02/21/2011 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB110 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 110 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 21, 2011
1:05 p.m.
MEMBERS PRESENT
Representative Eric Feige, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Peggy Wilson, Vice Chair
Representative Alan Dick
Representative Neal Foster
Representative Bob Herron
Representative Cathy Engstrom Munoz
Representative Berta Gardner
Representative Scott Kawasaki
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Mia Costello
Representative Mike Hawker
COMMITTEE CALENDAR
HOUSE BILL NO. 110
"An Act relating to the interest rate applicable to certain
amounts due for fees, taxes, and payments made and property
delivered to the Department of Revenue; relating to the oil and
gas production tax rate; relating to monthly installment
payments of estimated oil and gas production tax; relating to
oil and gas production tax credits for certain expenditures,
including qualified capital credits for exploration,
development, and production; relating to the limitation on
assessment of oil and gas production taxes; relating to the
determination of oil and gas production tax values; making
conforming amendments; and providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 110
SHORT TITLE: PRODUCTION TAX ON OIL AND GAS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/18/11 (H) READ THE FIRST TIME - REFERRALS
01/18/11 (H) RES, FIN
02/07/11 (H) RES AT 1:00 PM BARNES 124
02/07/11 (H) Heard & Held
02/07/11 (H) MINUTE(RES)
02/21/11 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
BRYAN BUTCHER, Acting Commissioner
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: On behalf of the governor, discussed the
ramifications of the oil tax changes proposed by HB 110.
BRUCE TANGEMAN, Deputy Commissioner
Office of the Commissioner
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Provided a sectional analysis of HB 110.
LENNIE DEES, Audit Master
Production Audit Group
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 110, answered
questions.
CHERYL NIENHUIS, Petroleum Economics Policy Analyst
Anchorage Office
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 110, answered
questions.
ACTION NARRATIVE
1:05:32 PM
CO-CHAIR ERIC FEIGE called the House Resources Standing
Committee meeting to order at 1:05 p.m. Representatives Feige,
Seaton, Gardner, Foster, and Munoz were present at the call to
order. Representatives P. Wilson, Herron, Dick, and Kawasaki
arrived as the meeting was in progress. Representatives
Costello and Hawker were also present.
HB 110-PRODUCTION TAX ON OIL AND GAS
1:05:45 PM
CO-CHAIR FEIGE announced that the only order of business is
HOUSE BILL NO. 110, "An Act relating to the interest rate
applicable to certain amounts due for fees, taxes, and payments
made and property delivered to the Department of Revenue;
relating to the oil and gas production tax rate; relating to
monthly installment payments of estimated oil and gas production
tax; relating to oil and gas production tax credits for certain
expenditures, including qualified capital credits for
exploration, development, and production; relating to the
limitation on assessment of oil and gas production taxes;
relating to the determination of oil and gas production tax
values; making conforming amendments; and providing for an
effective date."
1:06:46 PM
BRYAN BUTCHER, Acting Commissioner, Department of Revenue (DOR),
provided a PowerPoint discussion on the ramifications of the oil
tax changes proposed by HB 110. He began by noting that three
of the bill's goals are: to make Alaska more competitive both
nationally and globally, to produce more jobs for Alaskans, and
to increase oil production for Alaska (slides 1-3). He reminded
members that North Dakota is expected to surpass Alaska in oil
production within the next five years. Two more goals of HB 110
are: to develop currently unexplored fields and to get more
production out of the legacy fields, which currently provide 80-
90 percent of Alaska's oil production. The challenge is that
the bulk of the easiest to produce fuel has been produced and
Alaska is now looking at viscous and heavy oil. This is coupled
with looking at areas that have very little to no
infrastructure, which makes the high cost of doing business in
Alaska even higher than it has been in the past.
ACTING COMMISSIONER BUTCHER noted that HB 110 is the largest
part of a bigger effort by Governor Parnell to increase Alaska's
oil production. For example, the Department of Transportation &
Public Facilities (DOT&PF) is building infrastructure to open
areas for exploration, such as the road to the Gubik field. The
Department of Natural Resources (DNR) is looking at how to
expedite permitting. The Department of Law (DOL) is actively
engaged in the federal issues that have been roadblocks to the
development of oil and other natural resources in the state.
The Department of Labor & Workforce Development (DLWD) is
actively engaged in training Alaskans for the jobs the state
sees coming in the future. The Department of Environmental
Conservation (DEC) is continuing work to ensure that all
development is done in an environmentally responsible manner.
1:10:09 PM
ACTING COMMISSIONER BUTCHER reviewed the decline in Alaska's oil
production, explaining that a naturally maturing field has a
decline similar to that depicted on slide 4. The question is
what can be done about it. Texas has produced oil longer than
has Alaska, yet has successfully ramped up its oil production to
a zero or minimal decline. This can also be done in Alaska, he
said, and HB 110 will play a large role in accomplishing that.
He addressed the issue that investment is needed in both old and
new fields (slide 5). He said the Department of Revenue's fall
[2010] forecast projects that by the year 2020 about 50 percent
of the oil is expected to come from currently producing fields
and approximately 50 percent is expected to come from new
fields.
ACTING COMMISSIONER BUTCHER allowed there has been a question
that the Department of Revenue does not have all the information
that it could. However, he continued, when the information that
is on hand indicates something is not working, then that is
weighed to decide what needs to be done to move forward. For
example, at the time the petroleum production profits tax (PPT)
was being considered the department had next to no information,
but given the amount of production and the amount of taxes
coming in it was clear something needed to be done and the PPT
was passed. Eighteen months later Alaska's Clear and Equitable
Share (ACES) was taken up. The department now has much more
information than it has ever had, and while this information is
not enough to answer every single question it is enough
information to know that the state is not getting the
exploration and development that should be happening given what
is out there. This is highlighted by the projection that only
one exploration well will be drilled in Alaska in 2011 (slide
6).
1:13:06 PM
ACTING COMMISSIONER BUTCHER maintained that a lot of oil is left
in Alaska (slide 7). Cumulative production through 2010 is
estimated at about 16 billion barrels, he said. The department
believes there is 5-7 billion barrels remaining in North Slope
reserves. Most of the remaining reserves are more challenged
than the previous barrels. An example of this is the estimated
20 billion barrels of heavy oil in the giant Ugnu field. This
oil is not included in the department's forecast of remaining
reserves because recovery is not economically viable at this
time. However, he pointed out, six years ago all of the shale
gas deposits in the Lower 48 were considered uneconomic, and
that has now completely turned around to being highly economic.
