipeline tariffs
for independent oil producers;
(3) A comprehensive plan for reasonably priced
access to facilities and infrastructure;
(4) An informational study on the higher cost of
exploration and development in the state and plans
to mitigate that higher cost; and
(5) The potential costs and benefits inherent to
each incentive plan.
Co-Chair Williams OBJECTED.
In response to a question by Co-Chair Harris, Representative
Berkowitz stated that the Department had been apprised of
the changes proposed by the amendment. He pointed out that
the amendment requires a comprehensive report from the
Department of Natural Resources regarding oil exploration.
He maintained that the areas contained in the amendment
needed further study.
Representative Whitaker asked that his name be added to the
amendment.
STEVE PORTER, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE
stated that the report indicated by the amendment was more
comprehensive than anticipated. He expressed concern
regarding the words "comprehensive plan" in regards to the
level of effort required. He observed that additional
personnel would be needed if the level of detail required
were great.
Representative Berkowitz MOVED to AMEND the Amendment to
delete the word "comprehensive" from lines 11 and 13. Co-
Chair Williams OBJECTED for purpose of further discussion.
Representative Hawker noted that "plan" indicated intent to
lower pipeline tariffs and implied that current practices
needed to be changed. He stated that he would be more
comfortable with an amendment that discussed the
"feasibility" or "reasonability" of lower pipeline tariffs.
Mr. Porter suggested the wording:
(2) An analysis of the impact of pipeline tariffs on
independent oil producers;
Representative Berkowitz WITHDREW his MOTION and MOVED
Amendment #1.a, which would change "comprehensive plan" to
"an analysis".
Vice-Chair Meyer OBJECTED. He asked the definition of
independent oil producers. He noted that the title of the
bill indicated Cook Inlet Oil and asked if this reflected a
concern for access to the pipeline in the Cook Inlet or
TAPS. He also asked whether facilities referred to those in
Cook Inlet or all facilities. He suggested that a clear
definition of independent oil might be available. Mr.
Porter indicated that the word "independent" might not be a
definitive statement. He asked whether this was focused on
the North Slope.
Representative Kerttula stated that the focus was mainly for
non-carriers in the North Slope. Mr. Porter indicated that
removing "independent oil producers" would be more
inclusive. Rep. Meyer concurred that this might be
preferable since the bill was focused on the North Slope.
Representative Berkowitz noted that that the cost of
exploration expenses might be anywhere in the state.
Representative Whitaker maintained that the intent of the
report is to find out what is probable and possible.
Representative Hawker clarified lines 4 and 5. He suggested
that (4) be changed to read "an analysis of the costs of
exploration and development in the state and opportunities
or approaches to mitigate that higher cost".
Representative Whitaker observed that the report need not be
overly comprehensive. Representative Hawker concurred that
his suggested was to focus on viable and immediate
opportunities.
Representative Hawker suggested that (5) be finished to
read: "inherent to each option."
Amendment 1A was Amended to read and MOVED:
REPORT TO THE LEGISLATURE. On or before the first day
of the Second Regular Session of the Twenty-Third
Alaska State Legislature, the commissioner of natural
resources shall prepare a report to the legislature.
The report must include a discussion
(1) Of specific incentives that could be used to
spur oil and gas exploration;
(2) And an analysis of the impact of pipeline
tariffs on independent oil producers;
(3) And an analysis of the costs of access to
facilities and infrastructure;
(4) And an analysis of the costs of exploration
and development in the state and opportunities or
approaches to mitigate that higher cost; and
(5) Of the potential costs and benefits inherent
to each option.
There being NO OBJECTION, Amendment 1.A was ADOPTED as
Amended.
Mr. Porter clarified that the Department would not be able
to immediately analyze the impacts of the bill.
Representative Berkowitz emphasized that this was his
concern with the bill. Mr. Porter clarified that they would
not be able to analyze the effectiveness of the bill until
the following year.
Representative Berkowitz pointed out that his intent was
that next session, when an oil and gas bill was introduced,
the research would give adequate background information.
Representative Foster MOVED to report HCSSB 185 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTIONS, it was
so ordered.
HCSSB 185 (FIN) was REPORTED out of Committee with a
recommendation and
CSSB 185(FIN) was REPORTED out of Committee with a "do pass"
recommendation and with two previously published fiscal
impact notes: DNR #2 and REV #3.
CS FOR SENATE BILL NO. 117(FIN)
"An Act relating to the longevity bonus program; and
providing for an effective date."
Representative Stoltze MOVED to ADOPT Amendment #1, #23-
GS1100\C.5, Cook, 5/18/03 (Copy on File).
Co-Chair Williams OBJECTED.
Representative Stoltze explained that the amendment would
off an income based needs-based program. The income levels
were based on the Denali Kid Care program.
Co-Chair Williams stated that he would like to work on the
legislation. He noted that the Governor does not like the
bill; it was barely passed by the Senate. There is not
enough time in this session to address a compromise. He
commented that it was a logistic problem.
Co-Chair Harris noted that he supported Amendment #1. It
would provide for protect the most needy in the State. The
amendment would allow those people that really need to
qualify to receive it. He asked if these people would have
to apply monthly for eligibility.
Representative Stoltze thought that they would rely on
regulatory authority.
AT EASE: 5:00 P.M.
RECONVENE: 5:05 P.M.
Representative Stoltze WITHDREW the Amendment and proposed
to offer it on the Floor.
Co-Chair Harris MOVED to report CSSB 117 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. Representative Berkowitz
OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Stoltze; Whitaker; Hawker; Meyer; Williams; Harris
OPPOSED: Berkowitz; Foster; Kerttula; Moses
Representative Chenault was not present for the vote.
The MOTION PASSED (6-4).
CSSB 117 (FIN) was REPORTED out of Committee with
no recommendation" and five fiscal impact notes: #2, #3 and
#4, and #6 from the Department of Health and Social
Services, and #5 from the Department of Administration.
ADJOURNMENT
The meeting was adjourned at 4:59 P.M.
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