Legislature(2017 - 2018)BARNES 124

04/16/2018 01:00 PM RESOURCES

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Audio Topic
01:36:24 PM Start
01:37:00 PM HB288
02:43:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 1:30 pm --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 288 OIL AND GAS PRODUCTION TAX TELECONFERENCED
Heard & Held
-- Public Testimony --
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 16, 2018                                                                                         
                           1:36 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Andy Josephson, Co-Chair                                                                                         
Representative Geran Tarr, Co-Chair                                                                                             
Representative John Lincoln, Vice Chair                                                                                         
Representative Harriet Drummond                                                                                                 
Representative Chris Birch                                                                                                      
Representative DeLena Johnson                                                                                                   
Representative George Rauscher                                                                                                  
Representative David Talerico                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                              
Representative Justin Parish                                                                                                    
Representative Mike Chenault (alternate)                                                                                        
Representative Chris Tuck (alternate)                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 288                                                                                                              
"An Act relating to the minimum tax imposed on oil and gas                                                                      
produced from leases or properties that include land north of 68                                                                
degrees North latitude; and providing for an effective date."                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 288                                                                                                                  
SHORT TITLE: OIL AND GAS PRODUCTION TAX                                                                                         
SPONSOR(s): REPRESENTATIVE(s) TARR                                                                                              
                                                                                                                                
01/16/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/18       (H)       RES, FIN                                                                                               
01/22/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
01/22/18       (H)       Heard & Held                                                                                           
01/22/18       (H)       MINUTE(RES)                                                                                            
01/26/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
01/26/18       (H)       Heard & Held                                                                                           
01/26/18       (H)       MINUTE(RES)                                                                                            
01/29/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
01/29/18       (H)       Heard & Held                                                                                           
01/29/18       (H)       MINUTE(RES)                                                                                            
03/30/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/30/18       (H)       Scheduled but Not Heard                                                                                
04/02/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/02/18       (H)       Heard & Held                                                                                           
04/02/18       (H)       MINUTE(RES)                                                                                            
04/13/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/13/18       (H)       -- Delayed to 4/14/18 at 2:00 pm --                                                                    
04/14/18       (H)       RES AT 2:00 PM BARNES 124                                                                              
04/14/18       (H)       -- MEETING CANCELED --                                                                                 
04/16/18       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
PETER MORGAN                                                                                                                    
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in opposition during the hearing                                                               
of HB 288.                                                                                                                      
                                                                                                                                
MARLEANNA HALL, Executive Director                                                                                              
Resource Development Council for Alaska, Inc.                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition during the hearing                                                               
of HB 288.                                                                                                                      
                                                                                                                                
AVES THOMPSON, Executive Director                                                                                               
Alaska Trucking Association                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition during the hearing                                                               
of HB 288.                                                                                                                      
                                                                                                                                
CURTIS THAYER, President/CEO                                                                                                    
Alaska State Chamber of Commerce                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in strong opposition during the                                                                
hearing of HB 288.                                                                                                              
                                                                                                                                
CHERYL BOWIE                                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing of HB 288.                                                                  
                                                                                                                                
ALICIA SIIRA, Deputy Director                                                                                                   
Alaska Miners Association                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition during the hearing                                                               
of HB 288.                                                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:36:24 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  GERAN   TARR  called   the  House   Resources  Standing                                                             
Committee meeting  to order at  1:36 p.m.   Representatives Tarr,                                                               
Birch,  Talerico,  Rauscher,   Drummond,  Johnson,  Lincoln,  and                                                               
Josephson were present at the call to order.                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
               HB 288-OIL AND GAS PRODUCTION TAX                                                                            
                                                                                                                                
1:37:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR announced that the  only order of business would be                                                               
HOUSE BILL NO.  288, "An Act relating to the  minimum tax imposed                                                               
on oil  and gas produced  from leases or properties  that include                                                               
land north  of 68  degrees North latitude;  and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
[The committee  substitute (CS) for HB  288, Version 30-LS1155\D,                                                               
Nauman, 3/27/18, was adopted on  4/2/18, and Version D was before                                                               
the committee.]                                                                                                                 
                                                                                                                                
REPRESENTATIVE  RAUSCHER  directed attention  to  CS  for HB  288                                                               
beginning on page 5, line  31, and asked whether AS 43.55.011(j),                                                               
(k), and (o) were referred to elsewhere in the bill.                                                                            
                                                                                                                                
