Legislature(2005 - 2006)CAPITOL 106
03/10/2006 12:30 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB488 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 488 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 10, 2006
12:36 p.m.
MEMBERS PRESENT
Representative Jay Ramras, Co-Chair
Representative Ralph Samuels, Co-Chair
Representative Jim Elkins (via teleconference)
Representative Gabrielle LeDoux (via teleconference)
Representative Paul Seaton
Representative Harry Crawford (via teleconference)
Representative Mary Kapsner (via teleconference)
MEMBERS ABSENT
Representative Carl Gatto
Representative Kurt Olson
COMMITTEE CALENDAR
HOUSE BILL NO. 488
"An Act repealing the oil production tax and gas production tax
and providing for a production tax on the net value of oil and
gas; relating to the relationship of the production tax to other
taxes; relating to the dates tax payments and surcharges are due
under AS 43.55; relating to interest on overpayments under AS
43.55; relating to the treatment of oil and gas production tax
in a producer's settlement with the royalty owner; relating to
flared gas, and to oil and gas used in the operation of a lease
or property, under AS 43.55; relating to the prevailing value of
oil or gas under AS 43.55; providing for tax credits against the
tax due under AS 43.55 for certain expenditures, losses, and
surcharges; relating to statements or other information required
to be filed with or furnished to the Department of Revenue, and
relating to the penalty for failure to file certain reports,
under AS 43.55; relating to the powers of the Department of
Revenue, and to the disclosure of certain information required
to be furnished to the Department of Revenue, under AS 43.55;
relating to criminal penalties for violating conditions
governing access to and use of confidential information relating
to the oil and gas production tax; relating to the deposit of
money collected by the Department of Revenue under AS 43.55;
relating to the calculation of the gross value at the point of
production of oil or gas; relating to the determination of the
net value of taxable oil and gas for purposes of a production
tax on the net value of oil and gas; relating to the definitions
of 'gas,' 'oil,' and certain other terms for purposes of AS
43.55; making conforming amendments; and providing for an
effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 488
SHORT TITLE: OIL AND GAS PRODUCTION TAX
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/21/06 (H) READ THE FIRST TIME - REFERRALS
02/21/06 (H) RES, FIN
02/22/06 (H) RES AT 12:30 AM HOUSE FINANCE 519
02/22/06 (H) Heard & Held
02/22/06 (H) MINUTE(RES)
02/23/06 (H) RES AT 12:30 AM HOUSE FINANCE 519
02/23/06 (H) Heard & Held
02/23/06 (H) MINUTE(RES)
02/24/06 (H) RES AT 12:30 AM HOUSE FINANCE 519
02/24/06 (H) Heard & Held
02/24/06 (H) MINUTE(RES)
02/25/06 (H) RES AT 10:00 AM SENATE FINANCE 532
02/25/06 (H) Joint with Senate Resources
02/27/06 (H) RES AT 12:30 AM CAPITOL 124
02/27/06 (H) Heard & Held
02/27/06 (H) MINUTE(RES)
02/28/06 (H) RES AT 12:30 AM CAPITOL 124
02/28/06 (H) Heard & Held
02/28/06 (H) MINUTE(RES)
03/01/06 (H) RES AT 12:30 AM CAPITOL 124
03/01/06 (H) Heard & Held
03/01/06 (H) MINUTE(RES)
03/02/06 (H) RES AT 12:00 AM CAPITOL 124
03/02/06 (H) Heard & Held
03/02/06 (H) MINUTE(RES)
03/03/06 (H) RES AT 12:30 AM CAPITOL 124
03/03/06 (H) Heard & Held
03/03/06 (H) MINUTE(RES)
03/04/06 (H) RES AT 2:00 PM HOUSE FINANCE 519
03/04/06 (H) Heard & Held
03/04/06 (H) MINUTE(RES)
03/06/06 (H) FIN AT 12:30 AM HOUSE FINANCE 519
03/06/06 (H) Presentation by Legislative Consultant
03/06/06 (H) RES AT 12:30 AM HOUSE FINANCE 519
03/06/06 (H) Testimony by legislative consultant
03/07/06 (H) RES AT 12:30 AM CAPITOL 124
03/07/06 (H) Heard & Held
03/07/06 (H) MINUTE(RES)
03/08/06 (H) RES AT 12:30 AM CAPITOL 106
03/08/06 (H) -- Meeting Canceled --
03/09/06 (H) RES AT 12:30 AM CAPITOL 106
03/09/06 (H) -- Meeting Canceled --
03/10/06 (H) RES AT 12:30 AM CAPITOL 106
WITNESS REGISTER
ERIC DOMPELING
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 488.