He noted that the department's projected reserves also do not
include offshore volumes from the Chukchi or Beaufort seas.
While those offshore volumes would be federal barrels, that oil
would go through the Trans-Alaska Pipeline System (TAPS) and
would create jobs for Alaskans an allow the pipeline to continue
operating for many years to come.
1:14:58 PM
ACTING COMMISSIONER BUTCHER reviewed the six primary goals of HB
110 (slide 9). Goal 1 is to encourage development of new leases
or properties, he said. This would be accomplished by lowering
the base tax rate [from 25 percent to 15 percent] on leases and
properties that have not been produced prior to 2011. Goal 2 is
to encourage investment in exploration, development, and
production. This would be accomplished by using a different
calculation for [progressivity] that does not take such an
extreme percent of the high end. Goal 3 is to strengthen the
minimum tax. This would be accomplished by lowering the
threshold value. Thus, while the state gives up a little bit at
the high end, it picks up a little bit at the low end. Goal 4
is to extend to the North Slope (north of 68 degrees north
latitude) the 40 percent tax credit for well lease expenditures
and allow producers to apply tax credits in one year rather than
over two years. Changing application of the tax credit to one
year is minor to the state, but gives more value to the
companies. Goal 5 is to limit the time for assessment of
additional production taxes. Four years will now be adequate
for completing audits, as opposed to the six years currently
allowed under ACES. Goal 6 is to reduce the interest rate on
delinquent taxes and refunds. Currently the interest rate is 11
percent or the federal rate plus 5 percent, whichever is
[higher]. With the low interest rate environment of the past
few years, 11 percent seems higher than needed for adjustments
on overpayment or underpayment of taxes. The interest rate cuts
both ways because the state must pay interest on any
overpayments.
1:18:48 PM
ACTING COMMISSIONER BUTCHER said that ultimately HB 110 is about
balance between current revenue and the future health of
Alaska's economy (slide 10). Under HB 110 the state would
continue receiving its fair share of revenue. Additionally, HB
110 would establish a secure investment climate for industry.
While there would be a revenue reduction over the near term if
HB 110 is enacted, it is projected that the state would still
have plenty of surplus revenues 10 years from now. After that
the surplus is expected to increase as the state experiences
more exploration and development.
1:19:53 PM
CO-CHAIR SEATON requested an explanation of what is meant by
strengthening the minimum tax under Goal 3.
ACTING COMMISSIONER BUTCHER reminded members that producers
testified they were not thrilled with this particular provision
of the bill. However, [the administration] believes that if the
state gives up something at the high end, it is reasonable for
the state to pick up something at the low end.
CO-CHAIR SEATON asserted that this provision would weaken, not
strengthen, the state's position because it appears to him that
the state would get less revenue.
ACTING COMMISSIONER BUTCHER responded that the 4 percent [of
gross] would apply at a lower cost of oil. So, under HB 110,
the 4 percent [of gross] would kick in at $20 instead of the
current $25. The 3 percent of gross that currently kicks in at
$20-$25 would kick in at $17.50-$20. The 2 percent of gross
that currently kicks in at $17.50-$20 would kick in at $15-
$17.50. The 1 percent of gross that currently kicks in at $15-
$17.50 would kick in at $12.50-$15.
CO-CHAIR SEATON described a scenario of declining oil prices
under current law in which a price of $25 is reached, at which
the floor would kick in and the state would be guaranteed at
least 4 percent; but under HB 110 the 4 percent floor would not
kick in until the price goes down to $20.
ACTING COMMISSIONER BUTCHER said the 4 percent would kick in at
$20 and would also be there for $25. The difference is that
right now at a price of $21 the floor would not be 4 percent; it
would have to get to $25. Under HB 110, the 4 percent floor
would hit at $21.
1:23:33 PM
ACTING COMMISSIONER BUTCHER returned to his presentation and
compared the current nominal tax rate on production tax value to
the two rates proposed by HB 110 (slide 12). For presently
operating fields the proposed nominal tax rate [would remain at
the current starting rate of 25 percent] and would follow the
same curve as under ACES, but it would be bracketed and would be
capped at a peak of 50 percent. For new fields the proposed
nominal tax rate would start at 15 percent, would be bracketed,
and would be capped at 40 percent.
ACTING COMMISSIONER BUTCHER next compared the current marginal
tax rate on production tax value to the two marginal rates
proposed by HB 110 (slide 13). He explained that the marginal
tax rate is what the tax is on each additional dollar above the
production tax value and what percent goes to the state. The
proposed incremental progressivity eliminates the current 87
percent marginal tax rate effect. He pointed out that the 87
percent is strictly for the state production tax percent; it is
actually 93 percent when all state and federal taxes are
included. Under HB 110, the marginal tax rate would increase at
a more gradual rate and would not have as large a take at the
high end of production tax value than under current law.
1:25:43 PM
ACTING COMMISSIONER BUTCHER moved to a comparison of the current
effective tax rate based on gross value at point of production
with the two effective rates proposed by HB 110 (slide 14).
Under current and proposed rates, the percentage of state take
increases as the [Alaska North Slope West Coast price per barrel
increases]. However, under HB 110 the slope of the tax increase
is less than that of current law.
ACTING COMMISSIONER BUTCHER, in response to Co-Chair Seaton,
confirmed that the effective tax rate is the real money that is
paid and is the percent of total dollars earned per barrel that
would go to the state. He said the effective tax rate is
applied after tax credits and after deduction of transportation
and other costs.
1:27:18 PM
CO-CHAIR SEATON said industry has reported that the other
countries it is investing in have effective tax rates in the
range of 60 percent or so. For example, the government take in
Norway is 78 percent on the gross and in Indonesia it is 85
percent. He asked why, when compared to other jurisdictions
around the world, Alaska's effective tax rate of 35 percent is
perceived as onerous.
ACTING COMMISSIONER BUTCHER responded that the effective tax
rate shown [on slide 14] is lower because of the credits that
Alaska has, which are something that many other states and
countries do not have. The credits apply to some but not all
dollars produced. He said he believes California and one other
state are the only states with a higher tax rate than Alaska.
