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, on behalf of Representative Mears, prime sponsor of
HB 206, continued his PowerPoint from the House Resources
Standing Committee on May 14, 2025, regarding HB 206 [hard
copies in the committee file]. 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.
MR. ALT 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 is a hypothetical example
that he produced. He explained that the numbers are 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 MEARS, as prime sponsor, 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, she wanted it to sit over the interim, so
those conversations could continue. She agreed that data can be
commercially sensitive and she 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, in response to a search for clarification made by
Representative Saddler, 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
CO-CHAIR 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 resumed the PowerPoint presentation of HB 206 by moving
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
MR. ALT 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 Alaska's
Department of Revenue (DOR) 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 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
MR. ALT 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
MR. ALT emphasized that information disclosed by the proposed
law would not be damaging to the companies.
2:54:26 PM
MR. ALT, in response to a question from Representative Elam
regarding the level of administrative burden this would create,
deferred the question to Mr. Dale Yancy of DOR.
2:57:00 PM
DALE YANCEY, Director, Tax Division, 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 the proposed
bill is to remedy the fact that this data is available to
legislators only 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.
MR. ALT, in response to a comment by Representative Elam, said
that he would defer to DOR to generate a fiscal note that would
accurately account for data aggregation.
3:01:24 PM
CO-CHAIR BURKE announced that HB 206 was 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 |