LYNN JOHNSEN, President and Co-Founder
Dowland-Bach Corporation
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 488.
MARK HYLEN, President
Kakivic Asset Management
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 488.
DAVE HAUGEN, Vice President
Lynden Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 488.
RANDY BRAND
Great Northwest Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 488.
GEORGE BERRY
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to many provisions
of HB 488.
MERRICK PIERCE
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to many provisions
of HB 488.
TIM BECK
North Pole, Alaska
POSITION STATEMENT: Testified in opposition to many provisions
of HB 488.
MIKE KOY
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to many provisions
of HB 488.
JANE HAIGH
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to many provisions
of HB 488.
ACTION NARRATIVE
CO-CHAIR RALPH SAMUELS called the House Resources Standing
Committee meeting to order at 12:36:08 PM. Representatives
Samuels, Seaton and Ramras were present at the call to order.
Representative LeDoux, Elkins, Crawford and Kapsner were on
teleconference. Representative Kerttula was also present and
Representative Gara was on teleconference.
HB 488-OIL AND GAS PRODUCTION TAX
CO-CHAIR SAMUELS announced that the only order of business would
be HOUSE BILL NO. 488, "An Act repealing the oil production tax
and gas production tax and providing for a production tax on the
net value of oil and gas; relating to the relationship of the
production tax to other taxes; relating to the dates tax
payments and surcharges are due under AS 43.55; relating to
interest on overpayments under AS 43.55; relating to the
treatment of oil and gas production tax in a producer's
settlement with the royalty owner; relating to flared gas, and
to oil and gas used in the operation of a lease or property,
under AS 43.55; relating to the prevailing value of oil or gas
under AS 43.55; providing for tax credits against the tax due
under AS 43.55 for certain expenditures, losses, and surcharges;
relating to statements or other information required to be filed
with or furnished to the Department of Revenue, and relating to
the penalty for failure to file certain reports, under AS 43.55;
relating to the powers of the Department of Revenue, and to the
disclosure of certain information required to be furnished to
the Department of Revenue, under AS 43.55; relating to criminal
penalties for violating conditions governing access to and use
of confidential information relating to the oil and gas
production tax; relating to the deposit of money collected by
the Department of Revenue under AS 43.55; relating to the
calculation of the gross value at the point of production of oil
or gas; relating to the determination of the net value of
taxable oil and gas for purposes of a production tax on the net
value of oil and gas; relating to the definitions of 'gas,'
'oil,' and certain other terms for purposes of AS 43.55; making
conforming amendments; and providing for an effective date."
12:37:11 PM
ERIC DOMPELING, Anchorage, said he is employed in the oil and
gas industry and he understand the critical role that continued
investment by the industry plays in Alaska's economy. He said
the tax credits and annual allowance contained in HB 488 will
achieve their goal of continued development of fields under
production and of stimulating increased development by current
and new investors in Alaska. The legislation may be a necessary
step in providing fiscal stability the companies will need to
build a multi-million dollar gas project. He said he is
concerned about the significant tax increase to an industry that
already provides roughly 90 percent of Alaska's state revenues.
He said it may have a negative impact on attracting future
investment. He spoke of global competition. It was not that
long ago that Alaska experienced a down swing from low oil
prices, he added. The down cycle will be repeated in the
future. He said getting a fair share of oil profits means
growing the size of state government. He urged the committee to
consider how the bill will affect the growth of Alaska's economy
and getting a fair share of private sector jobs that will only
come from new oil and gas investments.
12:39:09 PM
LYNN JOHNSEN, President and Co-Founder, Dowland-Bach
Corporation, said he is a past president of the Alaska Support
Industry Alliance and he is concerned about the ramifications of
any additional tweaking of HB 488. The additional revenue to
Alaska is close to $1 billion, above and beyond the current
revenue. He said he heard no mention of the yield to the state
from encouraging investments, which is possible if taxation is
competitive with other oil producing areas. He said oil
producers will react to the incentives over the next 30 to 40
years. These are additional revenues to businesses like his,
and employees of those businesses pay property taxes, buy
groceries and automobiles, and send their kids to college. The
proposed profit-based petroleum production tax (PPT) increases
the effective tax rate to between 14.5 and 15 percent, and the
risk of raising that rate may cause the industry goose that lays
the golden eggs to fly away.