Therefore, on a North American basis Alaska does not stack up
when companies are deciding where to invest their dollars. On a
world basis there are other countries that have vast resources
like what Alaska used to have and, infrastructure-wise and
exploration-wise, those countries are not nearly as challenging
as is Alaska.
1:30:14 PM
CO-CHAIR SEATON requested the Department of Revenue to provide
the committee with a comparison of where companies are
investing, rather than a comparison of where they are not
investing. In regard to the argument that investment in Alaska
does not compare to others, he maintained that some of the
countries in which industry is investing, such as Russia, do not
have any more infrastructure than does Alaska.
CO-CHAIR FEIGE observed that at an Alaska North Slope West Coast
price of $100 per barrel, the effective tax rate is 28 percent
(slide 14). He asked whether this includes the percent of
federal taxes and property taxes.
ACTING COMMISSIONER BUTCHER replied that this is just the
production tax. In further response, he confirmed that the
percentages depicted on slide 14 do not include the entire
government take.
1:32:08 PM
ACTING COMMISSIONER BUTCHER resumed his presentation and
discussed the cash flow split at different oil prices under ACES
for the years 2013-2040 as projected under the Department of
Revenue's fall 2010 production forecast (slide 15). He
recounted that when oil first started flowing through the Trans-
Alaska Pipeline System (TAPS), then-Governor Hammond and the
legislature emphasized that an approximately even split between
the producers' take and the state's take was considered
reasonable. He said he is not saying that [the administration]
is shooting for this; rather, it is a historical observation
that he is relating. At Alaska North Slope West Coast oil
prices of $50-$90 per barrel, Alaska's take under ACES would be
50 percent or less of the cash flow for the years 2013-2040. At
$100 per barrel, Alaska's take would be 53 percent of the cash
flow, the producers' take would be 29 percent, and the federal
government take would be 18 percent. At a price of $150,
Alaska's take would be 62 percent.
1:34:28 PM
REPRESENTATIVE GARDNER described a scenario in which the price
of oil rises, thereby increasing the marginal tax rate. She
surmised that since Alaska has a net profit tax, a producer
could reduce its tax rate in the aforementioned scenario by
reinvesting the extra dollar which would reduce the profit.
ACTING COMMISSIONER BUTCHER agreed.
REPRESENTATIVE GARDNER further surmised that a producer can
control its tax rate by drilling a new well and deducting it,
which is exactly what the state is trying to do. She understood
that about one-third of every dollar less in state take would go
to the federal government. Thus, she presumed, the graph on
slide 15 is based on certain assumptions that can be changed by
any producer.
ACTING COMMISSIONER BUTCHER answered yes. He directed attention
to slide 16 which illustrates what the total cash flow spilt
would be under the proposed provisions of HB 110 at different
oil prices for the years 2013-2040 as projected under the
department's [fall 2010] production forecast. He said the graph
shows that the state's take would be reduced, while the federal
government's and producers' takes would increase.
1:36:08 PM
REPRESENTATIVE GARDNER surmised it is being assumed that passage
of HB 110 would result in a certain amount of investment, but it
is unknown how much that investment might be because there is no
way to calculate it.
ACTING COMMISSIONER BUTCHER agreed. He related that the
governor has made it clear there is no way [the administration]
can promise what will happen in the future. The governor has
pointed out that industry needs to step up and discuss where it
sees things going, which it did last week. He acknowledged that
the Department of Revenue's numbers in the fiscal note are
estimates based on the best information available at the time.
1:37:50 PM
REPRESENTATIVE GARDNER understood that predicting the future
price of oil is an informed guess. However, she said predicting
how investment may or may not change as a result of HB 110 is
crucial. She asked whether there is any data and noted that the
producers testified that the passage of HB 110 "may" change
investment or that it is "a start." There was no commitment
that reducing taxes would necessarily increase the producers'
investments.
ACTING COMMISSIONER BUTCHER referenced the [2/11/11] testimony
of the department's consultant [Rich Ruggiero] from Gaffney,
Cline & Associates. In this testimony the consultant provided
general projections about what the state would be giving up in
the short term and what the state would potentially have in the
long term. However, he continued, the department does not have
a dollar to dollar breakdown of those projections. He offered
to provide members with more detail in this regard.
REPRESENTATIVE GARDNER said she is very interested in knowing
what goes into calculating what the investments will be.
1:39:22 PM
ACTING COMMISSIONER BUTCHER returned to his presentation and
outlined the estimated total cash flow spilt that would occur at
different oil prices under HB 110 for the years 2013-2040 based
on the department's [fall 2010] production forecast (slide 16).
At an Alaska North Slope West Coast oil price of $100 per
barrel, the cash flow split would be 44 percent to the state, 35
percent to the producers, and 21 percent to the federal
government, as compared to 53 percent, 29 percent, and 18
percent, respectively, under current ACES law. At increased
prices, the producers' percentage of take would still be reduced
and the state's take would still increase, but not as steeply as
under current law. He said [the administration] believes the
state would still be getting its fair share at 50 percent of the
cash flow when oil prices are high [$150].
1:40:49 PM
CO-CHAIR SEATON inquired where the incentive comes in for the
investment. He calculated that at a price of $120, less $30 in
cost, the production tax value would be $90, at which industry
would receive 29 percent of the cash flow under HB 110 as
compared to 25 percent under ACES, as well as industry getting
the investment in the field. Under HB 110, all of that
investment would only yield industry a 1 percent change in the
retention of tax. He inquired whether HB 110 would therefore
eliminate the tax incentive that was trying to be built in for
stimulating infield production.
ACTING COMMISSIONER BUTCHER said he believes industry has
testified quite strongly behind HB 110. He presumed that, if
asked, industry would suggest lower numbers than what are
proposed in the bill. The purpose of slide 16 is to show that
from the department's perspective the state would still be
protected under HB 110 and would get its fair share; not to
point out why the industry should be happy that this change is
being made.
1:43:03 PM
CO-CHAIR SEATON directed attention to the marginal tax rates
depicted on slide 13. He calculated that if the amount of
investment reduced the production tax value from $90 to $70, the
marginal basis would drop by 15 percent under current law, but
under HB 110 the marginal basis would drop by only 5 percent.
He said this is two-thirds less reward for the investment and he
therefore questions how HB 110 provides incentive for
investment.
