Legislature(2015 - 2016)BILL RAY CENTER 208

06/01/2016 03:00 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB4003 MOTOR FUEL TAX TELECONFERENCED
Heard & Held
+= HB4005 MINING: LICENSE,TAX, FEES; EXPLOR. CREDIT TELECONFERENCED
Heard & Held
+= HB4006 FISHERIES: TAXES; PERMITS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
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."                                                                                          
                                                                                                                                
4:00:27 PM                                                                                                                    
                                                                                                                                
Co-Chair  Thompson   noted  there   had  initially   been  an                                                                   
Amendment  1, but he  had determined  it to  be out  of order                                                                   
due to ongoing litigation.                                                                                                      
                                                                                                                                
Representative  Wilson  MOVED   to  ADOPT  Amendment  2,  29-                                                                   
GH2457\A.5 (Glover/Nauman, 5/28/16) (copy on file):                                                                             
                                                                                                                                
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Co-Chair Thompson OBJECTED for discussion.                                                                                      
                                                                                                                                
4:01:16 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:01:51 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Wilson explained  Amendment 2. She  discussed                                                                   
the committee had  heard plenty of testimony  from the mining                                                                   
community, which  was willing to do  its part, but felt  a 29                                                                   
percent increase  in taxes was too high. The  amendment would                                                                   
decrease  the  9  percent  back to  the  8  percent  multiple                                                                   
committees  had discussed.  She remarked  the increase  would                                                                   
still not  be a good  thing and its  impact was  unknown. She                                                                   
hoped reducing the  number to 8 percent would  have a reduced                                                                   
impact  on the  community. She  believed  everyone needed  to                                                                   
take part in making sure they  were paying for what was going                                                                   
forward.                                                                                                                        
                                                                                                                                
Co-Chair  Thompson  remarked that  "dueling  amendments"  had                                                                   
been submitted  - one  would increase the  tax and  the other                                                                   
would reduce it.                                                                                                                
                                                                                                                                
Vice-Chair  Saddler relayed  that he  had previously  chaired                                                                   
the  House  Resources  Committee.  He  knew  mining  provided                                                                   
numerous   benefits   to   rural   Alaska   including   jobs,                                                                   
infrastructure,  income,  tax-base,  a  way  to  keep  people                                                                   
anchored to their  lands, and other. He was  concerned he had                                                                   
not seen analysis  of what the governor's proposed  9 percent                                                                   
tax would  do to the benefits  of mining in rural  Alaska. In                                                                   
absence of  the analysis he could  not help but  be cautious,                                                                   
which meant supporting the amendment.                                                                                           
                                                                                                                                
Representative Gara spoke in opposition  to the amendment. He                                                                   
stated that at some none of the  bills under discussion would                                                                   
be worth passing. Currently there  was a profits-based mining                                                                   
tax  that had  not been  changed in  approximately 60  years.                                                                   
Companies were  given exploration  credits to help  develop a                                                                   
mine.  Additionally, taxes  only  came in  when profits  were                                                                   
made. Lastly,  the tax  only applied  to income levels  above                                                                   
$100,000  per  year.  He  discussed  that  at  profits  above                                                                   
$100,000 to  roll back $3.5 million  in tax revenue  that was                                                                   
needed  in  a state  with  a  $3.2 billion  to  $3.7  billion                                                                   
deficit. He  continued that every  time someone said no  to a                                                                   
tax on  a profitable  industry the money  would have  to come                                                                   
from somewhere else. He reasoned  if it was in the budget the                                                                   
money had to come from somewhere  - at times it had come from                                                                   
schools, the university, municipal  revenue sharing, seniors,                                                                   
or  other.  He stated  the  money  would  have to  come  from                                                                   
somewhere if  it they did  not determine  a way to  raise it.                                                                   
Alternatively,  there  were other  revenue  raising  options,                                                                   
which would  need to  be increased  (e.g. a larger  Permanent                                                                   
Fund Dividend cut or a larger  income tax). At higher profits                                                                   
he believed it was fair to adjust  the tax. He furthered that                                                                   
companies  were coming  to Alaska  for its  valuable ore.  He                                                                   
reiterated  the tax  only applied  if a  business was  making                                                                   
over $100,000 in profits.                                                                                                       
                                                                                                                                
4:06:45 PM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman  did  not  believe  the  state  paid  mining                                                                   
companies.  He detailed  there was  a "tax  holiday" for  the                                                                   
first two or three years on new mines.                                                                                          
                                                                                                                                
Vice-Chair Saddler stated that  in the mining industry he did                                                                   
not believe $100,000  in profits was substantial  relative to                                                                   
the  investment.  He  referenced  various  types  of  capital                                                                   
investment  mining companies  made  in order  to operate.  He                                                                   
referred to much  discussion about the need  to diversify the                                                                   
state's economy away from mining  and gas. He reasoned mining                                                                   
was a way to increase diversification.  He believed the state                                                                   
needed to do what it could to  support the mining industry in                                                                   
Alaska and not  use it as a "cash cow." He  elaborated mining                                                                   
already provided benefits to the  state well in excess of the                                                                   
amount the state spent to regulate  it. He did not believe it                                                                   
was the proper place to try to get revenue.                                                                                     
                                                                                                                                