CO-CHAIR  TARR  said  the abovementioned  proposed  [subparagraph                                                               
(C)]  relates to  underlying statute,  thus  the entire  existing                                                               
statute is part of the language  of the bill.  The change brought                                                               
by the bill to  the existing statute is found on  page 8, line 9,                                                               
and  on page  10,  line  3; otherwise  the  legislation does  not                                                               
change.                                                                                                                         
                                                                                                                                
REPRESENTATIVE   RAUSCHER  surmised   the   bill  represents   "a                                                               
multiplier for  them to  make payments  on a  prepayment schedule                                                               
...."                                                                                                                           
                                                                                                                                
1:41:23 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR said  the bill on page 1, [line  5], amends Section                                                               
1. AS  43.55.011(f), which  is the  existing minimum  tax statute                                                               
that would be  changed.  [Sec. 2 AS 43.55.020(a)]  begins on page                                                               
4, line  23, and the  change brought by  the proposed bill  is on                                                               
page 8, line 9.                                                                                                                 
                                                                                                                                
REPRESENTATIVE RAUSCHER  restated his question as  to whether the                                                               
bill includes a payment schedule.                                                                                               
                                                                                                                                
CO-CHAIR TARR said the bill does  not change the way tax payments                                                               
are made but would change the amount of the minimum tax.                                                                        
                                                                                                                                
REPRESENTATIVE RAUSCHER concluded the  existing method of payment                                                               
would be realigned to comport with other changes.                                                                               
                                                                                                                                
CO-CHAIR TARR said yes.                                                                                                         
                                                                                                                                
1:43:46 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR opened public testimony on HB 288.                                                                                
                                                                                                                                
1:43:53 PM                                                                                                                    
                                                                                                                                
PETER MORGAN  said he  has lived  in Alaska for  54 years  and is                                                               
testifying  in opposition  to HB  288.   He  opined HB  288 is  a                                                               
terrible policy.   Mr. Morgan  said he works in  the construction                                                               
industry and has  seen the detrimental effects of  low oil prices                                                               
on the  economy.  In addition  to the direct impact  to those who                                                               
work in the oil and gas  industry, he has seen the ripple effects                                                               
throughout the  economy as  businesses cut  back on  expenses and                                                               
employees are laid off, much  of which can be directly correlated                                                               
with oil industry spending.  He  pointed out he could not run his                                                               
business if the  taxes were changed, or were  proposed to change,                                                               
every  year.   He questioned  whether multiple  proposed oil  tax                                                               
changes would  increase jobs or  investments.  Although  there is                                                               
talk of a  fiscal plan, the legislature is silent  on how to grow                                                               
jobs or opportunities, except for  those in state government.  He                                                               
stressed raising taxes  on the oil industry not  only impacts big                                                               
corporations  but  raising  taxes  on  the  industry  can  impact                                                               
everyone.   He urged  for no votes  on "this  shortsighted bill,"                                                               
which is not in the best interest of Alaska.                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH stated  his agreement  with Mr.  Morgan and                                                               
asked  whether  Mr. Morgan  is  involved  in  the [oil  and  gas]                                                               
industry.                                                                                                                       
                                                                                                                                
MR.  MORGAN restated  he is  in  the construction  business.   In                                                               
1985, his  business did $3  million worth of business,  an amount                                                               
that was  seriously reduced by  the downturn  in 1987.   He urged                                                               
the committee to  "show some integrity and  some consistency with                                                               
these oil ...  companies," and said businesses  cannot operate in                                                               
an  environment   of  [changing  tax  policies];   in  fact,  big                                                               
companies will leave, and smaller companies will follow.                                                                        
                                                                                                                                
REPRESENTATIVE  JOHNSON   agreed  that   actions  taken   by  the                                                               
legislature can dramatically affect small businesses.                                                                           
                                                                                                                                
1:48:49 PM                                                                                                                    
                                                                                                                                
MR. MORGAN stressed the importance  of a consistent and long-term                                                               
[tax]  policy; he  said he  would never  want an  adjustable rate                                                               
mortgage,  and  neither would  oil  companies,  who would  choose                                                               
another bank.                                                                                                                   
                                                                                                                                