ACTING COMMISSIONER BUTCHER responded that any time the tax rate
is reduced and there is deduction, theoretically there would be
a reduction in what industry would be able to take from the
taxes. The producers and explorers have testified that this is
not viewed as detrimental to their business, just as [the
administration] does not view it as detrimental to the state.
1:45:54 PM
CO-CHAIR SEATON said that in his aforementioned example the tax
liability is reduced by 15 percent [under current law], but that
same investment under HB 110 would only reduce the tax liability
by 5 percent. He asked how that is an incentive for
reinvesting, other than just saying that industry might do
something if it has more money.
ACTING COMMISSIONER BUTCHER replied that producers have told the
department and have testified that when making investment
decisions about where to explore and where to invest funds, the
long term is looked at and it is more than just what is
reinvestment and tax credits. It is what the high end is, what
effective is, and what marginal is, and taking a higher marginal
tax rate down a higher percentage to what is still a higher
number is going to be less of an incentive than would occur
under HB 110, which would take it down a smaller percentage but
would be at a lower percentage of taxes looking long term.
1:47:55 PM
CO-CHAIR FEIGE asked whether the commissioner and the department
believe that the current ACES structure has encouraged
exploration.
ACTING COMMISSIONER BUTCHER answered that, based upon there
being virtually no new exploration over the past few years and
based upon anecdotal information that explorers that have found
oil have been unable to find partners to develop, the department
believes the current tax structure has been a deterrent to
investment. The state has not received the kind of investment
that seems to be going on in the rest of the U.S. and the world,
which is spurred in particular by the high price of oil.
CO-CHAIR FEIGE inquired whether the commissioner believes that
altering the tax rate as proposed by HB 110 would increase
exploration and subsequent production if the exploration is
successful.
ACTING COMMISSIONER BUTCHER said he would. The department
believes the changes in HB 110 will spur exploration and
increase production while still allowing the state to keep its
fair share and not do more than it needs to do.
1:49:31 PM
REPRESENTATIVE P. WILSON observed that the decrease in
exploration started a few years before PPT or ACES went into
effect. Therefore, she asked, how is it known that the
decreased exploration would not have happened anyway.
ACTING COMMISSIONER BUTCHER responded that during the pre-PPT
years the price of oil was fairly low. When Governor Frank
Murkowski took office in 2003, the state was looking at a budget
deficit of about $500-$600 million. While much of that was due
to the ELF needing to be reformed, it was also due to the low
oil price. Many factors affect whether there is exploration, he
continued, but he believes that tax rates are the biggest piece
that the State of Alaska can do something about. He said it is
his opinion that the lack of exploration in Alaska is even more
alarming given what is going in other states and countries at
this high price.
1:51:19 PM
REPRESENTATIVE GARDNER observed that industry must currently
spend money in Alaska to reduce its taxes, but if HB 110 is
passed industry will not have to spend anything to reduce its
tax rate. She inquired whether HB 110 is not the opposite of
what the state would want to do.
ACTING COMMISSIONER BUTCHER replied that under HB 110 spending
and increased investment would reduce industry's tax load. He
allowed that on a percentage basis a lower tax rate would result
in a lower amount of taxes being reduced by spending, but said
that producers take many things into consideration when making
their decisions, and for the out years they look at the tax to
see where the high take can be to offset when prices are low;
for example, "Shell" has spent nearly $4 billion in developing
the outer continental shelf (OCS). When making decisions,
industry looks at the upside as well as everything. Department
discussions indicate that looking at the tax rate, in particular
the high marginal tax rate, plays a greater role than do the
other pieces, although that is not to say the other pieces are
unimportant. The department is trying to do what it has heard
will spur investment and spending and would create more jobs in
the state.
1:53:29 PM
REPRESENTATIVE GARDNER said she still does not understand how
reducing taxes will increase industry investment.
ACTING COMMISSIONER BUTCHER responded that if he was running a
company he would not increase spending on exploration just to
reduce his taxes if it was cost prohibitive in the long run to
develop and produce the area that he was exploring. It would
ultimately cost hundreds of millions of dollars to do so, he
said. He suggested that industry be asked this question.
REPRESENTATIVE GARDNER remarked that this would be true under
either system.
1:56:40 PM
BRUCE TANGEMAN, Deputy Commissioner, Office of the Commissioner,
Department of Revenue (DOR), provided a sectional analysis of HB
110. He explained that Sections 1-5 of the bill would amend AS
43.05.225 to address the interest rate clauses (slide 18).
Sections 1 and 2 are conforming amendments. Section 3 proposes
a new interest rate of 11 percent or the federal rate plus 3
percent, whichever is lower. Currently, the interest rate is 11
percent or the federal rate plus 5 percent, whichever is higher.
Sections 4 and 5 are conforming amendments.
MR. TANGEMAN related that Section 6 addresses the 25 percent tax
rate for existing oil producing fields and proposes to
incorporate a 15 percent tax rate for state land that is not
currently producing or not unitized (slide 19). Section 6 also
proposes that progressivity be levied on an annual, rather than
a monthly, basis. This would annualize the revenue side of the
equation to what is currently annualized under the credits and
expenditures side. The state would still receive a monthly
payment, but how that payment is calculated would be changed.
1:58:46 PM
MR. TANGEMAN said Section 7 proposes lower threshold prices for
application of the minimum tax (slide 20). Currently, the
minimum tax is 4 percent of gross when the Alaska North Slope
West Coast price is over $25 per barrel; Section 7 would lower
the price to $20. Currently, three percent of gross is
calculated between $20 and $25; under the new language it would
be between $17.50 and $20. Two percent of gross currently is
calculated between $17.50 and $20; under the new language it
would be between $15 and $17.50. Minimum tax of one percent of
gross currently is between $15 and $17.50; under the new
language it would be between $12.50 and $15.
MR. TANGEMAN explained that Section 8 proposes an income-tax-
type bracketing of progressivity (slide 20). He directed
attention to page 4 of the bill where Section 8 lays out the
brackets for both the 25 percent oil production and the 15
percent oil production.
2:00:33 PM
MR. TANGEMAN said Section 9 accounts for the technical changes
of going from a monthly to an annual calculation (slide 21).
