Legislature(2007 - 2008)HOUSE FINANCE 519
11/08/2007 05:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Statewide Testimony on Oil and Gas Issue | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB2001 | TELECONFERENCED | |
JOINT
HOUSE FINANCE COMMITTEE
SENATE FINANCE COMMITTEE
November 8, 2007
5:38 p.m.
CALL TO ORDER
Co-Chair Chenault called the House Finance Committee meeting
to order at 5:38:44 PM.
HOUSE MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Harry Crawford
Representative Richard Foster
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas Jr.
HOUSE MEMBER ABSENT
Representative Bill Stoltze, Vice-Chair
SENATE MEMBERS PRESENT
Co-Chair Lyman Hoffman
Co-Chair Bert Stedman
Senator Fred Dyson
Senator Kim Elton
Senator Charlie Huggins
Senator Danny Olson
Senator Joe Thomas
SENATE MEMBERS ABSENT
none
ALSO PRESENT
Senator Tom Wagoner.
PRESENT VIA TELECONFERENCE
Paul Kendall, Anchorage; Michael Tavoliero, Anchorage; Bill
Warren, Kenai; Jan Brophy; Tom Lakosh, Anchorage; Bret
Chambers; Steve Dentor; Lawrence Bredman, Manley Hot
Springs; James Fisher, Soldotna; Fred Sturman, Soldotna;
Rhonda Boyles, Fairbanks; Jerry Walker, Fairbanks; Mike
Milligan, Kodiak; Donald Benson, MatSu; Eric Dompeling, The
Alliance, Anchorage; Paul Laird, The Alliance, Anchorage;
Jim Gilbert, President, Udelhoven Oilfield Systems,
Anchorage; Maynard Tapp, Anchorage; Jeanine St. John,
Anchorage; Jerry McCutcheon, Anchorage; Tara Sweeny, ASRC,
Anchorage; Keith Sanders, CIRI, Anchorage; David Godstein,
Backbone, Anchorage; John Shively, Resource Development
Council, Anchorage; Jim Decker, Anchorage; Keith Silver,
Anchorage; Harry McDonald, Anchorage; Tom Hendrix Jr.,
Anchorage; Bart Armfield, Brooks Range Petro. Corp.,
Anchorage; Matthew Fagnani, Nana Management Systems; Jim
Orr, Employed by AK Public Employees Association; Marshall
Byrd; Mary Whitmore; Caroline Bolar; Merrick Peirce; Frank
Sepico [Many of the off-net testifiers did not identify
their location].
GENERAL SUBJECT(S):
^STATEWIDE TESTIMONY ON OIL AND GAS ISSUE
The following overview was taken in log note format.
Handouts will be on file with the House Finance Committee
through the 25th Legislative Session, contact 465-6814.
After the 25th Legislative Session they will be available
through the Legislative Library at 465-3808.
TIME SPEAKER DISCUSSION
5:39:16 PM Co-Chair Convened the Joint Senate and House
Chenault Finance Committees in order to hear
statewide testimony on oil and gas
issues.
5:42:00 PM PAUL KENDALL, Referenced the testimony he submitted
ANCHORAGE on file. He voiced support for PPT and
added support for a gross percentage.
He correlated the actual use in an
average family home. Alaska is a source
of natural gas. He recommended that the
oil companies come forward to provide
testimony. He was disturbed about the
package currently before the Committee.
5:47:32 PM MICHAEL Addressed concerns with the fair share
TAVOLIERO, concept and the process of how that
ANCHORAGE would be implemented.
5:50:34 PM BILL WARREN, Testified in support of a fair share
KENAI for the resources of Alaska. He
supported exploration of Prudhoe Bay &
supported testimony heard from British
Petroleum (BP). He supported the 25%
on the base tax with a high
progressivity and urged movement on
ANGDA.