4:08:07 PM                                                                                                                    
                                                                                                                                
Representative Edgmon spoke against  the amendment. He stated                                                                   
that if  there was ad  hoc feel to all  of the taxes,  all of                                                                   
the criticism the legislature  directed at the administration                                                                   
for bringing them forward with  not enough analysis, he could                                                                   
equally say there was an ad hoc  feel to the amendments being                                                                   
offered. He discussed the net  taxable income in 2014 for the                                                                   
six major  mines paying  95 percent of  the mining  taxes was                                                                   
$570 million  in total.  He reasoned  the proposed  9 percent                                                                   
tax  would be  $7  million -  when  divided  amongst 6  major                                                                   
multi-national  companies  was not  a significant  amount  of                                                                   
money. Additionally,  the companies  were able to  deduct the                                                                   
state taxes from federal taxes;  therefore, they were able to                                                                   
further  reduce the $7  million. He  addressed the  amendment                                                                   
which  would reduce  the tax  from  9 percent  to 8  percent,                                                                   
which left  him questioning  why the  committee was  "messing                                                                   
around with the  tax in the first place." He  stated if every                                                                   
tax the  state levied  was going  to be  counter to  industry                                                                   
investing in Alaska,  it should not be levying  any increases                                                                   
on the  resource-based companies.  He reiterated many  of the                                                                   
companies were very  large. He furthered that as  much as his                                                                   
enthusiasm  for  the  previous  version  of  taxes  had  been                                                                   
dampened  (if it  ever had  been called  enthusiasm), he  was                                                                   
uncertain  he could  support the  measures  if the  committee                                                                   
kept  chipping  away  at  all   of  the  proposed  taxes.  He                                                                   
explained  the impact  of the  proposed taxes  would go  from                                                                   
marginal to  negligible. He wondered  what the  committee was                                                                   
doing  messing  around  with  the taxes  for  the  amount  of                                                                   
political  dust the issues  were kicking  up. He referred  to                                                                   
discussion about  the cause  and effect relationship  between                                                                   
the  original  taxes  the governor  had  proposed.  When  the                                                                   
committee decided  whether it would  report the bills  out of                                                                   
committee he would  have to look at the issue  from an equity                                                                   
standpoint. He currently  did not see it. He  did not believe                                                                   
there  was an  analysis to  support the  amendment, which  he                                                                   
believed undermined the whole  intentions in the first place.                                                                   
                                                                                                                                
4:11:20 PM                                                                                                                    
                                                                                                                                
Representative  Munoz supported  the amendment  for a  number                                                                   
of   reasons.   One  of   her   concerns  that   during   the                                                                   
administration's  presentation  on the  bill comparisons  had                                                                   
been made  with other  states,  but the states  did not  have                                                                   
similar hard  rock mining  operations. She detailed  Arizona,                                                                   
Nevada,  and Alaska, had  similar operations  and Alaska  was                                                                   
the highest  taxing jurisdiction.  She discussed  that Juneau                                                                   
had two  of Alaska's  large mines -  the Kensington  Mine had                                                                   
taken over  20 years to  begin operation. She  continued that                                                                   
mining was  a capital intensive  industry and  added hundreds                                                                   
of  jobs to  the  state's  economy. She  believed  additional                                                                   
analysis was necessary on what  a tax increase from 7 percent                                                                   
to 9 percent would do.                                                                                                          
                                                                                                                                
4:12:43 PM                                                                                                                    
                                                                                                                                
Representative   Guttenberg  spoke   in  opposition   to  the                                                                   
amendment.  He  reported that  based  on information  in  the                                                                   
committee  packet, the  tax had  not changed  since 1955.  He                                                                   
stated it was possible  to say it was a 25  percent increase,                                                                   
but it  was also  a 2  percent increase.  In 2014 there  were                                                                   
only 14  taxpayers in the bracket  (5 of which were  the very                                                                   
large  mines  and  the  remaining   9  were  small  and  very                                                                   
profitable).  He reasoned  the  tax was  profit-based,  which                                                                   
companies only  paid when profitable.  He furthered  "mom and                                                                   
pop" companies would only pay  an annual license fee if their                                                                   
company earned less than $100,000.  He thought increasing the                                                                   
tax by 1 percent  after 55 years would do nothing  at all. He                                                                   
reasoned that some  of the mines were very  profitable and he                                                                   
believed  it was  completely  appropriate  to  implement a  2                                                                   
percent increase.                                                                                                               
                                                                                                                                
Representative Wilson  countered that it was not  a 2 percent                                                                   
tax, but a 29 percent increase.  She addressed the state cut.                                                                   
She had  asked the Fort Knox  mine (in her district)  what it                                                                   
paid; the mine had paid $7.6 million  to the borough and over                                                                   
$47 million  in revenue over the  past 10 years - it  was the                                                                   
largest property tax payer in  the borough. Additionally, the                                                                   
mine had  paid $17.1 million in  taxes and fees to  the state                                                                   
in  2014;  $7.3  million  in   mining  license  taxes  (which                                                                   
accounted for  31 percent of  the mining license  tax revenue                                                                   
collected by the  state); $9.8 million in payments  to Alaska                                                                   
Mental   Health   Trust   Authority,    the   Department   of                                                                   
Environmental Conservation, and  others; and in 2016 it would                                                                   
pay $8.4  million to  the borough.  She stressed the  amounts                                                                   
were not even part of the discussion.                                                                                           
                                                                                                                                
Co-Chair Thompson  asked how  much the  increase would  be if                                                                   
the bill was implemented.                                                                                                       
                                                                                                                                