Section 10 is a conforming amendment for the proposed interest
rate change. Section 11 proposes to remove the requirement that
tax credits for qualified capital expenditures be taken over two
years; thus, the credit could be taken in one year. Section 12
is a cleanup section to allow the proposed change in Section 11
to take place.
MR. TANGEMAN related that Sections 13 and 14 are amendments to
reflect the proposed interest rate change and relate to the
proposed change in issuance of well lease expenditure credits.
Sections 15 and 16 propose to expand the 40 percent well lease
expenditure credit to include qualified expenditures on the
North Slope; currently the 40 percent credit applies only to
wells below 68 degrees north latitude. Sections 17 and 18 are
the conforming amendments to implement Sections 15 and 16.
Section 19 proposes that the statute of limitations for
production tax be reduced from six years to four years beginning
with the 2014 tax liability. It is believed that this would not
be onerous on the department, he said.
2:03:20 PM
MR. TANGEMAN explained that Section 20 would amend AS 43.55.160
to account for production subject to the proposed 15 percent tax
rate and the proposed progressivity changes (slide 23).
Sections 21, 22, and 23 are conforming amendments for the
proposed interest rate change. Section 24 would repeal AS
43.55.023(m) since all capital credit certificates would be
issued as one certificate and relates to the proposed change
that the credits do not have to be taken over two years.
MR. TANGEMAN said the rest of the sections are mostly
clarification and conforming amendments (slide 25). Section 26
would provide the Department of Revenue (DOR) with the authority
to adopt regulations to implement HB 110, which is standard for
any proposed tax change. Sections 27-30 provide the effective
dates: July 1, 2011, is the proposed effective date for the
proposed reduction in interest rate for overpayment and
underpayment of taxes; January 1, 2012, is the proposed
effective date for the proposal to allow credits for
expenditures made after this date to be used in one year instead
of having to be spread over two years; January 1, 2012, is also
the proposed effective date for the proposed extension to the
North Slope of the 40 percent well lease expenditure credit;
January 1, 2013, is the proposed effective date for the proposed
change to annual and bracketed progressivity along with a
proposed 50 percent maximum rate; January 1, 2013, is also the
proposed effective date for the proposed lower tax rate of 15
percent for new leases or properties as well as for the proposed
change to the minimum tax thresholds; and January 1, 2014, is
the proposed effective date for the proposed change from six
years to four years in the statute of limitations for production
tax.
2:05:57 PM
CO-CHAIR FEIGE pointed out that all of the producers testified
the effective dates should be sooner. He asked why the
department chose these effective dates.
ACTING COMMISSIONER BUTCHER responded that the Tax Division is a
bit behind in auditing because of the PPT and ACES changes.
Additionally, new regulations would need to be written. An
effective date for the tax changes of January 1, 2013, therefore
seemed much more realistic than 2012. The effective dates for
the interest rate and credit changes are earlier because those
would not take a tremendous amount of work by the department to
implement. The additional year for the statute of limitations
change is to make absolutely sure the department is as caught up
on its audits. In further response, he confirmed that the
spacing of the proposed effective dates is to give the
department the time to write the new rules.
2:08:15 PM
REPRESENTATIVE GARDNER referenced Section 8 and inquired who is
doing exploration work right now.
ACTING COMMISSIONER BUTCHER replied that according to the
Department of Natural Resources (DNR) and the Alaska Oil and Gas
Conservation Commission (AOGCC), Brooks Range Petroleum is
drilling the one oil exploration well expected in Alaska this
year, and it is on the North Slope.
2:08:42 PM
REPRESENTATIVE GARDNER asked what is the total amount paid out
in capital tax credits under ACES and how much of that was for
exploration wells.
MR. TANGEMAN deferred to Mr. Lennie Dees.
LENNIE DEES, Audit Master, Production Audit Group, Tax Division,
Department of Revenue (DOR), answered that he does not have in
front of him a number for just ACES. However, from the
beginning of PPT to date, the total is $3 billion in the amount
withheld from tax liability plus what the state has paid through
the appropriations fund. Of that, about $450 million was paid
out for exploration credits.
2:11:03 PM
REPRESENTATIVE GARDNER calculated that about one-sixth of the
tax credits paid out were for exploration. She asked what, in
broad terms, the rest of the tax credits were for.
MR. DEES responded that capital expenditure credits are for
drilling development wells and building facilities in both old
and new fields and these credits were about $2.4 billion of that
amount. Net operating loss carried forward credits are for
companies that are not currently tax payers but are incurring
net operating loss and these credits were $475 million. The
remainder was the small producer credits applied against taxes.
REPRESENTATIVE GARDNER cited the Kuparuk field as an example of
basically $0 in production tax under the old ELF system and
inquired whether there was any evidence of exploration or
drilling of new wells.
MR. DEES said he believes the exploration credit came into being
in 2003 and that about $48 million in exploration credits was
applied for prior to PPT.
2:13:43 PM
REPRESENTATIVE GARDNER asked whether the state has historical
data indicating that the lowering of taxes fosters job growth or
new wells.
MR. DEES said he does not have any data that he could positively
associate with that.
ACTING COMMISSIONER BUTCHER interjected that a few years ago
Alberta raised its royalty to a level seen as prohibitive by
industry and the amount of exploration subsequently dropped.
About a year ago the province lowered its royalty and the
anecdotal information is that there is now more development; the
department is still looking into finding black-and-white
information to show that. In further response, he said the
department has no data for Alaska since the last two oil tax
increases, other than it appears that there is less exploration.
2:15:15 PM
CO-CHAIR FEIGE inquired whether there has been an increase or
decrease in capital credits for exploration since the 2007
enactment of ACES.
MR. DEES answered that when PPT was in effect prior to Fiscal
Year (FY) 2007, the exploration credits claimed were about $48
million in addition to what was withheld from the tax
liabilities and what was claimed via the applications. In
fiscal years 2007, 2008, 2009, and 2010, that amount was about
$92 million, $93 million, $84 million, and $133 million,
respectively. The projection for FY 2011 is $22 million. He
cautioned against looking at that trend as being when those
activities actually occurred because there is a time lag between
when the activities occur and when the companies actually apply
for those particular credits.
2:18:33 PM
CO-CHAIR FEIGE understood that these credits do not necessarily
reflect activity that took place in those particular years.
