HB 111-OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS  9:22:58 PM CHAIR TARR announced that the only order of business would be HOUSE BILL NO. 111, ""An Act relating to the oil and gas production tax, tax payments, and credits; relating to interest applicable to delinquent oil and gas production tax; and providing for an effective date." [Before the committee were the CSHB 111(FIN) and SCS CSHB 111(FIN).] 9:23:00 PM CHAIR TARR advised that the Alaska House of Representatives and the Senate had approved SCR 202, allowing the committee to take official action on HB 111. She briefly explained the points of agreement and major features of the bill to include as follows: the end of cash credits statewide, effective July 1, 2017; establish a carry forward annual loss program allowing 100 percent of the carry forward lease expenditures to be deducted in the calculation of future production taxes once the property comes into production; ring fencing that ensures carry forward lease expenditures may only be deducted in the calculation of future taxes after the project that incurred those expenses also comes into regular production; a down lift starting after the tenth year a lease expenditure had been carried forward on a non-producing property, or seventh year for a property in production, will be reduced in value by 10 percent based on the value of the preceding year; establish a working group to address oil and gas tax issues with new consultants; allow application of unpaid credits toward corporate income taxes and production tax audits with certain limitations, such as the CVR language; interest rates at 5.25 percent above the federal reserve rate; and technical amendments, suggested by the Department of Revenue, related to retroactive regulation making to accommodate the July 1, 2017 effective date for the end of the cash credits, as well as the CVR language to clarify limitations. 9:25:08 PM CHAIR TARR explained that the proposed conference committee bill makes changes to the versions passed in the House of Representatives and the Senate and therefore requires limited powers of free conference, detailed in a memorandum the committee will sign. She explained that Sec. 38 is entirely new and provides transition language to allow for the retroactive regulation making to accommodate the July 1, 2017 effective date for the elimination of cash credits and therefore requires free conference powers. Chair Tarr entertained a motion to request the necessary limited and free conference powers. 9:25:40 PM CHAIR GIESSEL made a motion that the committee pass limited powers of free conference for HB 111, and that Uniform Rules 42(a) and 42(b) be suspended relating to tax credits eligible for purchase by the state during calendar year 2017. There being no objection, the motion passed. 9:26:19 PM The committee took an at-ease from 9:26 p.m. to 9:28 p.m. 9:28:01 PM CHAIR GIESSEL made a motion that pursuant to receiving the powers and suspension of the Uniform Rules as requested, the Conference Committee on HB 111 recommends that the House of Representatives and the Senate adopt CCSHB 111, Version 30- LS0450\OO, Shutts/Nauman, 7/15/17, and its forthcoming fiscal notes, with individual recommendations. CHAIR TARR advised that the motion before the committee is to send the report to its respective bodies recommending the approval of Conference CSHB 111, Version 30-LS0450\OO. 9:29:10 PM A roll call vote was taken. Representatives Tarr, Josephson, and Talerico and Senators Giessel, Stedman, and Olson voted in favor of passing Conference CSHB 111, Version 30-LS0450\OO, with its forthcoming fiscal notes, to the committee's respective bodies. There being no objection, Conference CSHB 111 passed out of the Conference Committee on CCS HB 111.