Legislature(2007 - 2008)BARNES 124
03/28/2007 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB186 | |
| HB128 | |
| HB203 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 203 | TELECONFERENCED | |
| *+ | HB 176 | TELECONFERENCED | |
| *+ | HB 194 | TELECONFERENCED | |
| + | HJR 4 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 186 | TELECONFERENCED | |
| += | HB 128 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 28, 2007
1:04 p.m.
MEMBERS PRESENT
Representative Carl Gatto, Co-Chair
Representative Craig Johnson, Co-Chair
Representative Vic Kohring
Representative Bob Roses
Representative Paul Seaton
Representative Peggy Wilson
Representative Bryce Edgmon
Representative David Guttenberg
Representative Scott Kawasaki
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 186
"An Act relating to sharing with certain federal agencies
records required of sport fishing guides."
- MOVED CSHB 186(FSH) OUT OF COMMITTEE
HOUSE BILL NO. 128
"An Act relating to allowable lease expenditures for the purpose
of determining the production tax value of oil and gas for the
purposes of the oil and gas production tax; and providing for an
effective date."
- HEARD AND HELD; ASSIGNED TO SUBCOMMITTEE
HOUSE BILL NO. 203
"An Act creating the Kodiak Narrow Cape Public Use Area."
- HEARD AND HELD
HOUSE BILL NO. 176
"An Act creating the Fort Rousseau Causeway State Historical
Park."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 194
"An Act relating to fines for certain offenses involving
aeronautics, alcoholic beverages, boats, fish and game, health
care records and public health, medical review organizations,
public restroom facilities, smoking, shelter cabins,
refrigerators and similar equipment, radiation sources, high
voltage lines, child labor, employment in underground mines,
marriage licenses, motor vehicles and driver's licenses,
ignition interlock devices, pipelines, use of the state seal,
and emissions requirements; relating to the maximum fine
provided for violations and infractions and to the definition of
'minor offenses'; redesignating certain fish and game
misdemeanor offenses as class A misdemeanors; relating to
violations and offenses that are committed on state land, water,
and land and water or that are related to water management or
dam and reservoir safety; amending Rule 8(b), Alaska District
Court Rules of Criminal Procedure; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
HOUSE JOINT RESOLUTION NO. 4
Requesting the Federal Subsistence Board to reconsider its
decision regarding the subsistence fishery priority given to
Ninilchik residents.
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 186
SHORT TITLE: SPORT FISHING GUIDE RECORDS
SPONSOR(s): REPRESENTATIVE(s) HARRIS BY REQUEST
03/12/07 (H) READ THE FIRST TIME - REFERRALS
03/12/07 (H) FSH, RES
03/19/07 (H) FSH AT 8:30 AM BARNES 124
03/19/07 (H) Heard & Held
03/19/07 (H) MINUTE(FSH)
03/21/07 (H) FSH AT 8:30 AM BARNES 124
03/21/07 (H) Moved CSHB 186(FSH) Out of Committee
03/21/07 (H) MINUTE(FSH)
03/22/07 (H) FSH RPT CS(FSH) NT 4DP 2NR
03/22/07 (H) DP: JOHNSON, LEDOUX, EDGMON, SEATON
03/22/07 (H) NR: JOHANSEN, HOLMES
03/26/07 (H) RES AT 1:00 PM BARNES 124
03/26/07 (H) -- MEETING CANCELED --
03/28/07 (H) RES AT 1:00 PM BARNES 124
BILL: HB 128
SHORT TITLE: OIL & GAS PRODUCTION TAX: EXPENDITURES
SPONSOR(s): REPRESENTATIVE(s) OLSON
02/12/07 (H) READ THE FIRST TIME - REFERRALS
02/12/07 (H) O&G, RES, FIN
02/22/07 (H) O&G AT 3:00 PM CAPITOL 124
02/22/07 (H) Heard & Held
02/22/07 (H) MINUTE(O&G)
03/01/07 (H) O&G AT 3:00 PM CAPITOL 124
03/01/07 (H) Moved CSHB 128(O&G) Out of Committee
03/01/07 (H) MINUTE(O&G)
03/05/07 (H) O&G RPT CS(O&G) 3DP 1NR
03/05/07 (H) DP: DOOGAN, RAMRAS, OLSON
03/05/07 (H) NR: SAMUELS
03/19/07 (H) RES AT 1:00 PM BARNES 124
03/19/07 (H) Heard & Held
03/19/07 (H) MINUTE(RES)
03/21/07 (H) RES AT 1:00 PM BARNES 124
03/21/07 (H) Heard & Held
03/21/07 (H) MINUTE(RES)
03/23/07 (H) RES AT 1:00 PM BARNES 124
03/23/07 (H) Heard & Held
03/23/07 (H) MINUTE(RES)
03/26/07 (H) RES AT 1:00 PM BARNES 124
03/26/07 (H) -- MEETING CANCELED --
03/28/07 (H) RES AT 1:00 PM BARNES 124
BILL: HB 203
SHORT TITLE: KODIAK NARROW CAPE PUBLIC USE AREA
SPONSOR(s): REPRESENTATIVE(s) LEDOUX
03/14/07 (H) READ THE FIRST TIME - REFERRALS
03/14/07 (H) RES, FIN
03/28/07 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
TOM WRIGHT, Staff
Representative John Harris
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 186 on behalf of the sponsor,
Representative Harris by request.
DOUGLAS VINCENT-LANG, Special Projects Coordinator
Division of Sport Fish
Alaska Department of Fish & Game (ADF&G)
Anchorage, Alaska
POSITION STATEMENT: Provided information related to HB 186.
BERNARD HAJNY, Manager
Production Tax and Royalties Alaska
BP Exploration Alaska
Anchorage, Alaska
POSITION STATEMENT: Provided testimony focusing on specific
provisions of HB 128 and their impact on the new petroleum
production profits tax.
GARY ROGERS, Production Audit Manager
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 128, answered
questions.
MICHAEL HURLEY, Director
of State Government Relations
ConocoPhillips Alaska, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 128.
MICHAEL FRALEY, Tax Counsel
ConocoPhillips Alaska, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 128.
REPRESENTATIVE GABRIELLE LEDOUX
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 203.