REPRESENTATIVE DRUMMOND  asked how businesses reacted  to the tax                                                               
changes  made  by the  federal  government  in December,  [2017],                                                               
which lowered taxes.                                                                                                            
                                                                                                                                
MR. MORGAN stated  taxes haven't gone down for him.   He added he                                                               
does  not  agree  with  the  current  [federal]  administration's                                                               
action regarding tax policy.   He again urged for consistency and                                                               
said, "  ... if you  were to build into  this bill 'we  will keep                                                               
this  rate for  15, or  20, or  like a  30-year mortgage'  people                                                               
could deal  with that, oil companies  could deal with that."   He                                                               
concluded  both the  federal and  state governments  must control                                                               
their debt.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  RAUSCHER  expressed  support  for  the  speaker's                                                               
testimony.                                                                                                                      
                                                                                                                                
CO-CHAIR TARR  recalled at  the time the  current oil  tax policy                                                               
was enacted, oil  was $110 per barrel, [the impact  of] lower oil                                                               
price was  not discussed, and  the current 4 percent  minimum tax                                                               
is the lowest  in state history.  She expressed  her hope lessons                                                               
have been learned after oil prices  dropped to $27 per barrel and                                                               
legislators would  now consider  a broader  range of  oil prices.                                                               
Co-Chair Tarr pointed out CS for  HB 288 that has been adopted by                                                               
the  committee would  have a  fiscal  impact of  $64 million  for                                                               
fiscal year  2019 (FY 19),  of $139 million  in FY 20,  and never                                                               
would be above $250 million.                                                                                                    
                                                                                                                                
MR. MORGAN gave the example of a  home loan that is executed at a                                                               
certain rate and remains the same after interest rates decrease.                                                                
                                                                                                                                
1:55:08 PM                                                                                                                    
                                                                                                                                
MARLEANNA HALL, Executive  Director, Resource Development Council                                                               
for Alaska,  Inc., informed the  committee her organization  is a                                                               
statewide trade  association comprised of entities  from Alaska's                                                               
oil  and gas,  mining,  forest products,  fisheries, and  tourism                                                               
industries,  and  12   land-owning  Alaska  Native  corporations;                                                               
members  of  her  organization   believe  the  best  approach  to                                                               
generate  state revenue  is  to produce  more  oil, attract  more                                                               
tourists, harvest more  fish and timber, and  mine more minerals.                                                               
She said HB 288 represents  the third straight year of increasing                                                               
oil  and gas  production taxes,  which would  increase costs  and                                                               
reduce   Alaska's  competitiveness   and   new  oil   production.                                                               
Further,  increased  throughput   in  the  Trans-Alaska  Pipeline                                                               
System  (TAPS) would  help move  the state  out of  recession and                                                               
would generate  more revenue than would  HB 288.  Ms.  Hall urged                                                               
the committee  to carefully  consider the impact  of the  bill on                                                               
competitiveness  and further  production.   She  pointed out  the                                                               
competition faced  by the oil  and gas  industry due to  the high                                                               
cost of development in Alaska.   When combined, state and federal                                                               
government share  is higher than  that of the producers,  and the                                                               
state is paid  royalty, property tax, and a  gross production tax                                                               
when companies are  operating at a loss.  She  opined the present                                                               
tax system  is working.  Ms.  Hall urged the committee  to reject                                                               
the proposed legislation.                                                                                                       
                                                                                                                                
1:57:59 PM                                                                                                                    
                                                                                                                                
AVES THOMPSON,  Executive Director, Alaska  Trucking Association,                                                               
informed  the  committee the  Alaska  Trucking  Association is  a                                                               
statewide organization  representing the interests of  200 member                                                               
companies that move  freight across the state.   He observed late                                                               
in the legislative  session, HB 288 is being heard  for the first                                                               
time  and proposes  another  tax increase  on  the oil  industry.                                                               
Over the  past few years,  the oil  industry - with  difficulty -                                                               
has  adjusted  to  lower  oil prices,  while  continuing  to  pay                                                               
royalties, property  tax, and  a gross  production tax;  in fact,                                                               
businesses are beginning to recover and  "this is not the time to                                                               
penalize them  ... further  by increasing  taxes."   Mr. Thompson                                                               
said increased North Slope activity  has demonstrated the current                                                               
fiscal  system is  working and  [Senate  Bill 21,  passed in  the                                                               
Twenty-Eighth    Alaska   State    Legislature]   has    improved                                                               
competitiveness  and made  Alaska more  attractive to  investors.                                                               
However, HB 288  would highlight Alaska's poor  reputation in the                                                               
oil and  financial sectors, jeopardize new  investment, and would                                                               
represent the eighth  major tax change in the last  13 years.  In                                                               
addition,  HB 288  would do  nothing to  encourage production  or                                                               
provide jobs but would raise costs  and harm the industry and the                                                               
state's  economy.     Mr.  Thompson  said   the  Alaska  Trucking                                                               
Association is opposed to HB 288.                                                                                               
                                                                                                                                