5:53:59 PM JAN BROPHY, He pointed out all the places that the
KENAI oil companies make money. He warned
that by 2030, the demand for oil will
be quadrupled in order to supply the
world's demand. He recommended a gross
tax. The price per barrel of oil has
doubled. He concluded that legislators
represent Alaskan citizens not the oil
companies.
5:59:49 PM TOM LAKOSH, Submitted his testimony. He stressed
ANCHORAGE that the committee substitute versions
before the Committees are
unconstitutional as is the ACES bill
because it does not protect public
interest.
6:06:44 PM BRET CHAMBERS, Favored continuing the current PPT
system to provide enough time to see if
it can work.
6:07:50 PM STEVE DENTON, Addressed the issue of family values
and fair share. He pointed out that
his family has been involved in the
resource industry for many years. Mr.
Denton mentioned the permanent fund
opportunities and how that meets the
fair share promise.
6:11:21 PM LAWRENCE Recommended taking 1% of the final
BREDMAN, number and raising the tax to fund
MANLEY HOT transportation needs. The federal gas
SPRINGS tax funds the current state
transportation needs, but there are
many roads that need attention. He
mentioned the Dalton Highway and
highway systems that support the Alaska
North Slope.
6:16:45 PM RHONDA BOYLES, She opined that the free enterprise
FAIRBANKS system is the most successful means of
achieving economic justice. Alaska
needs to take stewardship of the land
compatible with the unique environment.
She urged that legislation be adopted
that supports that platform. She
worried about less production on the
economic resource. She supported a
fair and balanced approach and noted
support for the testimony of Mr.
Hanley.
6:21:36 PM JERRY WALKER, Worried about potential failure of
SELF, AGIA. He spoke in support of positive
FAIRBANKS business and the need for fiscal
security. He warned that the rules
should not be continually changed. He
supported the progressivity provision
without change.
6:24:06 PM JAMES FISHER, He recommended an increase in the tax
SOLDOTNA structure to the highest possible
number. He addressed the Gaffney Kline
and Associates' analysis. He urged
that the legislature take strong
action.
6:26:45 PM FRED STURMAN, Spoke to fair share and reprimanded
SOLDOTNA, legislators for taking citizens' fair
share. He urged that the budget be cut
and expenses lowered. He voiced
opposition to any increases in
government.
6:28:37 PM DONALD BENSON, Encouraged the members of the
MAT-SU Committees to support the Senate
Judiciary Committee version and the
House Resources Committee version of
PPT, which he felt brought back a fair
share of Alaska revenues. He stressed
the Governor's support throughout the
State and maintained that ACES ensures
that Alaska will be treated as a fair
partner.
6:31:46 PM MIKE MILLIGAN, Drew attention to the New York Times
KODIAK article regarding 77% of the world's
oil being held in reserve by the oil
companies with no national equity. He
suggested the creation of another oil
company similar to ARCO.
6:34:56 PM ERIC Spoke about the decline in production
DOMPELING, development. He observed that Alberta
THE ALLIANCE has seen a slow down of resource
ANCHORAGE, development due to an increase in
Anchorage taxes. He warned about dipping into
the Capital Budget Reserve (CBR). He
questioned the current plan. He urged
that long term jobs and opportunities
not be sacrificed for a short term
gain.
6:37:54 PM PAUL LAIRD, He expressed concern regarding further
THE ALLIANCE, raising taxes on the oil companies and
Anchorage how this impacts investments of oil
companies. He went on to say that
"fair share" means keeping oil
companies operating in Alaska. He
supports keeping PPT in place.
6:40:35 PM JIM GILBERT He said the state should not raise
PRESIDENT, taxes on oil companies. He pointed out
UDELHOVEN the extensive operations of the oil
OILFIELD companies. He went on to outlined the
SYSTEMS, number of contributions his employees
Anchorage provide to his community. He further
underlined the importance of a
partnership with oil companies rather
than viewing the relationship as
adversarial.
6:45:54 PM MAYNARD TAPP, He urged the Committee to NOT raise
Anchorage taxes. He stressed that any changes
should make oil development more
attractive.