SUZANNE HANCOCK, staff
Representative Gabrielle LeDoux
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 203 on behalf of the sponsor,
Representative LeDoux.
DICK MYLIUS, Director
Division of Mining, Land and Water
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 203, answered
questions.
BILL BURTON, Owner
Kodiak Game Ranch
Kodiak, Alaska
POSITION STATEMENT: During hearing of HB 203, suggested
including that existing grazing rights or leases be included as
one of the purposes of the Kodiak Narrow Cape Public Use Area.
ACTION NARRATIVE
CO-CHAIR CARL GATTO called the House Resources Standing
Committee meeting to order at 1:04:37 PM. Representatives
Gatto, Johnson, Roses, Guttenberg, Wilson, and Edgmon were
present at the call to order. Representatives Kawasaki,
Kohring, and Seaton arrived as the meeting was in progress.
HB 186-SPORT FISHING GUIDE RECORDS
1:04:54 PM
CO-CHAIR GATTO announced that the first order of business would
be HOUSE BILL NO. 186, "An Act relating to sharing with certain
federal agencies records required of sport fishing guides."
1:05:12 PM
TOM WRIGHT, Staff, Representative John Harris, Alaska State
Legislature, explained that HB 186 authorizes the department to
release records required of sport fishing guides to the National
Oceanic and Atmospheric Administration (NOAA) and the National
Marine Fisheries Service (NMFS). He expressed hope that this
would allow NOAA and NMFS to make better decisions regarding
allocation and law enforcement.
1:06:22 PM
DOUGLAS VINCENT-LANG, Special Projects Coordinator, Division of
Sport Fish, Alaska Department of Fish & Game (ADF&G), informed
the committee that when the department originally addressed
guide licensing and business licensing in the sport fish guide
industry, there was agreement to make the information
confidential. That agreement of confidentiality was made
because the logbook contained the client lists of the sport
fishing businesses. He said that there was never the intent to
not allow full enforcement of sport fish guiding around the
state. An example of that recently arose in the North Pacific
Fishery Management Council (NPFMC). In that case, the inability
to share logbook information with NMFS enforcement eliminated
the preferred alternative tool of both the sport fishing charter
industry and NPFMC, in terms of regulating the fishery to obtain
the guideline harvest level. Since the information couldn't be
shared, the federal program would have to institute its own
marine logbook program and the charter vessel operators would
have to have two logbooks onboard. He related that even
amending the statute as suggested in HB 186, the information
would have to remain confidential unless there's a violation and
the matter made it into the court system. Under the court
system, the information pertaining to the violation would be
public. Therefore, this legislation would merely allow sharing
of confidential information with NMFS enforcement and the
International Pacific Halibut Commission (IPHC) with the
understanding that they would keep it confidential except for
the enforcement of fishing regulations in the state.
1:09:17 PM
REPRESENTATIVE SEATON recalled that the original concern was
that the information remain confidential, which the committee
has been ensured is the case with this legislation.
Representative Seaton said that he's comfortable with [CSHB
186(FSH)].
1:09:49 PM
CO-CHAIR GATTO related his understanding that Representatives
Wilson and Edgmon agree with Representative Seaton's statement.
CO-CHAIR JOHNSON noted his agreement with this legislation.
CO-CHAIR GATTO then noted that the legislation is supported by
the Southeast Alaska Fisherman's Alliance.
1:10:42 PM
CO-CHAIR GATTO, upon determining that no one else wished to
testify, [announced that public testimony was closed].
1:10:52 PM
CO-CHAIR JOHNSON moved to report CSHB 186(FSH) out of committee
with individual recommendations and the accompanying zero fiscal
notes. There being no objection, it was so ordered.
HB 128-OIL & GAS PRODUCTION TAX: EXPENDITURES
1:11:18 PM
CO-CHAIR GATTO announced that the next order of business would
be HOUSE BILL NO. 128, "An Act relating to allowable lease
expenditures for the purpose of determining the production tax
value of oil and gas for the purposes of the oil and gas
production tax; and providing for an effective date." [Before
the committee was CSHB 128(O&G), as amended at the March 23,
2008, hearing.]
1:12:44 PM
BERNARD HAJNY, Manager, Production Tax and Royalties Alaska, BP
Exploration Alaska, paraphrased from the following written
testimony [original punctuation provided]:
I would like to clarify that my testimony today
focuses on the specific provisions of HB 128, and
their impact on the new Petroleum Production Tax, or
"PPT," from my perspective as someone within BP
charged with complying with it. I am a tax
professional, and not an expert in Oil Transit Lines,
corrosion, pipeline operations or pigging; and it
would be inappropriate for me to talk about those
areas. I am here to talk about House Bill 128 and its
implications for BP as one of Alaska's largest
taxpayers.
Last month senior BP technical and operations
management, Tony Brock and Mike Utsler, updated the
Legislature on the status of our efforts to address
the issues we discovered at Prudhoe Bay last year. I
can confirm that both Tony and Mike are available in
the future should this Committee require further
updates on the technical and operations issues
relating to Prudhoe Bay.
1:14:18 PM
There are two slides for my presentation today, which
are printed out on the front and back of a one-sheet
handout that has been distributed to you. Please look
at the first slide on my handout, which is the one
entitled "BP Presentation to the House Resources
Committee."
The PPT is working for the State of Alaska, and I mean
"working" in three senses of the term. First, it is
"working" in the sense that the PPT regulations by the
Department of Revenue clarify in several crucial ways
how the pieces of the PPT fit together. Taxpayers know
what is expected of them in computing and making
monthly installment payments, and in making the annual
true-up on March 31st of the following year.
Second, the PPT is "working" in the sense of providing
a major increase in state production tax revenues last
year. For BP, its production tax nearly tripled from
about $180 million under the old [economic limit
factor] ELF-based tax for the last nine months of last
year, to over $500 million under the PPT for those
months. This is fully in line with the Legislature's
expectations about the PPT's revenue effects.
Third, the PPT has promise to "work" in response to
the question on my slide that asks, "Will Alaska
attract sufficient investment to stem production
decline?" The bulk of the known and likely
opportunities in Alaska for investing in production
are concentrated in the existing fields - that is,
investing to slow their decline, to increase the
ultimate recovery from them, and to discover ways to
develop and produce the 20+ billion barrels of heavy
and viscous oil that are already known. The PPT is
significantly better suited for this future than the
ELF ever was. In addition, through its credit for
capital expenditures, it provides an investment
incentive that was absent from the old ELF-based tax.