MR. DEES replied correct. He explained that the drilling season
on the North Slope is typically between October of one year and
March and April of the next year. Under the statute, companies
must file for the credit within 6 months after completion of the
project. Some projects may take two drilling periods. So, by
the time the department receives and processes an application
there could be a lag time of one to one and a half years since
the actual expenditure was incurred. In further response, he
confirmed that the figure of $133 million in FY 2010 could have
happened as far back as 2008. He further clarified that many of
the applications for FY 2010 would have begun July 1, 2009,
through June 30, 2010, so the department probably received a lot
of those applications in September of 2009.
2:20:15 PM
REPRESENTATIVE MUNOZ asked how much of the $2.4 billion in
capital expenditure credits since PPT was for maintenance of
facilities.
MR. DEES responded he does not have that breakdown.
REPRESENTATIVE GARDNER inquired whether that data is available
to the state or whether Mr. Dees does not have it right now.
MR. DEES said he does not have the data in front of him, but of
the $2.4 billion nearly $1 billion was credits claimed by
companies not currently producing. In the application process a
company must provide a listing of the expenditures for which it
is claiming credits. The companies applying for transferable
tax credit certificates are primarily in either an exploration
or development stage, so at least $1 billion of that would have
been for construction of facilities or drilling of development
wells, not maintenance. The remaining $1.5 billion came from
the more mature fields, which means currently-producing
companies, and the department does not have a breakdown of those
particular costs until it actually audits those tax filings.
The department has completed its audits for the year 2006, which
is the first year on the PPT, and is now in the process of
auditing 2007. Under the current requirements for tax filings,
the amount of capital expenditures must be provided for the
amount of credits being claimed, but a detailed breakdown of
what those capital expenditures are for is not required.
2:24:29 PM
ACTING COMMISSIONER BUTCHER added that the Department of Law
(DOL) has concluded that a regulatory change requiring a
breakdown of capital expenditures can be done by the Department
of Revenue. When the regulations were written, the department
did not include that as a requirement; thus, it is not a matter
of industry not giving this information to the department.
CO-CHAIR FEIGE said the committee probably expects the
department to add something to those regulations.
ACTING COMMISSIONER BUTCHER replied, "Duly noted."
2:25:29 PM
CO-CHAIR SEATON recalled that the monthly basis of progressivity
was put in place for the purpose of windfall profits, such that
the state rather than the federal government would receive
something if there was a big spike in oil prices. He asked why
Section 6 proposes to change the progressivity to an annual
basis that would miss capturing any windfall profit tax.
ACTING COMMISSIONER BUTCHER conveyed that it has been more
difficult than expected to line up monthly oil prices with
expenditures, which are done on a yearly basis. This provision
is not a key aspect of the bill, it is just one of many tweaks
the department looked at to simplify things for both the
department and the industry.
2:27:56 PM
CO-CHAIR SEATON commented that he does not see how the state
would benefit from giving up the windfall profit tax angle by
going from a monthly to an annual basis for progressivity.
ACTING COMMISSIONER BUTCHER responded that it would be a rolling
average through the course of the year. He said the department
believes the true-up in March would be easier if it was based on
a rolling average that adjusted as the year went on than it
would be with the spike and drop of monthly oil prices. He
allowed that Co-Chair Seaton is correct because when the
department reviewed the last six years to determine the
difference between monthly and annually, it varied from a
difference of about $150 million to about $450 million.
ACTING COMMISSIONER BUTCHER, in response to Co-Chair Feige,
confirmed that this difference was in relation to billions of
dollars per year over this time period. In further response, he
confirmed that a rolling average would not only smooth over the
spikes, it would fill in the sharp troughs in the price as well.
However, he allowed, a rolling average would have an effect.
CO-CHAIR SEATON noted that the intended effect was to catch
those windfall profit spikes that occur when an accident or
worldwide event happens and that are not at all tied directly to
investment. He inquired whether the fiscal note reflects the
loss of $100-$400 million from this issue.
ACTING COMMISSIONER BUTCHER replied yes.
2:30:38 PM
REPRESENTATIVE KAWASAKI said he does not see this loss reflected
in the fiscal note. He asked what price per barrel the fiscal
note is modeled on.
ACTING COMMISSIONER BUTCHER answered that it is modeled on the
Department of Revenue's fall 2010 forecast for both production
and price.
REPRESENTATIVE KAWASAKI inquired how the calculations for price
spikes are done, such as for the current spike that is happening
as a result of the turmoil in Egypt and Libya.
ACTING COMMISSIONER BUTCHER responded that it would be just a
very rough estimate, given that no one can predict the ups and
downs throughout a year.
REPRESENTATIVE KAWASAKI asked whether the department has
considered calculating the deductions monthly as opposed to the
way they are done annually.
ACTING COMMISSIONER BUTCHER replied that he believes it would be
much more difficult for the industry. He deferred to Mr. Dees.
MR. DEES said he does not believe the Department of Revenue has
looked at deducting actuals on a monthly basis. He predicted
that industry would tell the committee that this would be
difficult to do. There would be a greater need for industry to
do adjustments if this was required, he continued. It would
depend on each company's monthly accounting cycles and when a
company finalizes its books as to how difficult it would be to
match up the actual expenditures for the month; so it would be
possible for some companies and more difficult for others. He
said he believes that most companies currently have an annual
estimate for projected lease expenses for the year; as that
changes throughout the year the company makes adjustments to its
monthly installments and must also adjust prior months if those
are affected.
2:34:18 PM
REPRESENTATIVE HERRON requested the department to prepare a
slide showing a scenario where the overall tax rate remains the
same as current law, but with the progressivity bracketed.
ACTING COMMISSIONER BUTCHER agreed to do so.
2:35:07 PM
CO-CHAIR SEATON inquired where the $100-$400 million loss from
the proposed annualizing of progressivity is shown.
ACTING COMMISSIONER BUTCHER deferred to Ms. Nienhuis.
CHERYL NIENHUIS, Petroleum Economics Policy Analyst, Anchorage
Office, Tax Division, Department of Revenue (DOR), said the tax
rate change is addressed in Section 3 of [Fiscal Note #1, dated
1/13/11, page 2]. Because the tax rate change would take effect
on January 1, 2013, it is unknown what the monthly oil prices
will be in FY 2013 and therefore unknown what the monthly
variation in tax rate will be. So, as far as being built into
the fiscal note, the department did not hazard a guess; for FY
2013 just one price for the year is projected. Under ACES there
was a pretty significant monthly to annual tax rate change, so
calculating monthly versus annually would have a fairly sizeable
difference, especially if there is volatility in that year.