Representative  Wilson answered there  would be a  29 percent                                                                   
increase in taxes if the tax was  increased from 7 percent to                                                                   
9 percent. She read from a prepared statement:                                                                                  
                                                                                                                                
     We've heard from the mining industry this increase                                                                         
     would result in deterring new investment in Alaska and                                                                     
     will shorten the lives of existing mines.                                                                                  
                                                                                                                                
Representative  Wilson  continued  that  the  8  percent  tax                                                                   
proposal had  been vetted in  another committee with  all the                                                                   
mines  participating.  She discussed  the  legislation  would                                                                   
impact the  industry, but  the impact  was not known  because                                                                   
the legislature  had not  received a  complete analysis.  She                                                                   
stressed  that  any tax  increase  would have  a  detrimental                                                                   
impact  on  the  mining  industry   and  would  place  future                                                                   
investment, jobs,  and significant local economic  impacts at                                                                   
risk.  She  emphasized the  issue  was  about more  than  the                                                                   
state,  it  was  about  the  state's   communities.  She  was                                                                   
frustrated the  committee had not received  information about                                                                   
how much state resources were  put in. She believed they were                                                                   
merely trying to  fill the state's coffers with  profits made                                                                   
by the various industries.                                                                                                      
                                                                                                                                
Co-Chair Thompson WITHDREW his OBJECTION.                                                                                       
                                                                                                                                
Vice-Chair  Saddler asked to  be a  cosponsor of Amendment  2                                                                   
and Amendment 3.                                                                                                                
                                                                                                                                
4:17:16 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:17:38 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Guttenberg OBJECTED.                                                                                             
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gattis, Munoz, Pruitt, Saddler, Wilson                                                                                
OPPOSED:  Gara,   Guttenberg,  Kawasaki,  Edgmon,   Thompson,                                                                   
Neuman                                                                                                                          
                                                                                                                                
The MOTION to adopt Amendment 2 FAILED (5/6).                                                                                   
                                                                                                                                
4:18:30 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED   to  ADOPT  Amendment  3,  29-                                                                   
GH2457\A.6 (Glover/Nauman, 5/28/16) (copy on file):                                                                             
                                                                                                                                
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Co-Chair Thompson OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative  Wilson addressed the  amendment. She  noted a                                                                   
significant amount  had been heard related to  the issue. She                                                                   
read from a prepared statement:                                                                                                 
                                                                                                                                
     The  exemption for  new mines  is  critical as  projects                                                                   
     look to recoup their investments  as quickly as possible                                                                   
     and  work towards  positive  cash flow.  The more  mines                                                                   
     that we have open, the faster  it will fill our deficit.                                                                   
                                                                                                                                
Representative Gara  asked if the amendment  gave companies a                                                                   
3.5-year tax holiday as opposed  to the 2-year tax holiday in                                                                   
the bill.                                                                                                                       
                                                                                                                                
Co-Chair Thompson  and Representative Wilson answered  in the                                                                   
affirmative.                                                                                                                    
                                                                                                                                
Representative  Gara opposed the  amendment. He  stressed the                                                                   
mining   tax   only   applied   when   profits   were   made.                                                                   
Additionally,   the  state  offered   tax  credits   to  help                                                                   
companies pay for exploration  and development (operating and                                                                   
capital costs). Companies received  the benefit of state help                                                                   
during  development. He  added  it was  not one  of the  more                                                                   
outrageous tax credits the state had on its books.                                                                              
                                                                                                                                
Co-Chair Thompson  asked Representative Gara to  clarify what                                                                   
he meant by state help. He explained  it had taken Kensington                                                                   
Mine 20  years [to begin operations].  He asked if  the state                                                                   
had funded the mine during the entire 20-year period.                                                                           
                                                                                                                                
Representative  Gara answered the  state paid an  exploration                                                                   
credit up  to $20 million  companies could deduct  after they                                                                   
became profitable.  The credits could be deducted  as long as                                                                   
it took to  earn enough profits to the  deductions (companies                                                                   
could deduct up to half their  profits). After the mine began                                                                   
operations companies were allowed to deduct the costs.                                                                          
                                                                                                                                
4:21:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Neuman requested to hear from DOR.                                                                                     
                                                                                                                                
Mr. Burnett deferred the question to Mr. Spanos.                                                                                
                                                                                                                                
Mr. Spanos asked Co-Chair Neuman to repeat his question.                                                                        
                                                                                                                                
Co-Chair Neuman  asked Mr. Spanos  to explain the  mining tax                                                                   
credits.   Mr.  Spanos   answered  that   mines  were   given                                                                   
exploration  tax credits of  up to  $20 million. He  detailed                                                                   
that  expenses incurred  during  exploration  could be  taken                                                                   
over a 15 year-period after a mine began production.                                                                            
                                                                                                                                
Co-Chair Neuman provided a hypothetical  situation in which a                                                                   
mine  took  10 years  to  become  operational. He  asked  for                                                                   
verification  the mine could  deduct up  to $20 million  over                                                                   
the first 15 years.                                                                                                             
                                                                                                                                
Mr. Spanos  answered that no matter  how long a  company took                                                                   
to incur the costs  (such as 20 years) it had  15 years after                                                                   
production began to take the credit.                                                                                            
                                                                                                                                
Co-Chair  Thompson  asked  how  the 2-year  or  3.5-year  tax                                                                   
holiday fit into the 15-year credit deduction process.                                                                          
                                                                                                                                
