Legislature(2023 - 2024)SENATE FINANCE 532
04/27/2023 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB114 | |
| HB39 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 39 | TELECONFERENCED | |
| += | HB 41 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 114 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 27, 2023
1:35 p.m.
1:35:32 PM
CALL TO ORDER
Co-Chair Olson called the Senate Finance Committee meeting
to order at 1:35 p.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Ken Alper, Staff, Senator Donny Olson; Pete Ecklund, Staff,
Senator Bert Stedman.
SUMMARY
SB 114 OIL & GAS PRODUCTION TAX; INCOME TAX
SB 114 was HEARD and HELD in committee for
further consideration.
CSHB 39(FIN) am(brf sup maj fld)(efd fld)
APPROP: OPERATING BUDGET/LOANS/FUND; SUPP
CSHB 39(FIN) was HEARD and HELD in committee for
further consideration.
CSHB 41(FIN) am
APPROP: MENTAL HEALTH BUDGET
CSHB 41(FIN) was SCHEDULED but not HEARD.
Co-Chair Olson discussed the agenda.
SENATE BILL NO. 114
"An Act establishing an income tax on certain entities
producing or transporting oil or gas in the state;
relating to the oil and gas production tax; and
providing for an effective date."
1:36:13 PM
Co-Chair Olson relayed that there was invited testimony
scheduled for the bill the following week. The committee
would consider a new Committee Substitute (CS).
1:36:52 PM
AT EASE
1:36:56 PM
RECONVENED
Co-Chair Stedman MOVED to ADOPT proposed committee
substitute for SB 114, Work Draft 33-LS0641\R (Nauman,
4/25/23).
Co-Chair Olson OBJECTED for discussion.
1:37:32 PM
KEN ALPER, STAFF, SENATOR DONNY OLSON, discussed the
changes in the proposed CS. He recalled that the committee
had adopted a CS two weeks previously that had removed the
ring-fencing provision. He identified that there had been a
technical issue that had been brought to light by industry,
which he wanted to clarify. He drew attention to Section 4
on Page 3 of the bill; which was a provision of the bill
brought forward by the sponsor that indicated that the per-
barrel credit earned on a field should only be usable to
the extent the company was reinvesting capital in the same
field.
Mr. Alper made note of the word "unit" on line 30 of the
new CS and explained that the previous version of the bill
had the words lease or property. He detailed that there
had been concern that the language could be interpreted to
mean that companies had to spend the money on the same
lease or participating area, while the sponsors intent was
that the spending could be anywhere on the unit and be able
to use all the per-barrel credits earned from production on
the unit.
Co-Chair Olson WITHDREW his objection. There being NO
OBJECTION, it was so ordered.
SB 114 was HEARD and HELD in committee for further
consideration.
1:39:30 PM
AT EASE
1:41:23 PM
RECONVENED
Co-Chair Olson handed the gavel to Co-Chair Stedman.
CS FOR HOUSE BILL NO. 39(FIN) am(brf sup maj fld)(efd fld)
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; repealing
appropriations; amending appropriations; making
reappropriations; and making supplemental
appropriations."
1:41:33 PM
Co-Chair Stedman relayed that there had been a need for
clean-up language for the previous version of the operating
budget. The committee would consider a CS with the
clarifying language and consider two amendments.
Senator Merrick MOVED to ADOPT proposed committee
substitute for CSHB 39(FIN), Work Draft 33-GH1347\H (Marx,
4/26/23).
Co-Chair Olson OBJECTED for discussion.
1:42:53 PM
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, recalled that
there had been a technical amendment related to salary
adjustment correction that had been adopted the previous
day. The technical amendment was the only change reflected
in the proposed CS.
Co-Chair Olson WITHDREW his objection. There being NO
OBJECTION, it was so ordered.
1:43:52 PM
AT EASE
1:44:17 PM
RECONVENED
Senator Kiehl MOVED to ADOPT Amendment 1.
Senator Wilson OBJECTED for discussion.
Senator Kiehl spoke to Amendment 1, which would remove
conditional wordage related to abortions and would add back
some General Fund (GF) money that the CS removed. He
continued that the amendment would put the bill back into
compliance with the Alaska Constitution. He cited that the
language in the bill was not necessary to comply with
federal law, and the state always followed federal law when
it came to Medicaid dollars. He asserted that the language
was not needed to follow the federal law. He emphasized
that the courts had looked at the language and the language
violated the law.
Senator Kiehl acknowledged that there were strongly held
beliefs on the topic of abortion, and noted that the Alaska
Supreme Court had held repeatedly that the constitutional
right to privacy included a decision a decision on when or
if to become a parent. He explained that without the
adoption of Amendment 1, the state would still have to pay
for the procedures and would have a budget that did not
follow the states foundational document. He urged members
to support the amendment and have a budget that was square
with the constitution.
1:46:22 PM
Senator Wilson spoke in opposition to the amendment. He
thought the language was in the bill because there were
many Alaskans and many legislators in both bodies that felt
that the legislature should not be using state dollars, via
Medicaid or GF, to pay for abortions. He commented on the
strong feelings in his district pertaining to the subject.