1:16:29 PM
MR. HAJNY continued:
But even though the PPT structurally has promise in
attracting the new investment that will be needed to
deal with the threat of declining production, BP
believes the PPT is suboptimal for the State because
the tax rate is too high. If you will look at my
second slide - the graph on the back of the one-page
handout - you will find Alaska at the wrong end of the
spectrum in terms of government "take" at the margin.
Investments in Alaska must compete successfully
against opportunities elsewhere, and by lowering the
PPT rate Alaska would increase the competitiveness of
its investment opportunities. The production from
those investments will, we are convinced, increase the
total revenues from Alaska's property and income taxes
and royalties by more than any reduction in the PPT
that might result.
1:17:26 PM
Now, I would ask you please to turn back to the slide
on the front of the handout. HB 128 would introduce
unnecessary uncertainty into the PPT. We agree with
the AOGA testimony given by Judy Brady about the
overlap between existing terms in the PPT and the new
standard of "improper" maintenance under this Bill,
which either makes the Bill unnecessary or means its
enactment will create serious ambiguities. I will not
repeat that testimony now.
Those questions about what constitutes "improper"
maintenance only deal with the matter of when the new
provisions of HB 128 would be triggered. What I would
like to focus on is what happens under HB 128 after
that trigger is pulled. So I'd ask you to imagine a
hypothetical future situation that indisputably arises
from improper maintenance.
1:18:15 PM
MR. HAJNY continued:
If you look at page 3 of the Bill, beginning at line
23, you will see three subparagraphs in paragraph (19)
that are designated "(A)", "(B)" and "(C)". It is
these subparagraphs that specify what happens after
the improper-maintenance trigger is pulled.
For the moment I would like to skip over subparagraph
(A) in order to talk about (B) and (C), which raise
questions about sound tax policy. Then I'll come back
to (19)(A), which presents an entirely different kind
of issue.
Subparagraph (19)(B) disallows any costs determined by
the Commissioner of Revenue to have been "incurred to
maintain the operational capability of facilities or
equipment shut down because of ... improper
maintenance of property or equipment[.]"
The first thing to note is that the disallowance is
not limited to stand-by costs for keeping up the
operational capability of the property or equipment
that was improperly maintained. When you read the
Bill closely, you see that what is disallowed are the
costs of sustaining the operational capability of
shut-down "facilities or equipment", while the trigger
is improper maintenance of "property or equipment"
(emphasis added). Because these phrases are different,
they cover different things. In other words, (19)(B)
would permit disallowance of all costs of standing by
and staying ready to resume production - even the
portion of stand-by costs for facilities and equipment
that were properly maintained.
1:19:51 PM
MR. HAJNY continued:
Does this make sense? (19)(B) penalizes spending money
to "maintain ... operational capability" by
disallowing those costs. I hope that we would want a
field to get back up and running as soon as possible
after a shut-down, but (19)(B) will be an obstacle to
that.
Subparagraph (19)(C) similarly disallows costs
determined by the Commissioner of Revenue to be
"incremental operating expenses incurred as a result
of operating facilities or equipment at diminished
capacity when that diminished capacity is caused by
... improper maintenance of property or equipment."
Here, again, the disallowance is not limited to
diminished capacity of the "property or equipment"
that was improperly maintained, but includes
diminished capacity of any "operating facilities or
equipment"(emphasis added).
Does this make sense from a tax policy point of view?
Again, I don't think so. Subparagraph (19)(C) is
effectively saying that if it costs more to run a
field at diminished capacity, the State will deter a
producer from doing so by disallowing those costs. I
should think that having part of a field in
production, even at a higher-than-normal operating
cost, is better than having it completely shut down -
especially in light of state royalties and income tax
which are both enhanced by keeping the field in
production. If anything, (19)(C) should be reducing
the PPT as an incentive for keeping as much of a field
in production as possible, but it does precisely the
opposite instead.
Thus, I submit, both (19)(B) and (19)(C) go off in
exactly the wrong direction from what is sound tax
policy for the State, and both of them should be taken
out of the Bill.
1:21:40 PM
MR. HAJNY continued:
This gets me back to subparagraph (19)(A) on page 3 of
the Bill at lines 23 - 24. Under this subparagraph
any costs determined by the Commissioner of Revenue to
be "related to the repair or replacement" of the
improperly maintained property or equipment are
disallowed. The problem with this new disallowance is
that it "double-dips" on the flat-rate 30 cents-a-
barrel disallowance under paragraph (18). Judy Brady
has explained how this 30-cent disallowance by Pedro
van Meurs was directed at exactly the same issue that
(19)(A) addresses, and how the Senate Special
Committee on Natural Gas Development then rejected a
proposal like (19)(A) twice in favor of the van Meurs
flat rate disallowance in paragraph (18). I will not
repeat those details now.
Even paragraph (18) went too far and was ill-advised.
Other provisions in the PPT law already address, and
deal with, the questions about adequate maintenance,
and do so in a fair and reasonable way. If the
objective is to make the PPT a better law for the
future, then HB 128 should repeal paragraph (18).
Instead, the Bill proposes to compound the error not
only by keeping paragraph (18), but also by adding
subparagraph (19)(A) to double-dip on the very same
costs that paragraph (18) already disallows.
This concludes our testimony on HB 128. Thank you
again for this opportunity to appear before you.
1:23:15 PM
MR. HAJNY, in response to Co-Chair Gatto, explained that the
$.30 is calculated such that $.30 a barrel is multiplied by the
total number of barrels produced. That dollar amount reduces
both the capital expenses and the lease expenditures, and thus
reduces the opportunity for a deduction and a credit.
Therefore, it reduces the deduction against the 22.5 percent tax
rate as well as against the 20 percent credit. He recalled that
Dr. van Meurs estimated that the $.30 will amount to about $40
million at 900,000 barrels a day; $40 million that the industry
wouldn't be allowed to deduct as costs or to obtain as credits
under the PPT. He opined that Dr. van Meurs was trying to point
out that there are going to be expenditures dealing with
maintenance and specific issues for which the $.30 is to
address.