Mr.  Spanos   explained  that  the  3.5-year   exemption  was                                                                   
currently in statute.  He asked if the question  pertained to                                                                   
how the  tax holiday  fit with  the 15-year credit  deduction                                                                   
period as well.                                                                                                                 
                                                                                                                                
Co-Chair Thompson replied in the affirmative.                                                                                   
                                                                                                                                
Mr. Spanos believed  companies had 15 years of  taxes due. He                                                                   
would have to follow up on the question.                                                                                        
                                                                                                                                
Co-Chair Thompson  surmised companies would receive  a 3-year                                                                   
tax holiday  followed by a  15-year period during  which they                                                                   
could use their credit deductions.  He asked for verification                                                                   
it was a total of 18 years.                                                                                                     
                                                                                                                                
Mr. Spanos  replied that  he believed it  was how  the system                                                                   
worked. He  would have  to double check,  but he  believed it                                                                   
included the first 3.5 years.                                                                                                   
                                                                                                                                
Representative  Gara asked  for  verification that  currently                                                                   
larger mines  received a  3.5-year tax  holiday even  if they                                                                   
were making  profits. The amendment  would maintain  the 3.5-                                                                   
year tax  holiday, whereas  the bill  would decrease  the tax                                                                   
holiday  to a  2-year period.  He  observed it  would not  be                                                                   
possible  for a company  to deduct  credits  when it was  not                                                                   
asked to  pay a profits tax.  He provided an example  where a                                                                   
company  started paying  for profits  in its  fourth year  of                                                                   
operation  and made $40  million. He  asked for  verification                                                                   
the company  could  take all $20  million in  credits in  the                                                                   
first year.                                                                                                                     
                                                                                                                                
Mr. Spanos  replied that the credit  was limited to  one half                                                                   
of a company's  net income. He referred to  the gross profits                                                                   
tax [Note: audio quality poor].                                                                                                 
                                                                                                                                
4:25:57 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  for verification  that a  company                                                                   
could use  the entire  $20 million  in deductions during  its                                                                   
first taxable  year if  it made $40  million in profits.  Mr.                                                                   
Spanos answered in the affirmative.                                                                                             
                                                                                                                                
Representative   Gara  spoke   to  his   opposition  to   the                                                                   
amendment.  He  stressed  that  the  tax  was  profits-based;                                                                   
companies  that  were  not making  profits  were  not  taxed.                                                                   
Additionally, under the legislation  the state gave companies                                                                   
a 2-year  tax holiday  even when  profitable. He believed  it                                                                   
made  sense  to   not  tax  companies  when   they  were  not                                                                   
profitable. He did  not support extending the  tax holiday to                                                                   
3.5  years, which  he believed  was excessive.  He wished  he                                                                   
received the tax holiday on his  income taxes. He thought the                                                                   
2-year period  seemed fair  to generous.  He stated  that the                                                                   
bill raised $7  million and he did not support  continuing to                                                                   
whittle  away at  the amount.  He believed  the public  would                                                                   
have a hard  time swallowing that individual  Alaskans had to                                                                   
pay for the deficit, while companies received tax holidays.                                                                     
                                                                                                                                
Vice-Chair  Saddler spoke  in  support of  the amendment.  He                                                                   
reasoned  that in order  to become  profitable, it  sometimes                                                                   
took a mineral development company  20 to 30 years. He stated                                                                   
the presumption  a  company could  open up  a mine and  begin                                                                   
making profits  within a  year was false.  He stated  it took                                                                   
many years  and significant  expense for  a company  to reach                                                                   
profitability.  He stressed that  Alaska was built  on mining                                                                   
and  he believed  the  land underneath  the  building may  be                                                                   
built on mine tailings [Bill Ray  Center, Juneau, Alaska]. He                                                                   
underscored  a  mine could  last  for decades  when  properly                                                                   
built with  infrastructure investment.  He referred  to mines                                                                   
that  triggered  infrastructure  like  airports,  mills,  and                                                                   
other facilities.  He believed it was cost-effective  to make                                                                   
the  investment to  find  more  ore (e.g.  Red  Dog Mine  and                                                                   
others).  He  opined  that shortening  the  tax  holiday  was                                                                   
nonsensical. He furthered that  shortening the tax holiday to                                                                   
a 2-year  period would  be like penalizing  "a child  for not                                                                   
being  able to  do  the work  of a  grown  man." He  believed                                                                   
restoring  the  tax  holiday   to  the  3.5-year  period  was                                                                   
appropriate.                                                                                                                    
                                                                                                                                
4:30:20 PM                                                                                                                    
                                                                                                                                
Representative Wilson  provided closing remarks  on Amendment                                                                   
3. She read from a prepared statement:                                                                                          
                                                                                                                                
     The State  of Alaska  has very  few incentives  to track                                                                   
     mining investment to the  state and doing away with this                                                                   
     one would  tell the  industry that we  are not  open for                                                                   
     business.  Investment  capital   is  globally  in  short                                                                   
     supply and retaining this  exemption will help us remain                                                                   
     competitive.  If  we  kill   our  industry  or  we  have                                                                   
     investors go somewhere else,  what truly have we gained?                                                                   
                                                                                                                                
