00 HOUSE CONCURRENT RESOLUTION NO. 39 01 Establishing the Alaska Royalty and Revenue Task Force. 02 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 WHEREAS the oil and gas industry operates in a diverse, competitive, and global 04 landscape; and 05 WHEREAS the state receives more than 70 percent of its unrestricted general fund 06 revenue from taxes and royalties on the production of its oil and gas resources; and 07 WHEREAS the legislature has a constitutional obligation to develop the state's 08 resources for the maximum benefit of Alaskans; and 09 WHEREAS Alaska's major oil and gas taxes are the oil and gas property production 10 (severance) tax (AS 43.55), which was last significantly revised in 1989, the oil and gas 11 corporate income tax (AS 43.20.072), which was last significantly revised in 1981, and the oil 12 and gas exploration, production, and pipeline transportation property tax (AS 43.56), which 13 was enacted in 1973 and has had only relatively minor changes since then; and 14 WHEREAS it is appropriate to reevaluate the state's present system of oil and gas 15 taxes at this time because the scope and cost of oil and gas production operations have 16 significantly changed since the various pieces of the system were last put in place; and 01 WHEREAS a tax structure that retains an inadequate value of those resources for 02 Alaskans violates that constitutional obligation; and 03 WHEREAS the maximization of the benefits from the production of its oil and gas is 04 in the best interest of the state; and 05 WHEREAS maximizing oil and gas production is in the best interest of the state; and 06 WHEREAS the tax and royalty structures that the state uses to maximize the benefits 07 of oil and gas production in the state can affect the production of oil and gas in the state; and 08 WHEREAS the tax and royalty structures in place in the state's oil and gas sector are 09 a portion of the cost of production; and 10 WHEREAS, in examining the oil and gas tax system, it would be imprudent to 11 evaluate any portion of the tax system in isolation; and 12 WHEREAS the decisions to invest in new exploration and production are made by 13 multinational corporations; and 14 WHEREAS these decisions are made based on global portfolios of production assets; 15 and 16 WHEREAS the global competitiveness of the state's oil and gas sector directly 17 influences investment in the state's oil and gas sector; 18 BE IT RESOLVED that the Alaska State Legislature establishes the Alaska Royalty 19 and Revenue Task Force to review and analyze the state's current oil and gas royalty and tax 20 structures; and be it 21 FURTHER RESOLVED that the task force shall be composed of nine members to 22 include 23 (1) seven members of the legislature chosen jointly by the presiding officers of 24 the House of Representatives and the Senate, three of whom shall be chosen from a list 25 provided jointly by the minority leaders of the House of Representatives and the Senate; and 26 (2) two members, not members of the legislature, chosen jointly by the 27 presiding officers of the House of Representatives and Senate; and be it 28 FURTHER RESOLVED that the Speaker of the House of Representatives shall 29 appoint the task force chair; and be it 30 FURTHER RESOLVED that the task force craft policies for recommendation to the 31 Twenty-Fourth Alaska State Legislature that would maximize the long-term benefits of the 01 state's oil and gas resources to the state; and be it 02 FURTHER RESOLVED that, in crafting policies that would maximize the long-term 03 benefits to the state, the task force consider the state's competitiveness globally in attracting 04 capital to its oil and gas sector; and be it 05 FURTHER RESOLVED that the task force address the factors affecting the state's 06 competitiveness; and be it 07 FURTHER RESOLVED that, in crafting policies that maximize the long-term 08 benefit to the state, the task force evaluate all of the mechanisms the state and its 09 municipalities use to recover revenue from oil and gas production; and be it 10 FURTHER RESOLVED that the task force may retain expert consultants for the 11 purposes of assisting the task force in its mission; and be it 12 FURTHER RESOLVED that the task force begin work on June 1, 2004, or as soon 13 after that date as possible; and be it 14 FURTHER RESOLVED that the task force may meet during the interim; and be it 15 FURTHER RESOLVED that the members of the task force shall serve without 16 compensation but are entitled to transportation expenses, and the members who are legislators 17 may claim per diem under the per diem allowance policy adopted under AS 24.10.130 and the 18 members who are not legislators are entitled to per diem as authorized for members of boards 19 and commissions under AS 39.20.180; and be it 20 FURTHER RESOLVED that the task force shall submit a report and proposed 21 legislation to the Twenty-Fourth Alaska State Legislature on the date of commencing of the 22 First Regular Session; and be it 23 FURTHER RESOLVED that the task force is terminated not later than the 24 adjournment of the First Regular Session of the Twenty-Fourth Alaska State Legislature.