CO-CHAIR TARR  clarified HB 288 was  the first bill heard  by the                                                               
House  Resources Standing  Committee  in January  [2018] so  that                                                               
legislators would have sufficient time for its consideration.                                                                   
                                                                                                                                
REPRESENTATIVE JOHNSON expressed agreement  with Mr. Thompson and                                                               
opined hearing  the bill is  "somewhat irresponsible" due  to the                                                               
message sent to industry.                                                                                                       
                                                                                                                                
CO-CHAIR TARR  asked Mr. Thompson  how his industry  suggests the                                                               
state fund a fiscal plan and  a capital budget that are necessary                                                               
to build infrastructure and make investments in the state.                                                                      
                                                                                                                                
MR.  THOMPSON  stated  his  industry  supports  a  state  capital                                                               
budget; however,  the freight  industry also  needs a  robust oil                                                               
and  gas  industry  to  provide  jobs  for  drivers  and  trucks.                                                               
Although  capital budgets  are important,  most  important is  to                                                               
keep industry  investment and jobs  in Alaska, which  the current                                                               
tax regime achieves.                                                                                                            
                                                                                                                                
CO-CHAIR TARR pointed  out oil revenue from oil  and gas projects                                                               
that will be  in production soon will not be  enough to stabilize                                                               
the state's  financial situation;  in addition, after  many years                                                               
of not funding a capital  budget, Alaskans are asking legislators                                                               
to do so.                                                                                                                       
                                                                                                                                
MR. THOMPSON advised industry is  not willing to invest in Alaska                                                               
because Alaska does  not compete very well in  the global capital                                                               
market due to high costs and cheaper alternatives.                                                                              
                                                                                                                                
2:05:22 PM                                                                                                                    
                                                                                                                                
CURTIS THAYER,  President/CEO, Alaska  State Chamber  of Commerce                                                               
(Alaska   Chamber),  said   Alaska  Chamber   is  a   65-year-old                                                               
organization  representing over  700  members, collectively  with                                                               
100,000 employees.   He said  Alaska Chamber is  strongly opposed                                                               
to  HB  288  because  Alaska  is struggling  to  recover  from  a                                                               
recession  and   the  proposed  legislation  would   prolong  the                                                               
recession.   He agreed with  previous speakers that  Alaska's tax                                                               
policy  has  had  several  changes; he  observed  this  year  the                                                               
legislature  wants to  provide stability  [to  the Department  of                                                               
Education  and Early  Development] by  forward funding  education                                                               
for two  years, but will not  give the same stability  to the oil                                                               
and gas industry, which provides  80 percent of the state budget.                                                               
He urged  the committee  to "take  a pause, not  look at  new tax                                                               
structure,  and  allow  what  we   have  to  continue  to  work."                                                               
Further, the way to fund the  budget is to reduce spending, which                                                               
is  supported by  72  percent  of Alaskans.    Alaska Chamber  is                                                               
opposed to HB 288.                                                                                                              
                                                                                                                                
CO-CHAIR   JOSEPHSON  related   the   Alaska   state  budget   is                                                               
approximately  $4  billion  [80  percent  of  $4  billion  is  $3                                                               
billion] and  the total  of severance taxes  and royalty  is less                                                               
than $3 billion.  He asked Mr. Thayer to clarify his statement.                                                                 
                                                                                                                                
                                                                                                                                
MR. THAYER explained:                                                                                                           
                                                                                                                                
     Well,   when   I   say  the   industry   accounts   for                                                                    
     approximately,   it's,    77   percent    of   Alaska's                                                                    
     unrestricted general  fund revenues that we  have right                                                                    
     now.   When you at when  we pay with royalty,  when you                                                                    
     look at property tax, when  you look at the income tax,                                                                    
     and the severance tax, the  oil industry represents the                                                                    
     majority of the  taxpayer ... by my  references it's 77                                                                    
     percent.                                                                                                                   
                                                                                                                                