1:26:09 PM
REPRESENTATIVE WILSON, referring to paragraph (18) on page 3,
lines 13-18, pointed out that in the future there will be
increases in inflation and increased costs to fix things.
Therefore, it's probably not in the state's best interest to
leave it as a flat amount because in the long-term someone will
be responsible for paying the remainder beyond the flat rate.
1:27:19 PM
CO-CHAIR GATTO asked if BP made more money the year the
petroleum production profits tax (PPT) was implemented, even
though the taxes tripled.
MR. HAJNY responded that BP estimates that its taxes would
nearly triple from $180 million under the ELF to over $500
million [under the PPT]. However, he said that he didn't know
BP Alaska's net income or income figures during that same period
for 2006. He acknowledged that oil prices were higher in 2006
than in the prior year.
1:28:50 PM
CO-CHAIR GATTO commented that he was curious as to whether the
state and the companies both made money under the PPT. He said
that he's trying to ascertain whether the effect of the PPT was
truly devastating or somewhat negative.
MR. HAJNY explained that the point BP tried to make last year
during the PPT hearings was that increasing the tax won't make
Alaska more competitive in the basins where oil and gas is
produced. In further response to Co-Chair Gatto, Mr. Hajny
pointed out BP's graph shows that the marginal take for Alaska
is higher than the provinces, which are generally oil and gas
provinces, that BP has represented.
1:29:56 PM
CO-CHAIR GATTO asked if the federal government also made more
money as compared to the prior year.
MR. HAJNY surmised that if the net income rises, the tax rate
would increase.
CO-CHAIR GATTO opined then that part of the government take is
an increase in the federal government take, not just the state
government's take.
MR. HAJNY replied yes, adding that all provinces would've risen
at the same level.
1:30:44 PM
REPRESENTATIVE SEATON referred to the chart from BP titled
"Alaska has adopted the highest marginal tax rate in North
America". He asked whether the chart for Colorado, Kansas, and
Texas included the private royalties that are paid.
MR. HAJNY replied yes, and specified that the chart includes a
one-eighth or 12.5 percent royalty across the board in order to
have an apples-to-apples comparison.
1:31:17 PM
REPRESENTATIVE SEATON, referring to paragraph (19) on page 3,
asked if shut downs due to preventive maintenance could be said
to have been due to improper maintenance, and thus the
incremental cost of operating the field with a portion of wells
shut down wouldn't be deductible.
MR. HAJNY replied yes. Therefore, BP reads the legislation such
that if an auditor determines that a portion of a piece of
equipment was improperly maintained or installed, the operating
costs while the field is down could be disallowed as deductible
expenses.
1:32:51 PM
REPRESENTATIVE SEATON related his understanding that quite often
a portion of a field's wells are shut down for maintenance. He
surmised then that if it's determined that wells were shut down
because they should've been maintained differently, then the
incremental costs of operating the field wouldn't be deductible.
MR. HAJNY noted his agreement with Representative Seaton. For
example, in a situation in which a seal or gasket was installed
backwards, the language in [paragraph (19)] says that the cost
associated with the whole compression facility could be
disallowed as well as the associated operating costs while the
company tries to fix it.
1:34:42 PM
CO-CHAIR JOHNSON asked if the $.30 is deductible for the
company's federal income taxes.
MR. HAJNY clarified that the $.30 is an ordinary cost of doing
business and would be deductible.
1:35:20 PM
CO-CHAIR JOHNSON inquired as to whether the rest of the
maintenance would fall under the category of a regular business
expense and be deductible from the federal income tax.
MR. HAJNY, noting that he is not a federal income tax expert,
related his understanding that these would normally be
deductible costs.
1:35:53 PM
CO-CHAIR JOHNSON asked:
Will that effect the 67 percent take - if you get to
deduct these expenses from your federal income tax,
will that reduce that take? ... If I understand you,
the $.30 is deductible, the maintenance ... that is
performed ... regardless how ... we categorize the
maintenance. Will that deduction decrease the 67
percent, in your opinion?
MR. HAJNY answered that he didn't know.
1:36:32 PM
CO-CHAIR GATTO surmised that if a company has $1 worth of
maintenance and the state doesn't allow the $.30, the company
spends the $1 and the company declares the $1.
1:37:24 PM
CO-CHAIR JOHNSON inquired as to why the company wouldn't declare
$1.30 since the $.30 is already included as a regular part of
daily business.
CO-CHAIR GATTO noted his disagreement, stating that the $.30 is
a fictitious number until the company pays a bill. The $.30 is
only allowed to offset an expense. Therefore, if the company
doesn't offset an expense, the $.30 never existed, he opined.
1:38:22 PM
MR. HAJNY related his understanding that the costs are
determined under the Internal Revenue Service (IRS) guidelines
and not subject to what occurs under the PPT.
1:39:10 PM
GARY ROGERS, Production Audit Manager, Tax Division, Department
of Revenue (DOR), related his understanding that $1 spent,
expense or capital, the IRS recognizes that as a $1 expenditure.
The IRS doesn't recognize the $.30 that's a disallowance of that
$1 for the PPT.
1:40:20 PM
REPRESENTATIVE SEATON clarified that the deductions can be taken
against the PPT, federal income tax, and the state's corporate
income tax. Therefore, these aren't mutually exclusive
deductions. The only way to achieve a higher amount, he opined,
is based on the credits that are allowed for capital. When the
credits are allowed, an entity can receive a credit portion of
that entity's investment. In that some additional tax can be
achieved, he noted.
1:41:22 PM
CO-CHAIR GATTO reminded the committee that this is really about
defining improper maintenance. He said he's depending on the
testimony from the companies to relate what they believe
constitutes proper maintenance.
1:43:35 PM
REPRESENTATIVE ROSES recalled testimony in which there was
discussion regarding the following four categories of
negligence: intentional or willful neglect; gross negligence or
disregard to the consequences that could occur; ordinary or
common negligence; and strict liability. The testimony seemed
to indicate that HB 128 is creating a definition of ordinary or
common negligence and the result of that. Representative Roses
opined, "I think part of what we're getting to here is trying to
define what occurred by plugging up what we see as a loop hole."
