Legislature(2025 - 2026)BARNES 124
05/15/2025 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HJR26 | |
| HB119 | |
| HB206 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 26 | TELECONFERENCED | |
| += | SJR 19 | TELECONFERENCED | |
| + | HB 119 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 206 | TELECONFERENCED | |
HB 206-OIL AND GAS DATA
2:30:28 PM
CO-CHAIR BURKE announced that the final order of business would
be HOUSE BILL NO. 206, "An Act relating to disclosure of oil and
gas production tax information."
2:30:52 PM
COREY ALT, Staff, Representative Donna Mears, Alaska State
Legislature, continued his PowerPoint from the House Resources
Standing Committee on May 14, 2025, regarding HB 206 [hard
copies in the committee packet]. He explained that he would
begin with slide 7 titled "Alaska's Unique Structure," which
showed a graph comparing gross and net tax comparisons between
$70 oil and $65 oil. The description read as follows [original
punctuation provided]:
Under a net tax, the public has a greater interest in
transparency because of the higher revenue volatility
inherent in the system.
He explained why under a net tax system such as in Alaska, the
public has more interest in the producer tax information than
they have in some other jurisdictions. He called the
committee's attention to the difference in the taxable volume
column which compared the values of a net tax versus a gross tax
system. He posited that economists describe a net tax as more
efficient over the long term, leading to greater investment in
oil and gas. He pointed to the bottom of the chart which shows
a change in the taxable value of $70 oil and $65 oil and
explained that the assumption of a net tax system by the state
of Alaska increases a degree of risk sharing between the oil
producers and the state in a way that is not seen in producing
jurisdictions such as Oklahoma and Texas.
2:33:33 PM
MR. ALT responded to a question from Representative Coulombe by
explaining that the chart on slide 7 was a hypothetical example
that he produced. He explained that the numbers were close to
those used by the state of Alaska, pointing out that gross taxes
in states across America are usually in the 4 to 7 percent
range.
2:34:20 PM
MR. ALT addressed several concerns posed by Representative
Rauscher regarding risks to the oil companies and the state,
explaining that HB 206 itself makes no changes to oil and gas
tax law, the collection of taxes, or the structure of the tax
system, and there would be no impact on revenue. The bill is
meant to give insight into the question of whether the tax
system is performing up to the goals we set for it. He assured
the committee there was no intention to create a situation
causing competitive damage. Also, the intention of the bill was
not to force disclosure that was not already provided. For
example, the production tax value that would be required by this
bill is already disclosed by some oil companies in other
jurisdictions around the world that use net tax systems,
including some that operated in Alaska.
2:39:21 PM
REPRESENTATIVE DONNA MEARS, Alaska State Legislature, addressed
several questions from Representative Rauscher, explaining that
one of the reasons the bill was crafted late in the session was
to enable conversations with the industry prior to releasing the
bill. In addition, they wanted it to sit over the interim, so
those conversations could continue. She agreed that data can be
commercially sensitive and would not want sensitive information
to be exposed.
2:40:21 PM
MR. ALT responded to a question from Representative Rauscher by
clarifying that some data would come from information disclosed
by companies depending on their status in the marketplace as
well as disclosures from the American stock exchange and the
SEC. Continuing adjustments would be made to the bill's
language to ensure it doesn't include competitively damaging
information.
2:42:06 PM
MR. ALT answered a series of back-and-forth questions from
Representative Saddler regarding hypotheticals, tax rates, and
disclosures which narrowed down to one specific statement and
whether that was what he had said. Mr. Alt said he would have
to listen to the tape to confirm a direct quote. He explained
that the intention of the legislation was not to force
disclosure of information that is not disclosed already by
companies.
2:44:46 PM
CO-CHAIR BURKE responded to Representative Saddler's demand for
an answer by asking Representative Mears to respond.
REPRESENTATIVE MEARS maintained that Mr. Alt had provided the
relevant information Representative Saddler asked for and that
there was information disclosed in other districts that was not
disclosed in Alaska. She said Mr. Alt had provided a good
background about that level of detail, but they could follow up
with additional specifics.
2:45:46 PM
REPRESENTATIVE BURKE addressed Representative Saddler on the
record to say he had the right to ask questions but not to
badger staff.
2:46:17 PM
MR. ALT moved to slide 8, titled "Alaska's Unique Structure,"
which showed several graphs regarding tax disclosure
requirements, and which read as follows [original punctuation
provided]:
• Some oil-producing states have stronger disclosure
requirements.