REPRESENTATIVE RAUSCHER asked Mr. Thayer  how HB 288, if enacted,                                                               
would affect the state in the next two to three years.                                                                          
                                                                                                                                
MR.  THAYER  opined  [passage  of the  bill]  would  continue  to                                                               
indicate Alaska  is an unstable  place to do business  because it                                                               
makes  changes to  tax policy.   He  noted the  state budget  has                                                               
increased by $500 million and Alaska  seeks to raise taxes on the                                                               
oil and  gas industry  to pay for  the increase;  further, Alaska                                                               
does not have a reputation of  being able to control its expenses                                                               
and reduce the footprint of government.                                                                                         
                                                                                                                                
CO-CHAIR TARR referred to a  poll conducted by the Alaska Chamber                                                               
and  questioned whether  the poll  asked respondents  to indicate                                                               
specific areas  where the legislature should  make spending cuts,                                                               
which would be helpful.                                                                                                         
                                                                                                                                
2:10:12 PM                                                                                                                    
                                                                                                                                
MR. THAYER answered people want  to cut the legislature's budget.                                                               
Furthermore,  he  related  in  the   previous  year,  the  Walker                                                               
administration  did  a  study on  healthcare  costs  which  found                                                               
consolidating healthcare amongst public  employees would save the                                                               
state $655 million over seven years;  Mr. Thayer opined this is a                                                               
perfect  example that  there are  still areas  to cut  and reduce                                                               
government, without affecting  programs and jobs.   He offered to                                                               
share polling and other information with the committee.                                                                         
                                                                                                                                
CO-CHAIR  TARR said  she would  distribute data  provided by  the                                                               
Alaska Chamber to the committee.                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH  recalled testimony at a  previous committee                                                               
meeting related  to legislation  [House Bill  331, passed  in the                                                               
Thirtieth  Alaska State  Legislature] proposing  [bonds would  be                                                               
issued to pay the outstanding  tax credit certificates] the state                                                               
owes  to 37  beneficiaries.    He asked  Mr.  Thayer whether  the                                                               
proposed bill would affect any members of the Alaska Chamber.                                                                   
                                                                                                                                
MR. THAYER  said the Alaska  Chamber supports the concept  of the                                                               
aforementioned bill,  because the  state clearly owes  the money,                                                               
and returning the money to  circulation for industrial investment                                                               
and investment in Alaska is a way to move forward.                                                                              
                                                                                                                                
2:13:35 PM                                                                                                                    
                                                                                                                                
CHERYL BOWIE  said she is  Alaska Native  and a former  oil spill                                                               
employee  of Alyeska  Pipeline  Service Company.    She said  she                                                               
misses  the  investment  climate  and the  work  that  previously                                                               
existed in Alaska.   After her experience working  in the medical                                                               
field, there is  research she would like to  pursue; however, the                                                               
restrictive investment environment in  the oil field industry has                                                               
hampered  the  hemp research  she  seeks  to conduct  related  to                                                               
hydrocarbons  and  plants.    Ms.  Bowie  further  described  her                                                               
research and  goals that have been  "on hold for years  and years                                                               
now because of this really  restrictive environment."  She stated                                                               
her  opposition  [to  HB  288]  and  her  support  of  extracting                                                               
Alaska's mineral resources.                                                                                                     
                                                                                                                                
CO-CHAIR  TARR specified  that the  bill  being heard  is HB  288                                                               
which would  increase the  minimum tax on  oil and  gas severance                                                               
tax.                                                                                                                            
                                                                                                                                
MS. BOWIE  explained her  testimony is relevant  to the  topic of                                                               
massive layoffs in  the oil and gas industry  and less production                                                               
in  the  oil fields,  which  impacts  all businesses  in  Alaska.                                                               
Further,   additional  restrictive,   high  tax   legislation  is                                                               
"bleeding over into everything and it needs to stop."                                                                           
                                                                                                                                
REPRESENTATIVE DRUMMOND inquired  as to the research  on hemp Ms.                                                               
Bowie is conducting.                                                                                                            
                                                                                                                                