12:41:41 PM
MARK HYLEN, President, Kakivic Asset Management, said his firm
provides inspection and engineering services to the oil and gas
industry. He noted that he employs nearly 200 people, and 100
percent of his company's revenues are derived from the oil and
gas industry. He said he has been actively involved in the oil
industry for ten years and has seen significant reduction in oil
production with oil prices from $8 to $65 a barrel. He said he
sees an ever-increasing need to be efficient and competitive as
a contractor. He noted a significant improvement in safety and
technology, such as directional drilling, which minimizes the
impacts on the environment. He said the oil companies have been
respectful of Alaskans' concerns, "and I believe it is time we
showed them the same respect." He said HB 488 increases taxes.
There has been a tremendous amount of new jobs that have been
created in the oil and gas industry this last year, and he is
concerned about the impact higher taxes will have on future
Alaskan jobs. The new tax is the first step in getting to a gas
pipeline, he opined. The oil and gas industry already funds 90
percent of state government, and he is disappointed in the
ability of the state to create a long-term fiscal plan. He
asked what would be achieved by adding more money to the state
treasury. He said that in an effort of getting Alaska's fair
share, there could be a loss of future jobs for Alaskans. He
said he supports the bill because it is a stepping-stone for
investors to build a multi-billion dollar gas project, but he
encouraged the committee to consider the ramifications that
changing the bill would have on jobs.
12:44:14 PM
CO-CHAIR SAMUELS said creating a long-term fiscal plan should be
done now, when the state doesn't need money. It will be the
perfect opportunity to look at how the state will handle things
over a wide range of prices, including $20 a barrel oil.
12:44:54 PM
DAVE HAUGEN, Vice President, Lynden Inc, said he supports HB
488. He said his company is a transportation and logistics
company and knows the importance of fair taxes and their
relation to investment decisions. Lynden supports the 20
percent tax rate, which will raise over $1 billion in revenue
and double severance tax revenues overnight. He said Lynden
staff believe that the administration has considered all the
factors for the bill and has done an excellent job in balancing
revenue, future development, and other long-term effects on
Alaska. "We need to keep in mind that the final objective we
are all striving for is a gas pipeline project that will require
an investment in excess of $20 billion." The investment
required to produce undeveloped resources will require an
additional $100 billion beyond the pipeline investment, he
added. He said all of the investments will certainly impact
Lynden's business. He said Lynden is concerned about the lack
of a state fiscal plan for managing surpluses in high price
environments and for balancing budgets when revenues are low.
He said the state budget may go as high as $3.8 billion in two
years. He added that the PPT will add an additional $1 billion
on top of the projected surplus. The state needs to be very
careful in determining the right strategy to ensure a long-term
healthy economy, he opined. High oil prices have hidden the
impact of low production. He said Alaska should encourage large
investments in new and expanded production and the construction
of a gas pipeline.
12:48:15 PM
RANDY BRAND, Great Northwest Inc, said he was representing his
company and the Oil Support Industry Alliance. He said any tax
increase can be a disincentive to investment. He asked what the
state will do with the current surplus. "Are we just building
the hungry elephant? How will we get by when prices are low or
when the petroleum is gone?" He asked if the state will price
itself out of the market.
12:50:00 PM
GEORGE BERRY, Fairbanks, said this is the most important tax
legislation since statehood. He requested taking a similar tack
"as our 55 constitutional delegates did some 50 years ago and to
look for what is best for Alaska overall." He said to consider
the oil tax legislation by itself and not allow the producers
and governor to sway the legislature's commitment to uphold the
state constitution as it applies to natural resources, which
must be managed for the maximum benefit of all Alaskans. He
recommended a documentary called "The Forty-Ninth Star," which
could help the legislature feel the energy the 55 Alaskans
brought to the table to do what was best for all Alaskans and
not just one segment of the state.