Representative Wilson  wondered what would happen  with every                                                                   
investor  who chose  to invest  in  another location  besides                                                                   
Alaska. She  referred to  questions about  why the  state did                                                                   
not  lower some  costs  because  investors were  going  other                                                                   
places. She  stressed the  state was  rich in resources.  She                                                                   
reasoned that it was necessary  to ask why investors were not                                                                   
coming.  She  believed  the  state  should  be  incentivizing                                                                   
investment.  She underscored  that  the issue  was about  the                                                                   
state's long-term future. She  believed the discussion should                                                                   
be about what  the state would look like if  industry decided                                                                   
to  invest elsewhere.  She concluded  the  state would  still                                                                   
receive  profits  by  maintaining the  current  3.5-year  tax                                                                   
holiday. She  hoped the  state would  stay open for  business                                                                   
and would not discourage industry from investing in Alaska.                                                                     
                                                                                                                                
Co-Chair Thompson MAINTAINED his OBJECTION.                                                                                     
                                                                                                                                
A roll call vote  was taken on the motion to  adopt Amendment                                                                   
3.                                                                                                                              
                                                                                                                                
IN FAVOR: Munoz, Saddler, Wilson                                                                                                
OPPOSED:  Gara,   Guttenberg,  Kawasaki,  Edgmon,   Thompson,                                                                   
Neuman, Pruitt                                                                                                                  
                                                                                                                                
Representative Gattis was absent from the vote.                                                                                 
                                                                                                                                
The  MOTION to  adopt Amendment  3 FAILED  (3/7). [Note:  The                                                                   
committee later rescinded action on Amendment 3 and re-                                                                         
voted; the amendment  passed at that time.  See approximately                                                                   
5:14 p.m. for detail.]                                                                                                          
                                                                                                                                
4:33:17 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:46:05 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative   Gara  MOVED  to   ADOPT  Amendment   4,  29-                                                                   
GH2457\A.l (Martin/Nauman, 5/27/16) (copy on file):                                                                             
                                                                                                                                
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     Delete "All new mining operations are exempt from the                                                                      
     tax levied by this chapter for two [THREE AND ONE-HALF]                                                                    
     years after production begins"                                                                                             
                                                                                                                                
     Insert "A new mining operation with a net income under                                                                     
     (c) of this section of                                                                                                     
          (1) not  more than $100,000 is exempt  from the tax                                                                   
          levied  by   this  chapter  for  two   years  after                                                                   
          production begins;                                                                                                    
          (2)  more  than  $100,000  shall pay  half  of  the                                                                   
          license  tax  on mining  provided  in  (c) of  this                                                                   
          section  for  two [ALL  NEW MINING  OPERATIONS  ARE                                                                   
          EXEMPT  FROM THE  TAX  LEVIED BY  THIS CHAPTER  FOR                                                                   
          THREE and ONE-HALF]  years after production begins"                                                                   
                                                                                                                                
Co-Chair Thompson OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative  Gara explained  the  amendment. He  addressed                                                                   
that the  mining tax  was profits-based.  He did not  believe                                                                   
anyone  wanted  to increase  taxes  on  small "mom  and  pop"                                                                   
mining operations.  The amendment  would maintain  the 2-year                                                                   
tax  holiday for  businesses  making  less than  $100,000  in                                                                   
profits  per  year. While  businesses  making  over  $100,000                                                                   
would only pay half the tax rate  during the first two years.                                                                   
He  thought  the  state  should  receive  some  revenue  when                                                                   
companies were profitable. He  believed the proposed tax rate                                                                   
in the bill was around 9 percent;  the amendment would reduce                                                                   
the  tax  to around  4.5  percent  for  profitable  companies                                                                   
earning over $100,000 per year.                                                                                                 
                                                                                                                                
4:49:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Thompson MAINTAINED his OBJECTION.                                                                                     
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg, Kawasaki, Gara                                                                                            
OPPOSED:  Munoz,  Pruitt, Saddler,  Wilson,  Edgmon,  Gattis,                                                                   
Neuman, Thompson                                                                                                                
                                                                                                                                
The MOTION to adopt Amendment 4 FAILED (3/8).                                                                                   
                                                                                                                                
4:49:52 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki  MOVED  to ADOPT  Amendment  5,  29-                                                                   
GH2457\A.3 (Martin/Nauman, 5/27/16) (copy on file):                                                                             
                                                                                                                                
Page 3, line 24, through page 4, line 1:                                                                                        
                                                                                                                                
     Delete all material and insert:                                                                                            
     "*Sec. 6. AS 43.65.0lO(c) is repealed and reenacted to                                                                     
     read:                                                                                                                      
     (c)  The license  tax on  mining is imposed  on the  net                                                                   
     income of the  taxpayer from the property  in the state,                                                                   
     computed   with   allowable  depletion,   plus   royalty                                                                   
     received  in  connection  with mining  property  in  the                                                                   
     state.  The tax  rates  applicable to  the  amount of  a                                                                   
     taxpayer's net income are as follows:                                                                                      
        · over $100,000 and not over $250,000: five percent                                                                     
        · over $250,000 and not over $500,000: $7,500 plus                                                                      
         seven percent of the excess over $250,000                                                                              
        · over $500,000 and not over $1,000,000: $25,000                                                                        
          plus nine percent of the excess over $500,000                                                                         
        · over $1,000,000: $70,000 plus 11 percent of the                                                                       
          excess over $1,000,000."                                                                                              
                                                                                                                                
     Page 4, line 15:                                                                                                           
     Delete "amended"                                                                                                           
     Insert "repealed and reenacted"                                                                                            
                                                                                                                                