Under the proposed bracketed progressivity of HB 110, there
would be much less of a change between monthly and annual; the
percentages are significantly less. That is because under ACES
the progressivity is formulaic, which means that every dollar of
profit actually increases the tax rate; whereas under HB 110
there would be $12.50 worth of profit under the same tax rate,
so the monthly to annual calculation would result in less of a
tax rate change.
2:37:27 PM
CO-CHAIR SEATON reiterated that eliminating the windfall portion
of the monthly progressivity would result in an average annual
decrease of $100-$400 million. He asked whether this revenue
loss is shown somewhere in the fiscal note or is off the books.
MS. NIENHUIS responded that the $100-$400 million referenced by
Acting Commissioner Butcher was calculated under ACES. The
department is calculating much lower changes under HB 110 and
without knowing the volatility it is unknown how much that would
be. With the current year prices it could be very little
because there has been little month-to-month volatility;
therefore, that was not automatically built into the fiscal
note. Department fiscal notes are normally done on the most
recent forecasted prices and production, so there was not any
volatility to model this under. She offered to provide the
ranges of differences in production tax with monthly and annual
calculations.
2:39:11 PM
CO-CHAIR FEIGE accepted Ms. Nienhuis's offer. Regarding the
difference between these two methods of calculating the tax, he
surmised that if the price is less volatile the difference is
less, and if the price is more volatile the difference is more.
MS. NIENHUIS replied correct. She noted that FY 2009 had very
volatile oil prices and that was where the biggest difference
was seen. This would be calculated on a calendar year basis, so
it would not necessarily correspond to fiscal years. However,
whatever measure of volatility there is for month-to-month is
going to make the difference in the production tax rate between
monthly and annual.
2:40:16 PM
CO-CHAIR SEATON expressed his concern that the revenue
projections for HB 110 do not reflect this loss of $100-$400
million per year. He inquired whether there are any other
aspects of HB 110 that reduce revenue that are not shown on the
fiscal note for the same type of reasoning.
ACTING COMMISSIONER BUTCHER apologized for this misinformation
on the fiscal note. He said he and Ms. Nienhuis had not spoken
in detail about this and her view that the amount of change
based on the switch from the higher spikes of ACES to the
brackets would result in a much smaller number. He added that
he thinks it will be much less than $100-$400 million.
2:41:29 PM
REPRESENTATIVE KAWASAKI referenced [Chart 8, page 11] of the
commissioner's [January 18, 2011, Oil and Gas Production Tax
Status Report] which depicts employment in Alaska's oil and gas
industry during the years of a gross profits tax and during the
years of a net profits tax. He asked for an explanation of what
these numbers would mean in terms of Representative Gardner's
question about whether the state has historical data indicating
that the lowering of taxes fosters job growth.
ACTING COMMISSIONER BUTCHER answered that the department does
not have a good breakdown of where that employment has been
going. The producers have told the department that a tremendous
amount of maintenance work is being done on mature fields and in
trying to keep production levels from declining further, but
very little is going into exploration. That is backed up when
exploration wells are looked at, but DOR does not have the hard
data that says specifically what those positions are going for.
2:43:19 PM
REPRESENTATIVE KAWASAKI inquired whether DOR has any data that
connects jobs with what has happened with tax rates
historically.
ACTING COMMISSIONER BUTCHER responded that the department does
not have any breakdown that would say definitively one way or
another, but there is anecdotal information. The department has
discovered that through regulation it can get more information
than it currently has, but he is unaware why that was not
pursued by the department previously.
MR. TANGEMAN added that specifically tying the effects of the
tax one-to-one on job growth would be very difficult without
taking into account the other variables, such as oil price.
2:44:47 PM
CO-CHAIR FEIGE pointed out that the number of exploration wells
depicted on slide 6 shows a definite downward trend and this
could be tied to price or jobs. He asked whether Representative
Kawasaki wants more information.
REPRESENTATIVE KAWASAKI replied he does want more information
because HB 110 has multi-billion-dollar implications and it does
not seem like the Department of Revenue has the data to back up
any of the proposed changes. He requested information that
shows the number of exploration wells drilled prior to 2005.
ACTING COMMISSIONER BUTCHER said DOR will get what it can.
2:46:03 PM
REPRESENTATIVE GARDNER recalled that House Bill 280, the Cook
Inlet gas storage bill by Representative Hawker, was passed last
year. That bill replaced the 20 percent credit for general
capital activity with a new 40 percent credit for well drilling
activity. Under Section 15 of HB 110, she noted, the state
would pick up the 40 percent credit statewide. She surmised
that because it is a net profits tax the cost for the well would
bring down the taxes; so, at a price of $85 per barrel the tax
rate would be about 35 percent. Therefore, the state would be
participating in the well at about 75 percent of the cost, she
calculated. She asked whether that is the intent of HB 110.
MR. TANGEMAN answered that it is not that simple because some
tax credits are stackable and some are not. He said 75 percent
is not a number he has heard.
2:47:55 PM
REPRESENTATIVE GARDNER reiterated that there would be a 40
percent credit at the top. The tax would also be reduced by 35
percent of that amount because Alaska has a net profits tax.
For example, if a company is being taxed on $100 that would be
reduced to $50 by the 40 percent tax credit; the company would
then pay taxes on only 60 percent. Thus, roughly 35 percent of
that $40 is also a tax savings to the taxpayer.
MR. TANGEMAN asked whether that $100 is the price per barrel of
oil or $100 of investment in a well.
CO-CHAIR FEIGE interjected that the tax credit is not received
unless the company invests the money.
REPRESENTATIVE GARDNER said there is the 40 percent tax credit
as well as a deductible expense at about 35 percent tax rate.
MR. TANGEMAN deferred to Mr. Dees.
MR. DEES explained that the 40 percent well lease expenditure
credit did not replace the 20 percent credit; rather, it allowed
an additional credit on certain well lease expenditures that met
certain criteria. The criteria for meeting that are what are
called intangible drilling costs associated with drilling a
well. So, it is not that the entire cost of a well received 40
percent; the intangible drilling costs received the additional
20 percent. Intangible drilling costs are those costs for items
associated with a well that are deemed to not have a salvage
value. As a rule of thumb, intangible drilling costs constitute
about 75-85 percent of the cost of drilling a well.