MR. BERRY said the 25/20 [tax/credit ratio] is a better approach
for HB 488. Exemptions, credits and deductions should be kept
to a minimum and include only those expenses that occurred in
the state. He said that farming out work across the globe
should not be billable as tax deductions in Alaska. He said
separate accounting was "lobbied away." Separate accounting
gave a fair tax on the industry, he added. He said Alaska's
path with the producers is only parallel, with many items in
common, but the interest of the producer's shareholders should
not be above the citizens of Alaska. "We own the resource," he
stated. "You can bargain from a position of strength if you
decide to do so. The people of this state will support you on
this issue." He said the state lost five percent by one phone
call in one afternoon. "I hope the governor will let the
answering machine take the next call."
MR. BERRY said, having worked in the industry for almost 30
years, it can be a sound relationship but should be negotiated
from a position of strength. "Will you be remembered as the
legislature that buckled to the governor and the secret
negotiations on the gasline, or the one that stood tall with the
support of the fellow Alaskans to protect our common interest on
our natural resources as our state constitution mandates?"
12:54:25 PM
CO-CHAIR RAMRAS asked why he is suggesting a 25/20 ratio.
MR. BERRY said it is fair. If he were a legislator he would be
pushing for 30 percent and negotiate down. He noted that the
overall tax burden on the industry in Alaska put it at the
bottom of the barrel across the globe. He stated that he is not
against credits and some of the incentives, but at least a 25
percent [tax rate] is appropriate.
CO-CHAIR RAMRAS said the state is trying to balance a lot of
things and stay competitive. He wants to attract companies to
get the last barrel of oil--not just the next barrel.
12:56:19 PM
MERRICK PIERCE, Fairbanks, said he appreciated that the
legislature has resisted the administration and industry's
desire to fast track HB 488. He encouraged the committee's
process and asked for more public input, "and you're likely to
get a lot of input from a lot of really bright Alaskans on this
issue." He said HB 488 is a disaster and should be scrapped.
It appears to have been written or influenced by "those who view
Alaska as a simple colony to be raped and pillaged."
MR. PIERCE said the tax is not progressive, and all
eventualities must be addressed, including times of high oil
prices. He noted that if oil went up to $100 per barrel, Alaska
citizens will suffer immense hardships from the high cost of
fuel, while the oil companies would enjoy windfall profits. And
yet, he noted, there is no progressivity built into the
proposal. The effective date is wrong, "even industry partisans
have acknowledged that we have lost billions by not revising oil
tax structures years ago." Why should we deliberately lose
additional hundreds of millions by going with the July 1 date?
he asked. "It just adds insult to injury."
MR. PIERCE said his third concern is big. The legislation is
highly complex, and he would like to see alternative methods of
taxation presented with more simplicity. He said Governor
Murkowski is unconcerned with the complexities that have cost
the state hundreds of millions of dollars in numerous litigation
settlements over the past few decades. He said tax incentives
should try and address forces that may be at work to manipulate
the price of North Slope crude. He noted an article from the
Fairbanks News Miner about antitrust litigation between the port
authority, BP and ExxonMobil Corporation. He read from the
article about allegations of mergers and acquisitions by two oil
companies conspiring to restrict development on the North Slope
to keep the price of natural gas at record highs. The article
also accuses the companies of boycotting the authorities and
other groups' proposals to build a gas pipeline. "What if these
allegations are true? If there is a conspiracy at work involved
in natural gas, does it reasonably follow that similar
arrangements might be at work with regard to oil production and
pricing?" he asked. If that is the case, he suggested that an
oil reserve tax might be better than various tax credits. He
said he would like to see it discussed. He said the effective
tax rates are too low, and the state will lose money when the
price of oil is below $27 a barrel. "This legislation does not
address all future eventualities acceptably." He noted that the
governor told the legislature that it must pass HB 488 in order
to get a gas pipeline, but he won't tell the body or the public
what the key details are. If this is the deal that Alaskans
must accept to get a gas pipeline, forget it-we don't need it,
he said. He promoted passing a gas reserves tax, like HB 223,
because then the state will be negotiating from a position of
strength to make sure it gets maximum benefit.
1:01:00 PM
CO-CHAIR RAMRAS said he just got a copy of the News Miner
article. He said he is working on the issues that Mr. Pierce
addressed.