MS. BOWIE said cannabis is a  plant with "high capacity of uptake                                                               
in  soil ...."   She  described  in detail  how growing  cannabis                                                               
benefits  the environment  and production,  and related  multiple                                                               
uses for cannabis and cannabis fibers.                                                                                          
                                                                                                                                
REPRESENTATIVE  DRUMMOND urged  Ms. Bowie  to contact  her office                                                               
regarding Senate  Bill 6, [passed  in the Thirtieth  Alaska State                                                               
Legislature].                                                                                                                   
                                                                                                                                
MS. BOWIE said,  "... but yes, I absolutely support  this oil tax                                                               
[current   oil  tax   regime]  ...   I  absolutely   support  the                                                               
advancement of our oil industry here."                                                                                          
                                                                                                                                
2:21:33 PM                                                                                                                    
                                                                                                                                
ALICIA SIIRA,  Deputy Director, Alaska Miners  Association (AMA),                                                               
informed   the   committee   AMA  is   a   nonprofit   membership                                                               
organization  established   in  1939  to  represent   the  mining                                                               
industry  throughout   Alaska;  AMA  has  a   diverse  membership                                                               
composed  of  more  than  1,500   members  from  eight  statewide                                                               
branches in Anchorage, Denali,  Fairbanks, Haines, Juneau, Kenai,                                                               
Ketchikan,   Price  of   Wales,  and   Nome.     Members  include                                                               
prospectors, geologists,  engineers, miners, small  family mines,                                                               
junior  mining companies,  major  mining companies,  oil and  gas                                                               
support services,  and mining support  services.   Although AMA's                                                               
mission is to promote responsible  mineral development in Alaska,                                                               
she said  AMA is  testifying in  opposition to  HB 288  because a                                                               
healthy  oil and  gas industry  is  crucial to  a healthy  mining                                                               
industry and good for Alaska.   Ms. Siira characterized HB 288 as                                                               
an  oil tax  bill  that  would raise  taxes  and discourage  must                                                               
needed investment  in Alaska.  As  a policy, AMA urges  the state                                                               
to maintain an equitable and  stable tax and royalty structure on                                                               
state-owned resources.   Further, the mining  industry recognizes                                                               
the  importance  of  increased   oil  production  and  urges  the                                                               
committee to reject the bill.                                                                                                   
                                                                                                                                
2:23:39 PM                                                                                                                    
                                                                                                                                
The committee  took a brief at  ease.  The committee  took an at-                                                               
ease from 2:24 p.m. to 2:30 p.m.                                                                                                
                                                                                                                                
2:30:08 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TARR stated  a correction  to the  PowerPoint entitled,                                                               
House Bill 288 CS Version D  Fairness in Oil Taxes," presented at                                                               
the hearing of HB  288 on 4/2/18.  She said  slide 7 was compiled                                                               
from page  6 of  a report  entitled, "2016  Oil and  Gas Taxation                                                               
Comparison for the  State of Idaho," dated  1/19/17, [included in                                                               
the committee packet] and a  corrected slide 7 [changing Arkansas                                                               
to Alaska]  would be provided  to the  committee.  She  urged the                                                               
committee to review the report in its entirety.                                                                                 
                                                                                                                                
2:33:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  expressed opposition  to the bill  and said                                                               
he is concerned  about the "process."  For  example, the [working                                                               
group  that is  a  provision of  House Bill  111,  passed in  the                                                               
Thirtieth  Alaska  State  Legislature]  was to  be  organized  to                                                               
consider  all  the  impacts  of  a tax  overhaul.    Further,  "a                                                               
wholesale ...  change in the  oil tax structure that  didn't even                                                               
come  to  [the  House  Resources  Standing  Committee],  it  went                                                               
straight to [the House Finance  Committee], and ... I don't think                                                               
[HB 288] has had any of  the benefit of the collaboration and the                                                               
discussion as  I thought the study  group was set up  to do ...."                                                               
Representative Birch  restated his concern about  not hearing the                                                               
tax overhaul bill  and pointed out testimony has shown  HB 288 is                                                               
a  tax  increase  that  has not  benefited  from  a  deliberative                                                               
process during interim.  He opined  hearing HB 288 is a strenuous                                                               
exercise,  without  purpose,  and  questioned  whether  committee                                                               
hearings would continue.                                                                                                        
                                                                                                                                