• In Texas and North Dakota, producers' tax returns
are public
He explained that there is a disparity in the disclosure
requirements between other gas and oil producing states and
Alaska. The bottom left graph was put out by the Alaska
Department of Revenue regarding the level of investment on the
North Slope. He pointed out that details are not provided about
every unit. He discussed the graph on the right which showed an
example of a tax history document from the Texas comptroller
which had been provided after requesting tax information about a
specific oil producer. The example showed the first page of a
4,000-page volume from one month in 2024 concerning Hilcorp
Energy company. This is an example of the level of detail other
jurisdictions provide. He noted that, unlike Alaska, tax
officials from other states would compile this information into
usable data sets for policy makers and the public.
2:48:08 PM
MR. ALT proceed to slide 9, titled "Alaska's Unique Structure,"
which read as follows [original punctuation provided]:
History:
• In 2006, Alaska transitioned from a gross (ELF) to a
net tax under the
Petroleum Profits Tax (PPT)
• The PPT system lacked sufficient disclosure, both to
the Department of Revenue and the public.
• ACES (2007) implemented the current disclosure
statute, AS 43.55.890, to provide for some disclosure
of producer data.
2:49:22 PM
MR. ALT moved to slide 10, titled "Alaska's Unique Structure,"
which showed a graph detailing lease expenditures and capital
expenditures over time. The slide read as follows [original
punctuation provided]
Weakening Disclosure:
• In 2016, DOR published information on four North
Slope units. Today Prudhoe is the only one.
• Units have very different production and economic
profiles depending on geology and development
2:50:26 PM
MR. ALT explained that the quality of disclosure the Department
of Revenue (DOR) is allowed to provide under law has
deteriorated. He proceeded to slide 11, titled "What's the
Problem?" which read as follows [original punctuation provided]:
Without insight into the profitability of oil
individual producers in particular fields, the
legislature could beunknowingly:
1. Holding back industry to the detriment of all
Alaskans through complex and onerous tax rates
2. Unfairly advantaging some producers over others
3. Incentivizing development of federal land over
state land, decreasing royalty income
4. Allowing the maximum benefit of Alaska's resources
to flow to out-of-state oil producers instead of
Alaskans themselves
He described each of those points in more detail and then turned
to slide 12, titled "What's our solution?" which simply stated,
"Increased transparency."
2:52:25 PM
MR. ALT moved to slide 13, slide 14, and slide 15, titled
"What's our solution?" which read as follows [original
punctuation provided]:
HB 206 would require DOR to publish information about
producers at the unit level upon request:
1. The amount of oil or gas produced by each
working interest owner (WIO) in a unit
2. The gross value at the point of production
(GVPP) by WIO
3. Transportation costs attributable to the
product by WIO
4. Production tax value (PTV) by WIO
5. Tax due by WIO 6. State royalty by WIO
This data is to be released with monthly resolution.
• Most of this information is already public
• Royalty information is produced by DOR
• Production data is available from AOGCC
Transportation costspipeline tariffs and
shipping ratesare largely public
• GVPP is roughly calculable from production data
and public price information.
• What's not?
• Production Tax Value
• Tax Paid
• Some companies publish this information voluntarily.
Others don't. This proposal would level the playing
field.
• HB 206 would provide:
• Transparency for the public and policymakers
• Consistent disclosure in substance and format
across producers
• A meaningful dataset for analysis
• Parity in disclosures between producers
He emphasized that information disclosed by the proposed law
would not be damaging to the companies.
2:54:26 PM
MR. ALT response to a question from Representative Elam
regarding the level of administrative burden this would create.
He referred this question to Mr. Dale Yancy of DOR.
2:57:00 PM
DALE YANCEY, Tax Director, Department of Revenue, answered
questions regarding whether HB 206 would create additional
administrative burden. He explained that DOR did not have that
level of detail available, and it would require additional staff
to aggregate the data. He described the information oil
companies provided on their tax returns and how the aggregation
of data would change with HB 206. He explained that the monthly
filings provided by the oil companies detailed the amount of oil
produced but not how much tax was being paid.
2:59:35 PM
REPRESENTATIVE MEARS pointed out that purpose of bill is to
remedy the fact that this data is only available to legislators
with a signed non-disclosure agreement, and it is not available
to the public. The data exists within the state of Alaska, but
it is not useful.
M. ALT, in response to a comment by Representative Elam, said
that he would defer to the DOR to generate a fiscal note that
would accurately account for data aggregation.
3:01:24 PM
CO-CHAIR BURKE announced that HB 206 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| draft RES CS HB 119 ver G.pdf |
HRES 5/15/2025 1:00:00 PM |
HB 119 |
| HB 206 Presentation HRES 5.14.pdf |
HRES 5/15/2025 1:00:00 PM |
HB 206 |
| HB 119 Summary of Changes N to G.pdf |
HRES 5/15/2025 1:00:00 PM |
HB 119 |