1:01:41 PM
TIM BECK, North Pole, said he is speaking for himself, but he is
on the Fairbanks Northstar Borough Assembly. He said he is
concerned with HB 488 given the all-time high oil prices. He
said oil is only half the equation. "Do not pass this
legislation without seeing the other piece of the puzzle which
is the gasline contract." He said he has asked how much money
the oil companies have taken out of Alaska compared to their
investments, but the oil industry has continued to say that is
proprietary information. The industry is probably already
counting their money, he said.
1:03:09 PM
CO-CHAIR RAMRAS asked how Mr. Beck thinks the process is going
after three weeks of working on HB 488, and if he thinks the
legislature is giving it a good look.
MR. BECK said if the bill passed without the gasline contract
being disclosed, there will be a lot of people looking for
Representative Ramras's seat this fall.
CO-CHAIR RAMRAS said he wants to make sure this legislation
stands on its own.
MR. BECK said the governor has made it very clear that these two
pieces, the contract and the oil tax change, are integral and
one supports the other. He said he likes to see the whole
picture before approving half of it. He said the legislature
should see the entire proposal, "because what you may gain in
this oil tax change, you may well lose in your gasline
proposal."
CO-CHAIR RAMRAS said he doesn't work for the governor; he works
for District 10 and Alaskans. This legislation needs to stand
on its own, and the state is sorely in need of a revision of the
ELF program, he stated. "I have tried to consider this as if
there is no gasline rather than to try to look to see the other
piece of the equation." An overhaul of our severance tax which
is old and sagging is the way he is approaching HB 488. "I
assure you it has been dismissed by myself and many of our
colleagues that this is connected to a gasline."
1:06:05 PM
MR. BECK said he appreciates that, and he is concerned that the
industry had a private council with the governor and they gained
five percent from one afternoon. "I would love to be able to do
that when I'm negotiating a contract." He said that indicates
to him that somebody got a good deal.
1:06:35 PM
CO-CHAIR RAMRAS noted that he has seen the borough "do that with
the governor." He said, "We've got to be careful not to run the
industry out of the state of Alaska by taxing them to the nth
degree." He said he is not saying that the governor's proposal
is the right one. He said his economics class in high school
taught him that there is no such thing as a free lunch, and
people need to learn how to live in the real world. He said
given a choice of shooting low or shooting high [on taxation],
he would rather shoot low and lose some state money and leave
the vibrant oil industry intact. That will be his take, he
said.
1:07:48 PM
MR. BECK said he applauds Representative Ramras for his efforts.
It is clear to the industry they are working with comparative
safety on the North Slope without anyone shooting at them. "If
they are not willing to give us a fair price for our
product...leave it in the ground and let our kids develop it."
He added, "Let's not sell ourselves short. This contract has
some strong implications with regard to the proposed gas line
contract, and to disconnect those two, I think would be
irresponsible."
1:08:43 PM
CO-CHAIR RAMRAS said the oil companies are the engine of Alaska.
He said the option of leaving the resource in the ground implies
there is no urgency, and that is not an approach Alaska can
take. He said the state can't posture belligerently, and it
must be mindful of the global economy and the need to get our
hydrocarbons to market. He noted that 89 percent of Alaska's
economy is derived from hydrocarbons. He wants to ensure that
future Alaskans won't pay a state sales or income tax.
1:10:48 PM
MIKE KOY, Anchorage, said he has worked for BP for over 11 years
in various capacities, including business development, which
includes strategy and economic evaluation of gas sales from the
North Slope. He has also worked on mergers, acquisitions and
finance. He noted that he is on a leave of absence and is free
to speak with "all the knowledge and perspective of someone from
within the industry without any of the associated limitations or
constraints." He said most oil companies use fixed prices when
making investment decisions, and those prices have tended to be
in the $20 to $30 per barrel range. Within this price range is
where the tax regime needs to look attractive relative to other
places in the world in order to attract investment, he said, and
what happens outside of that range is important, but largely
immaterial in making investment decisions. This, coupled with
the state's objectives, is important in determining a tax
structure. He added that he believes the basis for HB488 is
reasonable, and basing the tax on profits is a good thing. But
he said it misses the mark because it increases the risk to the
state by reducing the aggressive nature of the current tax
without sufficiently allowing the state to participate in the
upside. He opined that the legislature should implement a
graduated profit tax structure that increases the state's
proportional share as the price goes up. He said it should kick
in at a price high enough not to impact investment decisions,
and he thinks it should kick in at $30 per barrel. Secondly,
the 20 percent tax incentive is reasonable in and of itself, he
stated. Most oil companies use fixed prices to make investment
decisions, and providing a tax incentive outside of this
investment range is a concession by the state without any
outstanding benefit. High oil price is incentive enough, and
the state should consider tapering off the tax incentive as
prices increase, he said. He suggested allowing a higher tax
incentive on viscous oil to bring it on line faster. The claw
back is a negotiating ploy by the oil companies, and should be
removed, he stated. Finally, he said oil fiscal terms have no
bearing on the economics of a gas pipeline; they are not related
at all except for negotiating. He said it is important to
consider oil tax legislation apart from a gas pipeline and
ensure oil fiscal terms are not included in a gas contract.
