Legislature(2005 - 2006)HOUSE FINANCE 519
07/26/2006 10:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB3001 | |
| HB3003 | |
| HB3004 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB3001 | TELECONFERENCED | |
| *+ | HB3003 | TELECONFERENCED | |
| *+ | HB3004 | TELECONFERENCED | |
HOUSE BILL NO. 3001
An Act relating to the production tax on oil and gas
and to conservation surcharges on oil; relating to
criminal penalties for violating conditions governing
access to and use of confidential information relating
to the production tax; amending the definition of 'gas'
as that definition applies in the Alaska Stranded Gas
Development Act; making conforming amendments; and
providing for an effective date.
10:13:37 AM
Representative Hawker declared potential conflict of
interest because a member of his family is employed by the
oil and gas industry in Alaska; he requested to be excused
from participating & voting. Representative Foster
OBJECTED.
Representative Hawker asked that a roll call vote be taken
regarding his vote exclusion on HB 3001. Co-Chair Chenault
said it was not his intent to vote on any bills at the
current meeting.
Co-Chair Meyer noted his own conflict of interest but since
it is not the intent to move the bill, he reserved the
motion until the vote.
Representative Hawker withdrew his request, noting he would
not participate in the hearings until a Committee vote was
taken.
Representative Foster commented that it is inappropriate for
a member of the Finance Committee not to participate during
discussions on complex issues.
Representative Holm agreed, relating the oil industry
history with most legislative members.
10:19:24 AM
Co-Chair Chenault declared his own conflict, yet encouraged
members to participate during the committee process. He
encouraged Representative Hawker's participation.
Representative Hawker voiced his appreciation.
10:20:59 AM
ROBYNN WILSON, DIRECTOR, DIVISION OF TAX, DEPARTMENT OF
REVENUE, referred to a comparison matrix meant to highlight
two approaches to the Petroleum Production Tax (PPT). (Copy
on File.)
Ms. Wilson explained the four columns:
· CSSB 2001(FIN), version F;
· HCS SB 2001 (FIN), version X.A,
· Conference CS SB 2001, version C.A;
· Governor's bill, version A.
Ms. Wilson pointed out that the handout provides a "limited"
matrix highlighting the differences between those versions
and discussing the ramifications. She indicated that the
bill is consistent with the Conference Committee substitute
and instead of using a statewide system, there would be a
few slightly different areas - the North Slope, Cook Inlet
special treatment and the 'other' areas. The matrix
identifies the tax rate, progressivity surcharge, credits
for annual loss, credit usage floor, gas (GRE) transition
credit, base allowance credit, new area development credit,
sunset of new area development credit, oil spill, and
transition payment for each.
Ms. Wilson discussed the separate Economic Limit Factor
(ELF) rate for Cook Inlet oil & gas. The Governor's bill
contains no progressivity surcharge; the Administration
believes that progressivity is not needed.
10:25:24 AM
Ms. Wilson referenced the annual credit loss at various
rates. She highlighted the credit usage floor & the
differences resulting, which the Conference Committee placed
at 22.8%. That version also provides for a 3% floor; the
cap credits could not be used to reduce the tax below 3% of
the gross & North Slope region. The floor was eliminated in
the Governor's version. She pointed out that gas (GRE) had
not been a feature in recent versions of the bill.
Ms. Wilson explained the transitional investment credit
(TIE). The Governor's bill maintains the language indicated
in the Conference Committee version and provides for reviews
of the 2 for 1.
10:28:28 AM
Ms. Wilson related that the base allowance credit of $12
million dollars, based on production, varies depending on
which bill version is considered. She pointed out that only
Version F (CSSB 2001 (FIN)) is not based on production.
10:29:52 AM
Ms. Wilson discussed development credits for some parts of
the State, not Cook Inlet. That credit amounts to $6
million dollars, available at $500 thousand dollars per
month, for areas not in the North Slope or Cook Inlet; the
language is consistent with the Conference Committee
substitute. The credit has a rolling ten-year sunset for
new area development.
Ms. Wilson addressed the oil spill component and the
transition payment, which is the same as the Conference
Committee version. She noted that the graph clarifies the
amendment.
10:31:49 AM
Co-Chair Chenault inquired about the difference about the
TIE credit in the Governor's bill and the Conference
Committee version. Ms. Wilson said there is no difference
and highlighted why it should be "corrected". A page number
change resulted with no progressivity included in the
Governor's bill.
Co-Chair Chenault requested Ms. Wilson explain the fiscal
impact.
10:33:54 AM
Ms. Wilson explained that fiscal note #2 by the Department
of Revenue includes funding for regulation & contractual
regulation writing for ten positions. During various
revisions, the number of audit positions has fluctuated.
Co-Chair Chenault asked about the increase to the new note
as compared to the others. Ms. Wilson offered to research
that information.
10:35:23 AM
Co-Chair Chenault pointed out that the plan before the
Committee brings the bill back to the original 20/20 as
proposed by the Governor and excludes the progressivity
surcharge.
HB 3001 was HELD in Committee for further consideration.
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