He hoped that one day the Supreme Court interpret the right
to privacy differently.
Senator Merrick was adamantly opposed to the amendment and
relayed that the majority of her constituents were opposed
to the amendment. She shared that she had a teenage birth
mother, and had been adopted at birth. She thought it was
important to stand up for children that could have the
opportunity in the future.
Co-Chair Stedman also opposed the amendment. He
acknowledged the difficulty of the issue. He thought the
language in the bill had been used for many years.
Co-Chair Olson relayed that as a medical doctor he realized
that abortion was a passionately-felt issue that divided
people. He understood that women in need of life-saving
care would receive the attention needed under the current
bill. He was not in favor of the amendment.
Senator Kiehl restated that the issue was one with very
passionate beliefs. He agreed that Co-Chair Olson's point
was correct in that the language in the bill would not
prevent people from getting medical care.
Senator Kiehl MOVED to WITHDRAW Amendment 1. There being NO
OBJECTION, it was so ordered.
1:49:57 PM
Senator Bishop MOVED to ADOPT Amendment 2.
Co-Chair Stedman OBJECTED for discussion.
Senator Bishop spoke to Amendment 2, which restored
$4,965,300 in GF to the Department of Environmental
Conservation (DEC) for state assumption of 404 primacy [of
the Clean Water Act]. He recalled that the previous year
there had been debate on the issue and differences between
the House and Senate. He recalled that the Conference
Committee had settled upon $1 million for a comprehensive
study.
Senator Bishop recalled that there were only three states
that had assumed the primacy, but other states were working
towards the goal. He reasoned that in order to assume the
program, it would be necessary to seed the program with GF
money before federal dollars would follow. He asserted that
there were no federal dollars to the three states that
currently had 404 primacy, but the matter was being
actively pursued by Alaska's congressional delegation. He
used the example that the last quotes on the states
natural gas pipeline had been $800 million in mitigation
damages for wetlands. He cited that if homeowners had
wetlands to backfill, it would be necessary to pay for an
offset with cash or a trade to fulfill a 404 permit
obligation.
Senator Bishop reminded that in 2005, the legislature had
passed a law to have primacy over the 402 program, which he
thought was paid for with half federal funds. When the
legislature passed the bill in 2005, it took until 2008 for
the United States Environmental Protection Agency to pass
over the primacy to DEC.
1:53:09 PM
Senator Merrick asserted that assuming 404 primacy would
streamline permitting and provide more predictability and
stability. She thought the state had a proud history of
developing things cleaner, safer, and more environmentally
sound than anywhere in the world. She opined that Alaska
held itself to a higher standard than the federal
government. She thought that with two-thirds of the
country's wetlands, it was of the utmost importance for the
state to assume 404 primacy. She mentioned letters of
support. She thought the amendment would ensure that
permitting was efficient and that investment and
development increased, and the environment would be
protected.
Co-Chair Stedman commented that 404 primacy was another
tough issue. He thought he was one of the legislators that
had voted for statutory changes to take on 404 primacy
several years previously. He thought the financial
environment had changed. He had concerns with the agency's
ability to absorb a new program including funding,
administering, and hiring for the new program. He hoped
that in the future the federal government would come
forward with a 60 percent to 70 percent match to pay for
the program. He commented that the structure was place but
there was currently a conversation just regarding funding.
He did not feel it was the right time to move forward with
the change. He thought the prices to pay for development
were cumbersome and extreme. He thought there were
underlying issues with 404 permitting. He commented that he
had constituents on both sides of the issue. He did not
support the amendment.
1:56:28 PM
Co-Chair Olson considered the idea that Alaska sounded like
the kind of place where individuals lived off the grid. He
mentioned miners in his district and thought the state
assuming 404 primacy would make it easier for industry. He
mentioned the budget proposed by the other body, which was
in deficit. He mentioned the constricted budget and thought
it was the wrong time for the state to assume the program.
He would not support the amendment.
Co-Chair Stedman MAINTAINED his objection.
A roll call vote was taken on the motion.
IN FAVOR: Wilson, Bishop, Merrick
OPPOSED: Kiehl, Hoffman, Olson, Stedman.
The MOTION FAILED (3/4).
CSHB 39(FIN) was HEARD and HELD in committee for further
consideration.
Co-Chair Stedman discussed the agenda for the following
day.
ADJOURNMENT
1:59:15 PM
The meeting was adjourned at 1:59 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 39 work draft version H.pdf |
SFIN 4/27/2023 1:30:00 PM |
HB 39 |
| SB 114 work draft version R.pdf |
SFIN 4/27/2023 1:30:00 PM |
SB 114 |
| SB 114 Public Testimony Packet 1.pdf |
SFIN 4/27/2023 1:30:00 PM |
SB 114 |
| HB 39 Amendment 1 Kiehl.pdf |
SFIN 4/27/2023 1:30:00 PM |
HB 39 |
| HB 39 Amendment 2 Bishop.pdf |
SFIN 4/27/2023 1:30:00 PM |
HB 39 |