06/02/2016 03:00 PM House FINANCE

HOUSE BILL NO. 4005                                                                                                           
                                                                                                                                
     "An Act  relating to the  mining license  tax; relating                                                                    
     to  the  exploration   incentive  credit;  relating  to                                                                    
     mining  license  application,  renewal, and  fees;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
3:27:06 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Saddler  noted that  the  committee  had a  full                                                                    
discussion pertaining  to the bill in  previous meetings. He                                                                    
echoed  the comments  of Representative  Pruitt. He  did not                                                                    
support the mining  tax but would vote to move  the bill out                                                                    
of committee. He  thought the concept that  the taxes spread                                                                    
the burden on  too few people was a  rhetorical argument and                                                                    
he disagreed.                                                                                                                   
                                                                                                                                
Representative  Gara supported  the bill.  He did  not think                                                                    
the  bill would  raise  much money,  and  regretted than  an                                                                    
amendment  to  the bill  the  previous  day had  failed.  He                                                                    
recounted that  the proposal  had been  for mines  that made                                                                    
over $250,000  per year in profit  to pay an 11  percent tax                                                                    
on profits; which he thought  was modest. He noted that with                                                                    
the amendment that  did not pass the bill  would have raised                                                                    
an  extra $7  million, and  in total  would have  raised $14                                                                    
million. He added  that the mining tax had  not been changed                                                                    
since approximately 1955, and it  was a profit-based tax. He                                                                    
thought  the  current 9  percent  tax  would only  apply  to                                                                    
larger mines. He did not  think larger profitable mines paid                                                                    
very much  back to the state.  He was concerned that  if the                                                                    
same approach  was taken with  every resource  industry, the                                                                    
fiscal gap  would not  go away  and the  burden would  be on                                                                    
those who did not make large amounts of money.                                                                                  
                                                                                                                                
Co-Chair  Neuman  MOVED  to REPORT  CSHB  4005(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative Wilson  OBJECTED. She reminded  the committee                                                                    
that the  bill constituted a  29 percent increase  in taxes.                                                                    
She referred  to a  letter she  had received  that indicated                                                                    
the bill would  deter new investment in the  state and would                                                                    
shorten the  lives of existing  mines. She  discussed future                                                                    
investment in mining  and jobs in the industry.  She did not                                                                    
consider  the tax  to be  trivial. She  was concerned  about                                                                    
diminished mining  investment in  the state and  thought the                                                                    
state should do more  to incentivize mines, oil development,                                                                    
and other industry.                                                                                                             
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Edgmon, Gara, Guttenberg,  Munoz, Pruitt, Saddler,                                                                    
Neuman, Thompson                                                                                                                
OPPOSED: Wilson, Gattis, Kawasaki                                                                                               
                                                                                                                                
The MOTION PASSED (8/3).                                                                                                        
                                                                                                                                
There  being  NO  further   OBJECTION,  CSHB  4005(FIN)  was                                                                    
REPORTED out of committee  with "no recommendation" and with                                                                    
one fiscal impact note from the Department of Revenue.                                                                          
                                                                                                                                
3:33:20 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:36:38 PM                                                                                                                    
RECONVENED