6:47:33 PM JEANINE ST. Defined "fair share" as good jobs &
JOHN, good future. She urged the committee
Anchorage not to raise taxes.
6:49:54 PM JERRY Referenced the topping plant/refining
MCCUTCHEON, issue. He did not support supplementing
Anchorage companies refining plants.
6:52:18 PM TARA SWEENY, Referenced sec. 36 and sec. 34 of
ASRC, HB2001. Privately owned data used for
Anchorage the state benefit should remain
confidential. She underlined that this
was a right of the company.
6:55:48 PM KEITH SANDERS, Echoed concerns of previous the speaker
CIRI, regarding having to release seismic
Anchorage data.
6:57:42 PM DAVID He noted the balance of attempting to
GODSTEIN, receive fair share without dampening
BACKBONE, investment. He said the companies will
Anchorage not pull out of Alaska or stop
investing because of a tax increase.
He supported the 25% tax with .4
progressivity, and an increase penalty.
7:01:37 PM JOHN SHIVELY, He spoke against raising taxes on the
RESOURCE oil companies.
DEVELOPMENT
COUNCIL,
Anchorage
7:06:24 PM JIM DECKER, He noted that he works in oil and gas
Anchorage industry and spoke in support of PPT.
He is opposed to the proposed ACES
plan. He referred to AS 43 and noted
that the word "reasonable" was added
before "cost". He felt this would
increase litigation and have the
unintended consequences of acting as a
disincentive. He went on to say that
government has grown considerably and
can not be sustained. He felt the
industry would perceive that taxes
would be raised to support government.
He said excess revenues should be
placed in a reserve.
7:12:37 PM KEITH SILVER, He observed that he is a 45 year
Anchorage resident. He expressed concern over
raising taxes and the potential of
creating an unstable environment, which
would make oil companies less receptive
to exploration and development.
7:14:57 PM HARRY He stated he is the owner of a trucking
MCDONALD, company. He urged the committee to
Anchorage leave the current tax system in place.
7:17:40 PM TOM HENDRIX He emphasized that he works for a
JR., Anchorage company that benefits from the
prosperous partnership with the oil
companies. He urged the committee to
pass legislation that encourages
exploration and development. He did
not support raising taxes
7:20:03 PM BART ARMFIELD, He anticipated that his company would
BROOKS RANGE make significant investments under PPT,
PETRO. CORP., but cautioned that any change to the
Anchorage tax would bring uncertainty. He went
on to note that ACES would decrease
capital expenditures by companies and
companies would go elsewhere.
7:23:35 PM MATTHEW He observed that his company thrives
FAGNANI, NANA when oil companies are thriving. He
MANAGEMENT maintained that raising taxes on the
SYSTEMS industry will not aid the state and
will discourage exploration and
investment, which in turn effects
companies like his.
7:27:06 PM JIM ORR, He referenced the provision in the bill
EMPLOYED BY AK regarding auditors and the exemption of
PUBLIC specific employees.
EMPLOYEES
ASSOCIATION
7:31:06 PM MARSHALL BYRD He felt that the administration's
proposal of raising taxes is a
emotional reaction. He supported the
PPT under the current law.
7:34:11 PM MARY WHITMORE She supported leaving the current law
in place and did not support raising
taxes. She noted that 30 days is not
enough time to make good tax policy
7:36:00 PM CAROLINE BOLAR Asked if Alaska is getting a fair share
from any industry. She supported
putting addition revenues into the
Permanent Fund.
7:40:34 PM MERRICK PEIRCE Noted that Alaska's crude oil is worth
$25.7 billion. He felt that the
current law is not giving Alaska its
fair share. He went on to express
concerns about fuel costs in Fairbanks
and noted that the effects on the
housing market. He supported investing
additional revenues.
7:43:20 PM FRANK SEPICO Supported not raising taxes.
7:45:18 PM #ADJOURNMENT The meeting was adjourned at 7:44 PM
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