He then asked if during a partial shut down for regular
maintenance, a company would replace equipment that is found to
be faulty or leave it until it stops working.
MR. HAJNY said that he would be venturing into an area in which
he's not familiar.
1:46:55 PM
REPRESENTATIVE ROSES related his guess that the company would
probably replace that faulty equipment. If the company didn't
replace it, he opined that it would be ordinary and common
negligence. According to this legislation, the company in such
a circumstance wouldn't be able to deduct any of the costs
related due to the partial shut down. On the surface
Representative Roses noted his agreement with Mr. Hajny that
this is a bit excessive in that the state encourages maintenance
but punishes the company when it does. Furthermore,
Representative Roses said that he isn't fond of retroactivity.
1:48:09 PM
REPRESENTATIVE GUTTENBERG requested further explanation
regarding Mr. Hajny's assertion that the PPT had higher
incentives for investment than the ELF.
MR. HAJNY clarified that he's referring to the deductibility of
the expenses and the credits associated with capital
expenditures. The intent appeared to be to incentivize
investment, and therefore try to incentivize investment that
would stem the decline in Alaska, he related. In further
response to Representative Guttenberg, Mr. Hajny said that he
didn't know what the world average is; the point of the slide is
that Alaska would be well-served to move in the direction that
the Gulf of Mexico, Canada, and Alberta are with regard to their
tax regimes and marginal rates.
1:50:02 PM
REPRESENTATIVE SEATON, referring to page 3, line 19, inquired as
to Mr. Hajny's understanding of the "costs" as a standard. He
then asked if there's a criteria or is it merely a determination
that the commissioner can make at any given time.
MR. HAJNY said that Representative Seaton has identified the
biggest issue, the potential ambiguity and uncertainty, that BP
has with this legislation.
1:51:29 PM
REPRESENTATIVE SEATON inquired as to how [the companies] will
project the replacement and maintenance of equipment since these
characteristics are not going to be incident driven but rather
audit driven. He recalled that DOR has said that one of the
criteria used by an auditor would be a high expense. "Do you
feel that under this, it's going to be necessary to maintain
that piece of equipment that's been replaced so that you can
verify that you didn't replace it because it was improperly
maintained," he asked. He explained that he's trying to address
how to determine whether or not something was properly
maintained or not since this is likely driven by an audit or tax
return and will be a capital expenditure, "it will be long
gone."
MR. HAJNY confirmed that the aforementioned, the fact that the
audits are retrospective, is one of the difficulties companies
will have with administering this. Companies will deduct costs
and apply credits associated with expenditures as they are
spent. The determination of whether that was replaced due to
improper maintenance would potentially be determined years
later. Trying to provide information that would prove equipment
was properly maintained accompanied with the burden that the
companies would be against during the audit could be difficult
to document.
1:54:03 PM
CO-CHAIR GATTO commented that this reminds him of court hearings
in which one can only be proven to be not guilty, not innocent.
1:56:27 PM
MICHAEL HURLEY, Director, of State Government Relations,
ConocoPhillips Alaska, Inc., said that he would discuss
ConocoPhillips Alaska, Inc. (ConocoPhillips) opposition to HB
128. As discussed in a prior hearing, Mr. Hurley opined that
it's appropriate for the legislature to determine what it wants
to allow or disallow under the PPT. However, Mr. Hurley said
that he believes the $.30 can be shown as related to and, in
fact, because of the incidents that occurred at Prudhoe Bay.
The current legislation seeks to duplicate that disallowance in
a different way. He suggested that the legislature has the
responsibility to decide which way to disallow it.
1:58:38 PM
REPRESENTATIVE WILSON interjected that she misspoke earlier and
in fact it's the opposite of what she said.
1:58:52 PM
MICHAEL FRALEY, Tax Counsel, ConocoPhillips Alaska, Inc.,
related that ConocoPhillips opposes HB 128 for multiple reasons.
The first reason is that ConocoPhillips believes HB 128 is a
targeted tax. He pointed out that AS 43.56.165(e) includes
numerous exclusions that reduce lease expenditures. Those
disallowances of the lease expenditures were discussed
throughout the regular session as well as three special
sessions. It wasn't until the August 3, 2006, special session
that AS 43.56.165(e)(18) was discussed, which was after the oil
spill became public. He noted that AS 43.56.165(e)(19) was also
discussed at the time, but ultimately the legislature decided to
implement AS 43.56.165(e)(18), which is a broad disallowance
versus a narrowly tailored disallowance. Mr. Fraley opined that
a targeted tax is a bad way to set tax policy. Second, it's too
early to reopen the PPT as companies are just now filing final
returns for the last nine months of 2006. Furthermore,
regulations have not yet been promulgated. Third,
ConocoPhillips believes that existing statute already covers the
issue addressed by HB 128.
2:01:56 PM
MR. HURLEY, referring to the document titled "30 Cents per
Barrel Disallowance Example", explained the PPT calculation and
reviewed an example of the PPT under ConocoPhillips' average
barrel of oil last year, which was $62.66. In response to Co-
Chair Gatto, Mr. Hurley specified that the tariff was taken out
prior to arriving at the $62.66, which is the value of the oil
at the lease line. He explained that the value on the West
Coast minus transportation gets to the lease line, the point at
which the costs and investments are subtracted. In the
calculation, the tariff last year was in the range of $4.25-
$4.50. In further response to Co-Chair Gatto, Mr. Hurley
specified that the interstate rate is currently between $5.00-
$5.50. Mr. Hurley confirmed that the [interstate rate] is still
an issue that's being resolved.
2:04:49 PM
MR. HURLEY continued his review of the PPT calculation in the
case of an average barrel of oil at $62.66, which results in
$9.98 a barrel of tax, absent other items. He noted that the
tax is actually higher than that because of the surtax. When
the $.30 comes into play, it's subtracted from the investment
and that's what the company is allowed to claim on its PPT tax
return although it spent $.30 more than is allowed. The final
tax return in this example illustrates that the $.30 is deducted
in two places, and thus instead of paying $9.98 in severance
tax, ConocoPhillips would pay $10.11 because of the $.30
disallowance.
2:06:53 PM
CO-CHAIR GATTO surmised then that in this example with the $.30
disallowance, ConocoPhillips' tax increased by 1 percent.