Co-Chair Thompson OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Kawasaki  explained that the  amendment sought                                                                   
to change the  brackets [related to the tax  rates applicable                                                                   
to the  amount of a taxpayer's  net income]. He  detailed the                                                                   
brackets had been established  during territorial days (prior                                                                   
to  statehood) in  1955 as  a  way to  fairly distribute  the                                                                   
burden  on mining  operations  within Alaska.  He  referenced                                                                   
Section  6,  page 3  of  the legislation,  which  showed  the                                                                   
original brackets still in statute.  He specified that mining                                                                   
companies earning less than $40,000  in profits did not pay a                                                                   
license tax. Mines  making between $50,000 and  $100,000 paid                                                                   
an assessment  of  5 percent and  $1,500. He  noted the  next                                                                   
bracket  was   for  companies   earning  over  $100,000.   He                                                                   
reiterated that the brackets had  been in place for 60 years.                                                                   
                                                                                                                                
Representative  Kawasaki furthered  amendment was an  attempt                                                                   
to make  the brackets  fair by  adjusting for inflation.  The                                                                   
amendment would  exempt small mining companies  earning below                                                                   
$100,000. The first bracket would  apply to companies earning                                                                   
between $100,000 and $250,000;  the second bracket applied to                                                                   
companies  earning  over  $250,000  to  $500,000;  the  third                                                                   
bracket  applied  to  companies   earning  over  $500,000  to                                                                   
$1,000,000;  and  the  fourth bracket  applied  to  companies                                                                   
earning  $1,000,000  and above.  There  were  roughly two  or                                                                   
three  mines within  each of  the first  three brackets  (the                                                                   
exact  number was  unknown due  to taxpayer  confidentiality)                                                                   
and there  were 5 mines  making over $1,000,000.  He believed                                                                   
the amendment  was very  fair; it  removed the unfair  burden                                                                   
off small miners and addressed the issue of inflation.                                                                          
                                                                                                                                
4:52:42 PM                                                                                                                    
                                                                                                                                
Co-Chair Thompson MAINTAINED his OBJECTION to Amendment 5.                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg, Kawasaki                                                                                            
OPPOSED:  Munoz,  Pruitt, Saddler,  Wilson,  Edgmon,  Gattis,                                                                   
Thompson, Neuman                                                                                                                
                                                                                                                                
The MOTION to adopt Amendment 5 FAILED (3/8).                                                                                   
                                                                                                                                
Representative   Gara  MOVED  to   ADOPT  Amendment   6,  29-                                                                   
GH2457\A.2 (Martin/Nauman, 5/27/16) (copy on file):                                                                             
                                                                                                                                
     Page 3, line 31, following "$100,000":                                                                                     
     Insert "and not over $250,000"                                                                                             
                                                                                                                                
     Page 4, line 1, following "$100,000":                                                                                      
     Insert new material to read:                                                                                               
        · over $250,000: $6,000 plus 11 percent of the                                                                          
          excess over $250,000                                                                                                  
                                                                                                                                
Co-Chair Thompson OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Gara  explained the amendment that  applied to                                                                   
companies earning  over $250,000 per  year. He stated  it was                                                                   
the kind of money  most Alaskans would never see  in any year                                                                   
of their lives. The amendment  would increase the profits tax                                                                   
rate from 9 percent to 11 percent  for companies earning over                                                                   
$250,000.  He  detailed  that  the $7  million  in  projected                                                                   
revenue in  DOR's fiscal note  primarily came from  the large                                                                   
mines  making  above $250,000  per  year. The  amendment  was                                                                   
likely to raise around $7 million.  He noted his business tax                                                                   
for the  restaurant he owned appeared  in his income  tax; he                                                                   
paid  a 25  percent tax.  He continued  a  company coming  to                                                                   
Alaska  to  explore  for  minerals   would  do  so  with  the                                                                   
exploration credit provided by  the state. He did not believe                                                                   
increasing the number to 11 percent  would change a company's                                                                   
decision  to invest  in Alaska  if they  were profitable.  He                                                                   
reasoned the  company would get  to keep the remaining  89 to                                                                   
91  percent of  their profits.  He  understood the  companies                                                                   
would pay other taxes. He believed  the amendment was fair in                                                                   
the time  of a  fiscal crisis  and also  when companies  paid                                                                   
taxes based  on profits.  He added he  would not  propose the                                                                   
amendment on  a mining tax if  the tax was  not profits-based                                                                   
and was imposed on companies losing money.                                                                                      
                                                                                                                                
4:56:42 PM                                                                                                                    
                                                                                                                                
Co-Chair  Thompson had  heard  significant discussion  during                                                                   
the current  meeting that the  mining tax was  profits-based.                                                                   
He had  heard statements  that it was  a gross tax  and other                                                                   
statements   that  it   was   a  net   tax.   He  asked   for                                                                   
clarification.                                                                                                                  
                                                                                                                                
Mr. Burnett  answered that  the mining tax  was a tax  on the                                                                   
margin created  by a mining  operation, which  contributed to                                                                   
the  profits  of a  company.  The  companies may  have  other                                                                   
operations;  therefore,  the tax  was not  based  on the  net                                                                   
income of the company, but on  the net margin remaining after                                                                   
deducting the  costs of mining  operation. The tax  was based                                                                   
on the  margin because  it was not  profit until  other items                                                                   
such as corporate overhead were included.                                                                                       
                                                                                                                                