CO-CHAIR TARR  did not anticipate  scheduling many  more meetings                                                               
as the committee has heard most  of its referrals.  Regarding the                                                               
working group,  she said the intention  of the group was  to meet                                                               
during [the  2017] interim and  bring recommendations  before the                                                               
legislature [in 2018]; however,  because of special sessions, the                                                               
working group  held one  meeting.  Senator  Giessel and  she, co-                                                               
chairs of  the working group,  have recommended that  the working                                                               
group  continue  for   a  full  calendar  year,   and  expect  to                                                               
reconvene.   Co-Chair  Tarr  clarified the  goal  of the  working                                                               
group is  not necessarily to  draft a  tax increase bill,  but to                                                               
respond to  recommendations from consultants and  thereby improve                                                               
various aspects of  the state's oil and gas policy.   She further                                                               
reviewed provisions in  House Bill 111 that were  not included in                                                               
the final version.                                                                                                              
                                                                                                                                
2:39:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON  recalled  the  minimum tax  issue  has  been                                                               
addressed in  various proposed  legislation before  the committee                                                               
since 2016; further, today's hearing  was the fifth hearing of HB                                                               
288.   He related the committee  has a recent referral  before it                                                               
and therefore, may meet until adjournment of the legislature.                                                                   
                                                                                                                                
REPRESENTATIVE BIRCH encouraged the working group to seek advice                                                                
from a qualified consultant and to share the consultant's                                                                       
recommendations with the committee.                                                                                             
                                                                                                                                
CO-CHAIR TARR said Senator Stedman chairs the Legislative Audit                                                                 
and Budget Committee and requests in this regard should be                                                                      
directed to him.                                                                                                                
                                                                                                                                
HB 288 was held over with public testimony open.                                                                                
                                                                                                                                
2:43:31 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 2:43 p.m.                                                                 

Document Name Date/Time Subjects
HB288 Sponsor Statement 1.21.18.pdf HRES 1/22/2018 1:00:00 PM
HRES 1/26/2018 1:00:00 PM
HRES 1/29/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/13/2018 1:00:00 PM
HRES 4/14/2018 2:00:00 PM
HRES 4/16/2018 1:00:00 PM
HB 288
HB288 ver A 1.16.18.PDF HRES 1/22/2018 1:00:00 PM
HRES 1/26/2018 1:00:00 PM
HRES 1/29/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/13/2018 1:00:00 PM
HRES 4/14/2018 2:00:00 PM
HRES 4/16/2018 1:00:00 PM
HB 288
HB288 Fiscal Note DOR-TAX 1.20.18.pdf HRES 1/22/2018 1:00:00 PM
HRES 1/26/2018 1:00:00 PM
HRES 1/29/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/13/2018 1:00:00 PM
HRES 4/14/2018 2:00:00 PM
HRES 4/16/2018 1:00:00 PM
HB 288
HB288 Sectional Analysis 1.21.18.pdf HRES 1/22/2018 1:00:00 PM
HRES 1/26/2018 1:00:00 PM
HRES 1/29/2018 1:00:00 PM
HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/13/2018 1:00:00 PM
HRES 4/14/2018 2:00:00 PM
HRES 4/16/2018 1:00:00 PM
HB 288
HB 288 CS Version D 3.27.18.pdf HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/13/2018 1:00:00 PM
HRES 4/14/2018 2:00:00 PM
HRES 4/16/2018 1:00:00 PM
HB 288
HB 288 Fiscal Analysis for Version D 3.27.18.pdf HRES 3/30/2018 1:00:00 PM
HRES 4/2/2018 1:00:00 PM
HRES 4/13/2018 1:00:00 PM
HRES 4/14/2018 2:00:00 PM
HRES 4/16/2018 1:00:00 PM
HB 288
HB 288 Letter of Support 4.16.18.pdf HRES 4/16/2018 1:00:00 PM
HB 288
HB 288 Letters of Opposition 4.16.18.pdf HRES 4/16/2018 1:00:00 PM
HB 288
HB 288 Summary of Changes Version A to Version D 3.29.18.pdf HRES 4/16/2018 1:00:00 PM
HB 288
HB288 Supporting Document - 2016 Oil and Gas Taxation Comparison for the State of Idaho 1.21.17.pdf HRES 4/16/2018 1:00:00 PM
HB 288