04/19/1994 08:30 AM Senate FIN

                                                                               
  CS FOR HOUSE BILL NO. 498(FIN)                                               
                                                                               
       An Act providing for exploration incentive credits  for                 
       activities  involving  locatable and  leasable minerals                 
       and coal  deposits on  certain land in  the state;  and                 
       providing for an effective date.                                        
                                                                               
  Co-chair Pearce directed  that CSHB  498(Fin) be brought  on                 
  for discussion and  explained that it  began the same as  SB
 which was  heard by committee at the prior meeting.  She                 
  then referenced Amendment  No. 1,  by Senator Kerttula,  and                 
  Amendment No. 2,  by Co-chair Frank.   Senator Kelly  voiced                 
  his  understanding  that previous  discussion  of  the issue                 
  included  limiting the bill to new exploration projects.  He                 
  then noted  that the  oil and  gas incentive credit  earlier                 
  passed by the  Senate reflects  a "much tighter  bill."   He                 
  spoke to provisions of that legislation and  asked that CSHB
(Fin) be held for consideration  at a subsequent meeting.                 
                                                                               
                                                                               
  Senator Kerttula asked  that department  staff speak to  his                 
  local  hire  amendment.  Co-chair  Pearce  also  noted  that                 
  Amendment No.  2, by  Co-chair Frank, was  requested by  the                 
  department and  asked that  staff come  before committee  at                 
  this time.                                                                   
                                                                               
  JERRY  GALLAGHER,  Director, Division  of  Mining,  Dept. of                 
  Natural Resources, explained that Amendment No. 2 relates to                 
  a concern expressed in Senate  Resources regarding impact on                 
  trust  lands.    The  proposed  amendment  would  allow  the                 
  department to  make that  determination by  regulation.   He                 
  voiced his belief that credits could not be granted on trust                 
                                                                               
                                                                               
  lands.                                                                       
                                                                               
  Senator  Rieger  inquired  concerning  amounts  involved  in                 
  retroactive  provisions  back  to  January  1,  1994.    Mr.                 
  Gallagher remarked that  no real  answer is available  since                 
  the credit only applies to new mines that go into production                 
  within the next  fifteen years.   Ongoing exploration as  of                 
  this  date  would  be  covered  by the  retroactive  clause.                 
  Senator Rieger asked if the credit would be applied "mine by                 
  mine."  Mr. Gallagher responded  affirmatively.  He directed                 
  attention to  page 3,  line 2,  and noted  that addition  of                 
  "based on the production  from the parcel or site"  ties the                 
  credit  to a  specific  piece  of  land.   Both  exploration                 
  expenditures and the credit are property specific.                           
                                                                               
  Co-chair Pearce directed that the bill be HELD for action at                 
  the evening meeting.                                                         
                                                                               
  End:      SFC-94, #64, Side 2                                                
  Begin:    SFC-94, #66, Side 1