Co-Chair  Thompson expressed  confusion about  the issue.  He                                                                   
elaborated that his business of  35 years paid tax on the net                                                                   
profit, which deducted his expenses.                                                                                            
                                                                                                                                
Mr.  Burnett  clarified that  the  mining  tax was  based  on                                                                   
profit from  mining operations  after deducting costs  of the                                                                   
mining  operation.  He detailed  it  was different  than  the                                                                   
total  business  profit  because  a company  may  have  other                                                                   
businesses;  it was  a  subset of  a company's  business.  He                                                                   
explained oil  and gas taxes were  based on cash  flow (money                                                                   
going into and out of a company on an annual basis).                                                                            
                                                                                                                                
Co-Chair Thompson  asked what  the tax would  be called  if a                                                                   
company  had only  one  mine. Mr.  Burnett  answered that  it                                                                   
would be  a net profits tax.  He added the company  would pay                                                                   
other local and corporate income taxes.                                                                                         
                                                                                                                                
Mr. Alper elaborated that if the  company that owned the mine                                                                   
was a  corporate tax  payer, the  state's mining license  tax                                                                   
was a  deduction from  the formula that  went into  the state                                                                   
corporate  income tax.  He specified  the mining license  tax                                                                   
was considered an expense.                                                                                                      
                                                                                                                                
4:59:42 PM                                                                                                                    
                                                                                                                                
Representative   Gara   asked   for  clarification   on   the                                                                   
department's  testimony.   He  asked  for   verification  the                                                                   
profits were  the profits  of an operation,  but if  parts of                                                                   
the company related to other business  aspects (e.g. a second                                                                   
mine in Utah) those pieces of  the business were not included                                                                   
in  the  tax.  He  surmised the  tax  aimed  to  contain  the                                                                   
profitability at the specific mine site in Alaska.                                                                              
                                                                                                                                
Mr. Burnett answered in the affirmative.                                                                                        
                                                                                                                                
Vice-Chair  Saddler asked  if the amendment  sponsor  had any                                                                   
analysis showing  the higher tax  bracket would not  harm the                                                                   
mines in that bracket.                                                                                                          
                                                                                                                                
Representative  Gara replied that  logic was the  answer. The                                                                   
amendment only applied to companies  making profits exceeding                                                                   
$250,000 per year.  He did not believe a company  would leave                                                                   
Alaska  when making  over  $250,000 because  of  a 2  percent                                                                   
change in a profits  tax. He believed a company  would not go                                                                   
to the  expense of  investing in Alaska  unless it  found the                                                                   
ore valuable.                                                                                                                   
                                                                                                                                
Vice-Chair Saddler  wondered if there was an  analysis on the                                                                   
percentage of the  net proceeds would amount to.  He asked if                                                                   
the logic  was based on the  idea that it was  appropriate to                                                                   
begin taxing a  company when it earned profits  slightly over                                                                   
the breakeven  point. He asked  whether $250,000 was  a large                                                                   
or small profit for a mining company.                                                                                           
                                                                                                                                
Representative  Gara answered  that  he was  trying to  avoid                                                                   
impacting small mining operations  on the margins that may go                                                                   
out of business if taxes were  increased. He believed profits                                                                   
of  $250,000 or  more  represented  a significant  amount  of                                                                   
money. He thought  if a company was making  over $250,000 per                                                                   
year it  had the means  to contribute  to the state's  budget                                                                   
deficit with  a slight  increase in  the tax. Otherwise,  the                                                                   
revenue  would have  to  come from  people  with less  money,                                                                   
which he was not in favor of.                                                                                                   
                                                                                                                                
Vice-Chair  Saddler  remarked that  the  scale  of costs  and                                                                   
investments  required   for  a  large  mine   in  Alaska  was                                                                   
significantly   larger  than  costs   for  a  restaurant   in                                                                   
Anchorage.                                                                                                                      
                                                                                                                                
5:04:03 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:04:28 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Gara countered  that  restaurants required  a                                                                   
significant amount of money to run.                                                                                             
                                                                                                                                
Co-Chair Thompson MAINTAINED his OBJECTION to Amendment 6.                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Kawasaki, Guttenberg, Gara                                                                                            
OPPOSED:  Munoz,  Pruitt, Saddler,  Wilson,  Edgmon,  Gattis,                                                                   
Neuman, Thompson                                                                                                                
                                                                                                                                
The MOTION to adopt Amendment 6 FAILED (3/8).                                                                                   
                                                                                                                                
5:05:25 PM                                                                                                                    
                                                                                                                                
Co-Chair Thompson MOVED to ADOPT Amendment 7 29-GH2457\A.4                                                                      
(Martin/Nauman, 5/28/16) (copy on file):                                                                                        
                                                                                                                                
     Page 1, line 1, following "credit":                                                                                        
     Insert "and royalty payments"                                                                                              
                                                                                                                                