1:16:18 PM
REPRESENTATIVE SEATON asked what Mr. Koy would suggest for a
more aggressive tax when oil was low-priced.
MR. KOY said he would suggest a tax basis that isn't necessarily
tied as much to oil price. The current severance tax is tied to
revenues, and it can be set to have a fixed component, such as a
minimum severance tax rate that is in place no matter what oil
prices are, and that will provide cover to the state if prices
go down, and then as the price of oil goes up, there should be a
graduated system to get more and more as prices go up.
1:17:43 PM
REPRESENTATIVE SEATON said testimony from economists suggested
keeping the ELF system when prices are low so taxes don't drop
off as fast.
MR. KOY said yes, there are other systems that are more
appropriate, and what he would consider would be starting from
the current structure with a minimal severance tax rate for a
fixed lower boundary when prices are low. When prices are high,
create an excess rent tax or windfall tax to allow the state to
capture more and more rent. That would preserve the low side
and allow the state to participate in the high side. It would
create a band where the tax structure still attracts investors.
The committee took an at-ease from 1:19:26 PM to 1:31:00 PM.
The committee took an at-ease from 1:31:47 PM to 1:34:40 PM.
JANE HAIGH, Fairbanks, said she has recently read about Soapy
Smith, the famous con man of Skagway, Alaska. She said the
negotiations resemble a shell game. "If you believe that these
oil companies have set up this shell game so that you can win in
a basically blind negotiation, I think you should go back and
study your history of con men." She said she objects to the
process that the legislature has been given by Governor
Murkowski and the oil companies. She noted that the new tax
could be in force for the next 20 to 40 years, and the
legislature is not given the information on the gasline. She
suggested the legislature wait for another opportunity to
negotiate a gasline and oil tax in an open process.
1:36:38 PM
CO-CHAIR RAMRAS said he would recommend the book "100 Years of
Solitude" because "if we continue to press this point that is
what Alaska will be experiencing." He said the objective is to
work with the oil companies, and it is not a shell game. It is
complex and serious he stated.
MS. HAIGH said it is serious and needs to have an open process.
She said it could never be open when the decision on the oil tax
must be done before seeing the deal with the gas line. She
noted that the resources will be there and are not going away,
"whether we get them in time to build our dream houses or
whether the resources are developed for our children, I think it
is important for us to get a fair deal."
1:38:32 PM
CO-CHAIR RAMRAS said the legislature had a caucus, which Ms.
Haigh probably considers to be a secret caucus. The caucus went
over the future budget of Alaska, and there are many parts,
particularly in health, education and social services, that are
growing at such an enormous rate that they will swamp the
current surplus in the near future. He said that it has been
ginned up in the press and by the governor that HB 488 is tied
to the gasline deal. He stated that HB 488 is a stand-alone
piece of legislation. The ELF is no longer working and the
legislature has an opportunity to fix it, he opined. He said
there have been meetings that have been attended by 24 house
members out of 40, and the legislature has been meeting nonstop
with everything else nearly grinding to a halt. He said that
whether Alaska gets a gasline or not, this is an opportunity for
the open process of reviewing oil taxation. He said the state
may or may not get a gasline deal, and the legislature does not
have the luxury of waiting. He said the state can't tax the oil
companies to death.
1:41:21 PM
MS. HAIGH said she agrees it is an amazing opportunity to redo
the oil taxes, but it is important to keep them separate. There
is an overtone that it better be something that oil companies
like. She said she saw PR ads on television from the oil
companies suggesting that this is part of the debate.
The committee took an at-ease from 1:42:57 PM to 2:29:22 PM.
[HB 488 was held over]
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:29 PM.
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