MR. HURLEY specified that the tax increase was on 111 million
barrels, which amounts to about $14.5-$15 million in this
example.
2:07:42 PM
MR. FRALEY highlighted that ConocoPhillips will experience
additional impacts, such as the 10 percent tie credit. The tie
credit will be reduced for the first five to six years.
Furthermore, any progressivity would create an additional
impact. For simplicity, the aforementioned wasn't included in
the example.
MR. HURLEY explained that [AS 43.56.165(e)(18)] is already in
law to address maintenance.
2:08:31 PM
REPRESENTATIVE ROSES inquired as to the percentage of costs in
the first part of the formula that would be attributed to
maintenance.
2:08:52 PM
MR. HURLEY said it would depend on the field. For example, a
field such as Prudhoe Bay that started in the 1970s would have a
more significant portion of maintenance costs versus a
relatively new field such as Alpine. He clarified that the
numbers utilized in the example are an average number across all
of ConocoPhillips' fields.
2:09:31 PM
REPRESENTATIVE ROSES inquired as to the overall costs that are
attributable to maintenance.
MR. HURLEY said that he doesn't know. In further response to
Representative Roses, Mr. Hurley said he would hope that if the
incident-by-incident approach outlined in HB 128 is used, it
wouldn't get rid of all maintenance. The department would have
to show what sorts of things were improperly maintained.
2:10:51 PM
REPRESENTATIVE ROSES posed a situation in which half of
ConocoPhillips' cost is maintenance, included in which are labor
costs, and only half of it was attributable to some sort of
negligence or shut down. The aforementioned would amount to
only one-fourth of that. However, if the $9.98 was disallowed
under the normal deduction of cost, the cost of that barrel
would be increased by an additional $.35. Representative Roses
opined that if ConocoPhillips is going to testify as to the
financial impact this proposal will have on the company, at a
minimum he said he expected some of the numbers would be
available. He said that he's trying to get a realistic estimate
as to what percentage of the costs are maintenance and when must
a shut down occur to perform regular maintenance. Those are the
times in which the possibility of an audit could trigger the
company's inability to deduct the costs because of being
shutdown due to negligence.
MR. HURLEY explained that when he used this example, it wasn't
intended to make a case about how large the number is. The
example was only for illustrative purposes regarding how the
disallowance works.
2:13:56 PM
REPRESENTATIVE SEATON surmised then that the example only
relates to AS 43.55.165(e)(19)(A), the cost of maintenance, but
not to AS 43.55.165(e)(19)(B) or AS 43.55.165(e)(19)(C), which
have to do with the costs of operation if something was
determined to be improperly maintained. Therefore, the $.30
can't be related to direct cost because it's the cost of the
nonmaintained items, plus a shut down or reduced operating
expenses.
2:14:46 PM
MR. HURLEY clarified that $.30 isn't in AS 43.55.165(e)(19) at
all, but rather in existing law in AS 43.55.165(e)(18). He
further clarified that the aforementioned already exists and is
deducted from the PPT filings every month. Therefore, HB 128
includes an additional disallowance on an incident-by-incident
basis based on subsections (a)-(c) over and above the $.30
that's already being disallowed.
2:15:44 PM
CO-CHAIR GATTO recalled that Mr. Fraley objected to HB 128
because it's a targeted tax. Co-Chair Gatto pointed out various
taxes that are targeted taxes, including the cruise ship tax,
the fuel tax, the tire tax, a business license, a sales tax, or
income tax. He asked Mr. Fraley to name some taxes that aren't
targeted.
MR. FRALEY remarked that the taxes Co-Chair Gatto mentioned are
generally applicable to the industry, and therefore aren't
targeted taxes. He related that his definition of a targeted
tax is one in which the tax is created due to a specific
instance.
2:16:47 PM
REPRESENTATIVE GUTTENBERG inquired as to the level of incidence
to which something has to arise and cause this to go into
effect.
MR. FRALEY commented that one of the problems ConocoPhillips has
with HB 128 is that it is unknown; no certainty is involved.
"There's an imprecise standard, and then on top of that we don't
know it's going to be applied and how it's going to be applied,"
he opined. Therefore, it's an unknown cost for ConocoPhillips
and contributes to the opposition to HB 128.
2:17:53 PM
REPRESENTATIVE GUTTENBERG reminded everyone that last year when
the PPT was passed, the general assumption was that the
incidents causing these (indisc.) and repair costs weren't going
to be deductible. However, now the legislature is being told
that they will be deducted. He then recalled hearing that under
the old ELF program there were few incentives and that when
companies had cash in hand, they [didn't deduct the repair
costs]. However, there was an incident when the companies had
cash in hand and the proper maintenance wasn't performed. He
opined that to reach a level at which this would kick in, it
would have to be a fairly high level. The concern, he opined,
is when the field shuts down, the pipe is corroded, and a
significant amount of revenues are impacted.
2:20:18 PM
REPRESENTATIVE SEATON directed attention to page 3, line 19, and
inquired as to whether that language has any direction with
regard to what will be disallowed.
MR. FRALEY echoed earlier comments that the language seems
ambiguous and penalizes an operator who tries to maintain
facilities and equipment even when there's a shutdown. He
stressed that operators who operate at a reduced capacity will
be penalized for doing so.
2:21:20 PM
REPRESENTATIVE SEATON surmised then that within the legislation
there's no standard or direction for a determination.
MR. HURLEY noted that they never reached their fourth point,
which is that some of the ambiguity in the way in which the
legislation is constructed is troublesome and that is one. He
pointed out that portion of cost doesn't provide a guide as to
which portion of the costs "we're trying to figure out." He
highlighted that it's difficult to tell what portion of the
costs are from improper maintenance or regular wear and tear.
The aforementioned is impossible to know, and thus companies
wouldn't know how to file their returns and thus would have to
be brought forth under an audit that occurs later when the
different standard is applied.
2:22:51 PM
MR. FRALEY turned to ConocoPhillips' third point, which is that
there are already protections in statute. For example, AS
43.55.165(e)(16) disallows the deduction of any oil spill
cleanup costs. Furthermore, AS 43.55.165(e)(6) discusses gross
negligence and any maintenance issue due to gross negligence
wouldn't be deducted either.