Theoretically, what Representative Gardner is saying is true:
if the well received the regular 20 percent credit plus the
other additional 20 percent credit on those certain items, and
the cost was deductible for production tax purposes, the company
would benefit to the extent of whatever the production tax rate
is for that particular month or year.
2:52:10 PM
REPRESENTATIVE DICK inquired how the federal government take is
determined and why the federal government is not participating
in the effort to stimulate development.
ACTING COMMISSIONER BUTCHER explained that federal taxes are
based on what Congress passes. Some parts of the state tax are
deductible from the federal tax, so when Alaska's tax goes up
the federal tax drops. He offered to provide more information
in this regard if it is requested.
REPRESENTATIVE DICK said he will pursue that.
2:53:08 PM
CO-CHAIR FEIGE said he believes the original intent of the 40
percent credit for Cook Inlet was to encourage more exploratory
drilling in the Cook Inlet to increase the supply of gas for the
Anchorage Bowl. He asked whether there has been effect from
that credit.
ACTING COMMISSIONER BUTCHER deferred to the Department of
Natural Resources for details, but said it appears that the
credit is working because a couple of companies are currently
trying to bring jack-up rigs to the Cook Inlet.
CO-CHAIR SEATON asked whether the intangible drilling cost of 40
percent is what is stimulating that instead of the 100 percent
of the cost of the first well and 90 percent of the second.
ACTING COMMISSIONER BUTCHER replied he is sure that is playing a
major role as well. A few changes were made and as a result
there has been activity.
2:54:27 PM
CO-CHAIR SEATON observed that Item 3 of Fiscal Note 1 [page 2 of
2] projects a decrease in revenue to the state of $1,423 million
in FY 2017. He further observed that Item 6 projects a revenue
decrease of $200-$400 million, which he does not believe is
included in Item 3. Additionally, $100-$400 million in revenue
would be lost from changing the windfall profits tax from a
monthly to an annual basis. He calculated that the real impact
of HB 110 would therefore be a revenue loss of $1.723-$2.223
million in FY 2017.
ACTING COMMISSIONER BUTCHER pointed out that DOR's estimates of
reduced revenue are only half of the picture. The fiscal note
does not show the increased revenue the department believes will
result from passage of HB 110. He deferred to Ms. Nienhuis to
answer the question.
MS. NIENHUIS agreed that Co-Chair Seaton's numbers are in the
ballpark, although $100-$400 million might be a little high for
the change to annual progressivity. The fiscal impact of each
provision was stated separately and the impacts would be added
together if HB 110 passed as currently written. As far as the
40 percent well lease expenditure credits, the department had
very limited data on which to project because DOR does not
receive its expenditure estimates by type of expenditure. It is
hoped there would be additional production if passage of HB 110
results in the additional development that is foreseen by the
department. If there is additional drilling, the well lease
expenditure credits could go up. In its fiscal notes, the
department tries as much as possible to follow its last forecast
information, so anything on this fiscal note uses that forecast
alone.
2:58:46 PM
CO-CHAIR SEATON said an average revenue reduction of $2 billion
per year is more significant than has been the general feeling.
There is talk about increased drilling, yet there are no
commitments from anyone for new projects. The major companies
testified that they are giving up exploration leases and will
not be in the position to do exploratory work. There is no
forecast of potential new units beyond Liberty and the other
fields scheduled to come on line soon, and no forecast that is
above the current level of well workover and production wells
within existing units. He therefore surmised that the projected
revenue reduction will not change unless the bill does cause
stimulation.
ACTING COMMISSIONER BUTCHER agreed, but explained that Ms.
Nienhuis's task on compiling the fiscal note was to look at the
current forecast and extrapolate the numbers from that, she was
not tasked with estimating the positive effects that HB 110
would have on exploration and production. Industry and the
explorers have testified about what they are looking for; it is
unlikely there will be any promise of investments, particularly
from the larger corporations, because they must work through
their boards of directors. However, industry should be able to
give members the information that is needed about whether HB 110
would be a material change to their companies' views on where
their investment dollar will go forward in regard to Alaska.
3:01:39 PM
CO-CHAIR FEIGE announced that all proposed amendments must be
prepared by Legislative Legal and Research Services and be
submitted to the co-chairs 24 hours prior to the next hearing.
He further announced that Admiral Barrett of Alyeska Pipeline
Service Company will give a presentation on low-flow issues when
HB 110 is before the House Finance Committee.
CO-CHAIR SEATON inquired whether the Department of Revenue will
have the requested analyses of projections for oil and the
impact on state revenue by the next hearing on 2/23/11.
ACTING COMMISSIONER BUTCHER said DOR should have answers to the
questions that have been asked.
3:03:28 PM
REPRESENTATIVE P. WILSON noted that she was expecting to receive
an answer from the department regarding how the statutes could
be changed so the state could receive more of the needed
information.
ACTING COMMISSIONER BUTCHER answered that DOR believes it can do
this through regulation. He said he will provide the co-chairs
with the information that he has from the Department of Law.
REPRESENTATIVE P. WILSON pointed out that when this question was
asked the other day, the answer was that more information could
not be received by the department than now because of current
state statute.
ACTING COMMISSIONER BUTCHER said his response at the time of the
question was that he believed it was statutory but it could be
regulatory. The Department of Law (DOL) looked into it and
determined that this can be done by regulation. He reiterated
that he would provide the DOL opinion.
REPRESENTATIVE GARDNER observed that Section 20 of HB 110
references existing legislation about small producer credits.
She asked whether expansion of the small producer credits around
the state could result in a doubling up on the credit and, if
so, whether this is the intention or the effect.
ACTING COMMISSIONER BUTCHER replied he will get that information
to the committee.
3:05:30 PM
The meeting was recessed at 3:05 p.m. until 5:15 p.m. that
evening.
5:21:53 PM
CO-CHAIR ERIC FEIGE called the House Resources Standing
Committee meeting back to order at 5:21 p.m. Present at the
call back to order were Representatives Feige, Seaton, Kawasaki,
P. Wilson, Herron, Munoz, Foster, and Gardner.
[HB 110 was held over.]
5:22:08 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 5:22 p.m.
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