03/06/2007 01:30 PM House FINANCE

HOUSE BILL NO. 48                                                                                                             
                                                                                                                                
     An Act amending  the powers of the board  of trustees of                                                                   
     the  Alaska  Retirement Management  Board  to  authorize                                                                   
     purchase   and   sale   of   transferable   tax   credit                                                                   
     certificates issued  in conjunction with  the production                                                                   
     tax  on oil  and  gas; and  providing  for an  effective                                                                   
     date.                                                                                                                      
                                                                                                                                
Co-Chair  Meyer  noted  that  the  Committee  had  previously                                                                   
considered    the   legislation    and   was   waiting    for                                                                   
correspondence  now  received   from  the  Alaska  Retirement                                                                   
Management Board.  (Copy on File).                                                                                              
                                                                                                                                
REPRESENTATIVE  PAUL SEATON, SPONSOR,  summarized the  bill's                                                                   
intent given the  fiscal condition of refunding  tax credits.                                                                   
The Alaska  Retirement Management  (ARM) Board is  supportive                                                                   
of  both  the  percentage  and   the  mechanism  proposed  to                                                                   
accomplish   it.    Amendment   1,  25-LS0259\E.1,   Bullock,                                                                   
2/12/07,  transfers   the  tax  under  the   exploration  tax                                                                   
credits,   not  addressed   in  the  original   bill.     The                                                                   
Administration requested it be included.                                                                                        
                                                                                                                                
Representative Gara voiced concern  binding the ARM Board and                                                                   
offering only 92% of the credit  value because they would get                                                                   
out bid  often.  His  inclination was  to allow the  Board to                                                                   
bid  higher for  getting credits.    He questioned  provision                                                                   
inclusion requiring after the  first year, the bidding higher                                                                   
than the 92%.                                                                                                                   
                                                                                                                                
Co-Chair  Meyer  inquired  if Representative  Gara  hoped  to                                                                   
attach that language  as a Letter of Intent.   Representative                                                                   
Gara  thought it  could be  included  as a  sectional of  un-                                                                   
codified law.                                                                                                                   
                                                                                                                                
1:47:42 PM                                                                                                                    
                                                                                                                                
Representative Seaton  understood that the  Legislature could                                                                   
at  any time  ask the  ARM Board  to  provide a  report.   He                                                                   
thought it  would be identified  if not working and  that the                                                                   
investment tax credit  would work over time.   Co-Chair Meyer                                                                   
agreed   and   asked   that  the   consideration   be   held.                                                                   
Representative Gara  said he would not offer  an amendment at                                                                   
this time.                                                                                                                      
                                                                                                                                
1:49:20 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  MOVED to  ADOPT  Amendment  1 on  behalf  of                                                                   
Representative  Seaton.  (Copy  on File).  Co-Chair  Chenault                                                                   
OBJECTED for an explanation.                                                                                                    
                                                                                                                                
Representative  Seaton  explained  that the  amendment  would                                                                   
change  the reference  to allow  the application  of the  ARM                                                                   
Board for  credits issued under  Exploration Tax  Credits for                                                                   
the Petroleum Production Tax (PPT) credits.                                                                                     
                                                                                                                                
Co-Chair  Chenault WITHDREW  his OBJECTION.   There  being NO                                                                   
further OBJECTION, Amendment #1 was adopted.                                                                                    
                                                                                                                                
1:50:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer noted the new fiscal note.                                                                                       
                                                                                                                                
Representative  Crawford hoped  that the  bill could  provide                                                                   
necessary  flexibility,  indicating   that  he  supports  the                                                                   
concept  of  the  legislation.   He  worried  that  it  might                                                                   
"entrench" the PPT  and the net profits tax.   He urged a tax                                                                   
on the gross be adopted.                                                                                                        
                                                                                                                                
1:52:51 PM                                                                                                                    
                                                                                                                                
Representative Foster  MOVED to REPORT CS HB 48  (FIN) out of                                                                   
Committee with  individual recommendations  and with  the new                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  HB 48  (FIN) was  reported out  of Committee  with a  "no                                                                   
recommendation"  and with  a new  indeterminate  note by  the                                                                   
Department of Revenue  and a new zero note  by the Department                                                                   
of Administration.                                                                                                              
                                                                                                                                
1:54:07 PM