2:23:17 PM
CO-CHAIR GATTO related his understanding when a company has oil
spill cleanup costs, it would have to have in place much
equipment in order to perform the cleanup. Therefore, he asked
if the industry of cleaning up the oil would be part of the
capital expenses that are all deductible.
2:23:41 PM
MR. HURLEY clarified that [cleanup equipment] is part of the
companies' normal operating costs. The company pays for
response vessels through a co-op amongst the different operators
such that it's available when an incident actually happens.
When there is an incident and vessels and cleanup products are
used, the company with the spill has to resupply the co-op with
all the items that it used, which isn't a deductible PPT
expense. In further response to Co-Chair Gatto, Mr. Hurley said
that the cleanup items were purchased several years ago.
2:25:09 PM
MR. FRALEY then directed attention to a handout titled
"Disallowing 'deemed capital maintenance' costs" which offers
another explanation of how AS 43.55.165(e)(19) works. He noted
that this information was derived from Pedro van Meurs August 8,
2006, letter. He highlighted the following quote from Dr. van
Meurs, "I believe that this would provide a good answer to
possible public criticism that under the PPT we would provide 50
percent of the replacement costs of pipelines as a result of the
Prudhoe Bay shut down."
2:26:17 PM
REPRESENTATIVE ROSES remarked that there are parts of this
legislation that he doesn't like at all. He noted that he
agrees that there is already negligence and other factors in
place that disallow [the deduction of the costs of improper
repair and/or maintenance]. This legislation places the
negligence at the level of ordinary negligence, which is a
lesser requirement of proof for negligence. He said that he is
seeking numbers that relate the tax ramifications on a per
barrel basis as it provides something by which to weigh the
ideas.
MR. FRALEY offered to provide the committee information with
regard to the percentage of maintenance costs, noting that as a
field ages there are more maintenance costs for those fields.
With regard to how much of the maintenance costs will be
disallowed, Mr. Fraley reiterated that he doesn't know. With
regard to the actual language of the legislation, AS
43.55.165(e)(19) seems to specify that the final arbiter will be
accountants and attorneys at DOR rather than engineers at the
Alaska Oil and Gas Conservation Commission (AOGCC), which
creates further uncertainty.
2:29:07 PM
REPRESENTATIVE GUTTENBERG surmised that there's a problem with
defining with what's allowable and what's disallowable as well
as what triggers the aforementioned. He indicated the
possibility of requiring every regularly scheduled shut down to
be reported and thus an unexpected shut down would cause a
review into whether the proper maintenance was being performed.
2:30:22 PM
MR. HURLEY expressed concern that even if all the appropriate
maintenance is performed, equipment could still fail. He opined
that the investigation of all equipment failures would amount to
a lot.
REPRESENTATIVE GUTTENBERG questioned the [feasibility] of
investigating shut downs that result in the loss of revenue. He
acknowledged that incidents occur all the time, but last year's
leak due to corrosion wasn't normal.
MR. HURLEY commented that last year's leak was extraordinary.
2:31:19 PM
CO-CHAIR GATTO appointed a subcommittee of the following
members: Representative Johnson, Chair, and Representatives
Wilson and Guttenberg.
2:31:44 PM
CO-CHAIR JOHNSON said that he is terribly uncomfortable making
any decisions on HB 128 until some real numbers are available.
He expressed the desire to have tax returns and the actual
expenses and what DNR has decided.
[HB 128 was held over.]
HB 203-KODIAK NARROW CAPE PUBLIC USE AREA
2:32:27 PM
CO-CHAIR GATTO announced that the final order of business would
be HOUSE BILL NO. 203, "An Act creating the Kodiak Narrow Cape
Public Use Area."
2:33:20 PM
REPRESENTATIVE GABRIELLE LEDOUX, Alaska State Legislature,
speaking as the sponsor of HB 203, informed the committee that
it should have a proposed committee substitute (CS), which was
necessitated by some changes to the legal description in the
original legislation.
2:34:18 PM
SUZANNE HANCOCK, Staff, Representative Gabrielle LeDoux, Alaska
State Legislature, explained that HB 203 sets aside a very
special area of Kodiak for public use. Currently, there are
five public use areas recognized in state law, the most recent
is the Knik River Public Use Area. The Narrow Cape area of
Kodiak has a long history of public use from beach combing to
surfing.
REPRESENTATIVE LEDOUX interjected that Kodiak is a popular
destination for extreme surfers.
MS. HANCOCK informed the committee that there is footage of
Kodiak in the movie "Endless Summer II". She then informed the
committee that Narrow Cape has an area referred to as Fossil
Beach, where rocks bear the imprint of leaves from previous
centuries. In fact, the committee packet includes a prize-
winning photo and essay from a local Kodiak student regarding
Fossil Beach. The area is also the home of the Kodiak Launch
Complex. A few years ago there was an initiative to transfer
this land to the University of Alaska, which triggered a review
of possible steps to recognize and protect the important public
use value of this land. Creation of a public use area will
require the adoption of a management plan for the area, which
should help manage any usage conflicts and ensure the important
multiple use of the area.
2:37:45 PM
CO-CHAIR JOHNSON asked if this fits within the coastal
management plan.
MS. HANCOCK deferred to the borough manager.
2:38:03 PM
REPRESENTATIVE WILSON asked if this legislation would prevent
any activity from happening that currently does.
MS. HANCOCK specified that all who regulate land use will
continue to do so under HB 203, unless through the management
plan other things are determined.
2:38:46 PM
REPRESENTATIVE WILSON surmised that if the Narrow Cape area is
set aside, no hunting would be allowed in the area.
2:38:57 PM
CO-CHAIR GATTO recalled when the Knik River Public Use Area was
set aside, it didn't prevent fishing or any other use. Since HB
203 is modeled after the Knik River Public Use Area, he surmised
that similar restrictions or nonrestrictions exist.
2:39:49 PM
REPRESENTATIVE KAWASAKI inquired as to the difference in the
definition of a public use area versus a refuge, a sanctuary, or
a critical habitat area. He then inquired as to whether an
inclusive or exclusive list of what's allowed in a public use
area would be necessary.
MS. HANCOCK deferred to the Department of Natural Resources
(DNR).
