02/11/2022 01:00 PM House RESOURCES

          HB 287-A: OIL & GAS TAX CREDIT FUND APPROP.                                                                       
                                                                                                                                
1:06:50 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK announced  that the first order  of business would                                                               
be HOUSE  BILL NO. 287, "An  Act making an appropriation  for oil                                                               
and gas tax credits; and providing for an effective date."                                                                      
                                                                                                                                
CHAIR PATKOTAK noted that committee  members should have received                                                               
the  follow-up  to  their  questions  from  the  bill's  [2/9/22]                                                               
hearing.  He invited members to ask any further questions.                                                                      
                                                                                                                                
1:07:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  said she  did not see  an answer  from the                                                               
Department of  Law (DOL)  or the Department  of Revenue  (DOR) to                                                               
her question about  the lapsing fund structure and  the choice of                                                               
language included in HB 287.                                                                                                    
                                                                                                                                
REPRESENTATIVE PATKOTAK  said DOL is  not online but that  a memo                                                               
should have been posted to BASIS regarding the "sweepability."                                                                  
                                                                                                                                
REPRESENTATIVE  RAUSCHER, prime  sponsor, noted  that DOL's  busy                                                               
schedule did not allow for the department to be online today.                                                                   
                                                                                                                                
1:08:49 PM                                                                                                                    
                                                                                                                                
CONOR BELL, Fiscal Analyst,  Legislative Finance Division, Alaska                                                               
State Legislature, responded  to Representative Hannan's inquiry.                                                               
The oil  and gas tax credit  fund is not subjected  to the sweep,                                                               
he explained,  because the  sweep provision  applies to  money in                                                               
the general fund available for  appropriation.  The amount in the                                                               
oil and  gas tax  credit fund has  already been  appropriated, so                                                               
when that money goes from the  fund to producers or companies, it                                                               
is paying for those tax  credits and the legislature doesn't have                                                               
to approve an  appropriation for those payments that  go out, and                                                               
since it  doesn't require further appropriation  it's not subject                                                               
to the sweep.                                                                                                                   
                                                                                                                                
1:09:48 PM                                                                                                                    
                                                                                                                                
COLLEEN  GLOVER, Director,  Tax Division,  Department of  Revenue                                                               
(DOR), added that the oil and  gas tax credit fund is not subject                                                               
to  lapse, and  Mr. Bell's  response answers  the question  about                                                               
whether it is sweepable.                                                                                                        
                                                                                                                                
1:10:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN drew attention  to Mr. Bell's memorandum of                                                               
2/10/22 answering  Representative Schrage's question  about there                                                               
being two bills [HB  250 and HB 287].  She  pointed out that both                                                               
bills include  $60 million for oil  tax credit, which would  be a                                                               
total  appropriation of  $120 million  into the  oil and  gas tax                                                               
credit  fund should  both bills  be enacted.   Given  that amount                                                               
would exceed  the minimum  tax due this  year, she  asked whether                                                               
$60 million  would remain in  the fund  to start out  fiscal year                                                               
2023 (FY 23) or  whether the minimum tax owed for  FY 22 would be                                                               
exceeded.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  RAUSCHER  replied that  the  two  bills would  be                                                               
sorted out  upon reaching the  House Finance Committee,  and that                                                               
that committee  would not let  the appropriations from  each bill                                                               
be added together.                                                                                                              
                                                                                                                                
REPRESENTATIVE PATKOTAK  added that  HB 250  hasn't yet  left the                                                               
House  Finance Committee,  which is  the next  assigned committee                                                               
for HB 287.                                                                                                                     
                                                                                                                                
1:12:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SCHRAGE  asked why  the undesignated  general fund                                                               
(UGF) was used in HB 287  as opposed to the constitutional budget                                                               
reserve (CBR) as previously proposed.                                                                                           
                                                                                                                                
REPRESENTATIVE RAUSCHER  answered that last  year's appropriation                                                               
from the  CBR was  tripped up  because of  the way  the different                                                               
caucuses within  the House  view the  usage of the  CBR.   A [3/4                                                               
vote of each body] is needed to  use the CBR, which is one of the                                                               
reasons it failed.  [Using  the UGF] ensures that the legislature                                                               
doesn't have to go through that again.                                                                                          
                                                                                                                                
REPRESENTATIVE SCHRAGE said  there seems to be  broad support for                                                               
paying off the  state's debts.  He asked whether  it would show a                                                               
stronger statement  of support if  CBR funds were used  given the                                                               
higher vote threshold to fund these  oil and gas tax credits.  He                                                               
further  asked whether  there is  enough  money in  the CBR  from                                                               
which to pull these funds.                                                                                                      
                                                                                                                                
REPRESENTATIVE  RAUSCHER  responded  that  he  already  gave  his                                                               
opinion on why  he chose this route, and he  still believes it is                                                               
the best route.   He offered his opinion that  passing it in both                                                               
bodies  is the  important thing  and would  say more  to the  oil                                                               
companies than not getting the appropriation at all.                                                                            
                                                                                                                                
1:15:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PATKOTAK announced that HB 287 was held over.