2:40:37 PM
DICK MYLIUS, Director, Division of Mining, Land and Water,
Department of Natural Resources, explained that a public use
area is an area of state land that the legislature sets aside
for retention or state ownership in order to accommodate a large
number of multiple uses. The key component of a public use area
is that it's to be retained in state ownership. Therefore, the
disposal of the land is prohibited. The land remains state land
and is managed by the Division of Mining, Land and Water for
multiple use, including mining, oil and gas, hunting, and
fishing. A public use designation, he noted, often identifies a
higher level of management of the area and thus the division may
be more active in managing public use areas as is the case with
the Knik Public Use Area. Mr. Mylius said that the public use
designation wouldn't significantly change how the area is
managed. About three years ago the Kodiak area land use plan
was completed. The management proposed in the public use area
is very similar to that outlined area plan. He mentioned that
the area land use plan didn't identify any land disposals in the
area. The legislation makes the determination in the land use
plan permanent.
2:43:18 PM
CO-CHAIR GATTO asked if a person with in holdings would be
protected from losing his/her property.
MR. MYLIUS replied yes, and specified that the public use area
only applies to state land. There are specific provisions
included in HB 203, including the provision specifying that the
state cannot use eminent domain to acquire any private in
holdings. There is another provision in HB 203 that
specifically provides access to in holdings. In terms of
enforcement, Mr. Mylius pointed out that the Knik Public Use
Area legislation included specific enforcement language that was
given to DNR, which isn't currently provided on state land.
Therefore, a higher level of enforcement was provided for the
Knik Public Use Area. He further pointed out that there is no
such provision in HB 203, but it's addressed in HB 194.
2:44:30 PM
REPRESENTATIVE SEATON, referring to page 3, subsection (f),
opined that there seems to be a mechanism for determining uses
that cannot be done in the proposed Kodiak Narrow Cape Public
Use Area. He asked if there could be a challenge that there's
an incompatible use that would place at risk any of the existing
uses. For instance, he surmised that mining, although allowed,
would be challenged under this compatibility standard.
MR. MYLIUS stated that although the legislation specifically
protects certain types of uses, such as the rocket launch
facility, those uses can be restricted within certain areas
through a land use plan. A land use plan requires a very public
process. He noted that the mechanism for preventing mining
would be a mineral closing order. The purpose for doing a
management plan is so that existing uses can be reviewed and
there's a mechanism for addressing conflicts.
2:46:57 PM
CO-CHAIR GATTO, referring to a color photo in the committee
packet, noted that there is denotation of a ranch and a landing
strip. He asked if that landing strip is merely a dirt runway
or something that may ultimately be extended to accommodate more
use.
MR. MYLIUS confirmed that it's a dirt landing strip, which he
said he wasn't sure whether it's on state land or within the
private in holding of the Kodiak Ranch. In further response to
Co-Chair Gatto, Mr. Mylius specified that the Alaska Aerospace
Development Corporation has very specific rights to some
property [within the proposed Narrow Cape Public Use Area], but
those won't be compromised by the legislation as they are
existing rights. The Alaska Aerospace Development Corporation
is a state agency that has an interagency land management
agreement with DNR. Therefore, the corporation has the right to
use the land for specific things and the ability to make certain
land use decisions on its own within the property, subject to
what's specified in the agreement.
2:48:23 PM
REPRESENTATIVE GUTTENBERG highlighted the fiscal note for
$150,000 over two years, which includes analysis specifying that
the existing Kodiak Area Plan for State Lands adopted in 2004
may be sufficient to address the current public land use issues
in the area. Therefore, he inquired as to the point of the
fiscal note.
MR. MYLIUS pointed out that the legislation requires that the
department perform a management plan, and therefore the fiscal
note outlines the potential cost. However, the recent
completion of the Kodiak Area Plan seems to address most of the
immediate issues, and therefore the department doesn't see a
burning need to perform a management plan. One option is to
delete the requirement for a management plan from the
legislation. He noted that the aforementioned wouldn't preclude
the department from doing a management plan in the future.
2:49:53 PM
REPRESENTATIVE WILSON inquired as to the reason section 15 was
included as part of the Kodiak Narrow Cape Public Use Area.
MR. MYLIUS responded that he wasn't sure of the reason it was
included. He suggested that perhaps it would follow the land
encompassed by a grazing lease or the land immediately to the
north may not be state land. He offered to check that.
2:51:01 PM
BILL BURTON, Owner, Kodiak Game Ranch, informed the committee
that he [has owned] the Kodiak Game Ranch, which raises buffalo,
elk, yak, cattle, and horses, for around 40 years. Hunters and
fishermen are taken in on horseback. The property includes a
bunkhouse and leases a lodge for the launch facility. He
confirmed that the ranch also includes a grass strip for private
use. In response to Co-Chair Gatto, Mr. Burton specified that
the landing strip is primarily for the Kodiak Game Ranch.
Generally, people interested in using the landing strip contact
him first since it's a private landing strip. He noted that
when he purchased the ranch in 1967, the landing strip was
there. There is a state road to the ranch that the ranch
maintains. He noted that there are times when the gates are
locked due to the location of the elk.
2:55:27 PM
MR. BURTON suggested that the language "existing grazing rights
or leases" be inserted on page 1, line 8, following
"perpetuate,". He acknowledged that the aforementioned language
is included later in the legislation. These leases will be up
for renewal in a few years, and inserting this language would
help ranchers and the ranching industry.
2:57:12 PM
CO-CHAIR GATTO announced that the committee is running out of
time today and will hold HB 203.
2:57:32 PM
REPRESENTATIVE SEATON moved to adopt the proposed committee
substitute (CS) for HB 203, Version 25-LS0732\C, Bullock,
3/21/07 as the working document before the committee. There
being no objection, Version C was before the committee.
2:57:48 PM
REPRESENTATIVE SEATON moved to adopt Conceptual Amendment 1, as
follows:
Page 2, line 1, following "commissioner":
Delete "shall"
Insert "may"
The sponsor indicated her agreement with Conceptual Amendment 1
by nodding her head.
There being no objection, Conceptual Amendment 1 was adopted.
[HB 203 was held over.]
2:58:27 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:58 p.m.
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