     Page 3, following line 18:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "*Sec. 5. AS 38.05.150(d) is amended to read:                                                                              
     (d) For the privilege of mining or extracting the coal                                                                     
     in the land covered by the lease, the lessee                                                                               
          (1) shall pay to the  state the royalties specified                                                                   
          in the  lease; the royalties shall  be fixed before                                                                   
          offering  the lease, and  shall be effective  for a                                                                   
          period  of not  more than 20  years; the  royalties                                                                   
          shall be  not less than  five cents a ton  of 2,000                                                                   
          pounds;  [THE  ROYALTY PAYMENT  IS  SUBJECT TO  THE                                                                   
          EXPLORATION  INCENTIVE   CREDIT  AUTHORIZED  BY  AS                                                                   
          27.30;]                                                                                                               
          (2)  shall also  pay an annual  rental, payable  at                                                                   
          the date  of the lease and annually  thereafter, on                                                                   
          the land or coal deposits  covered by the lease, at                                                                   
          a rate  fixed by  the commissioner before  offering                                                                   
          the  lease; the  annual rental  shall be  effective                                                                   
          for a period of not  more than 20 years; the annual                                                                   
          rental shall be not  less than 25 cents an acre for                                                                   
          the  first year  of  the lease,  not  less than  50                                                                   
          cents  an acre  for  the second  year, third  year,                                                                   
          fourth  year and fifth year,  and not less  than $1                                                                   
          an  acre  for  each   year  thereafter  during  the                                                                   
          continuance of the lease;  the rental for each year                                                                   
          shall  be credited  against the  royalties as  they                                                                   
          accrue  for  that year;  each  lease shall  provide                                                                   
          that  the  annual  rental  payment  is  subject  to                                                                   
          adjustment  at intervals of  not [NO] more  than 20                                                                   
          years  and  adjustments   shall  be  based  on  the                                                                   
          current rates for properties similarly situated."                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, following line 5:                                                                                                  
     Insert a new bill section to read:                                                                                         
     "*Sec. 9. AS 27.30.080 and AS 38.05.212(b)(2) are                                                                          
     repealed."                                                                                                                 
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 10:                                                                                                           
     Delete "and"                                                                                                               
                                                                                                                                
     Page 4, line 11, following "Act,":                                                                                         
     Insert "AS 38.05.150(d), as amended by sec. 5 of this                                                                      
     Act, and the repeal of AS 27.30.080 and AS                                                                                 
     28.05.212(b)(2) by sec. 9 of this Act,"                                                                                    
                                                                                                                                
     Page 4, line 13:                                                                                                           
     Delete "sec. 5"                                                                                                            
     Insert "sec. 6"                                                                                                            
                                                                                                                                
     Page 4, line 14:                                                                                                           
     Delete "sec. 5"                                                                                                            
     Insert "sec. 6"                                                                                                            
                                                                                                                                
     Page 4, line 15:                                                                                                           
     Delete "sec. 6"                                                                                                            
     Insert "sec. 7"                                                                                                            
                                                                                                                                
     Page 4, line 17:                                                                                                           
     Delete "sec. 6"                                                                                                            
     Insert "sec. 7"                                                                                                            
                                                                                                                                
     Page 4, line 30:                                                                                                           
     Delete "Section 10"                                                                                                        
     Insert "Section 12"                                                                                                        
                                                                                                                                
     Page 4, line 31:                                                                                                           
     Delete "sec. 11"                                                                                                           
     Insert "sec. 13"                                                                                                           
                                                                                                                                
Representative Gara OBJECTED.                                                                                                   
                                                                                                                                
Co-Chair  Thompson  explained  that  the  amendment  included                                                                   
necessary  conforming changes  identified  by the  Department                                                                   
of  Labor and  Workforce  Development.  He detailed  that  AS                                                                   
27.30.080  should  have  been repealed  because  the  statute                                                                   
provided that  the amount  due to the  Permanent Fund  was to                                                                   
be calculated  prior to  the application  of the credit.  The                                                                   
changes in  the committee substitute  (CS) provided  that the                                                                   
credit  was no  longer applicable  against royalty  payments.                                                                   
He  continued  the  statute was  now  inapplicable  that  the                                                                   
credit  could  only be  applied  to  tax since  only  royalty                                                                   
payments went  to the Permanent  Fund. He continued  that the                                                                   
royalty payment  subject to the exploration  incentive credit                                                                   
authorized  under  AS 27.30  needed  to  be deleted  from  AS                                                                   
38.05.150(d)(1).  Lastly,  AS  38.05.212(b)(2) needed  to  be                                                                   
repealed. He  asked members if  they wanted to hear  from the                                                                   
administration.                                                                                                                 
                                                                                                                                
Representative    Gara   requested    to   hear   from    the                                                                   
administration.                                                                                                                 
                                                                                                                                
Mr. Alper affirmed  that Co-Chair Thompson's  explanation was                                                                   
accurate.  He discussed  that the  exploration credits  could                                                                   
be  used  to  offset  the tax,  but  under  current  law  the                                                                   
credits  could   also  be  used   to  offset   royalties.  He                                                                   
specified most  mines did  not pay royalties  to the  state -                                                                   
mines  only  paid  royalties   to  the  state  if  they  were                                                                   
operating on state  land (just like with oil  and gas). Under                                                                   
the  specific  circumstance  a  mine could  use  any  of  the                                                                   
exploration  credits  to  offset  their  royalties  as  well.                                                                   
During  the regular  legislative  session there  had been  an                                                                   
amendment  in the  House Resources  Committee  that made  the                                                                   
change.  He explained  the change  had been  in a  standalone                                                                   
bill  - the  idea the  tax  credit could  no  longer be  used                                                                   
against   royalties.  He   explained   DOR's  attorneys   had                                                                   
realized  there  were a  couple  of  loose ends,  which  were                                                                   
addressed  in   the  amendment.  The  amendment   cleaned  up                                                                   
statutory references  to the credits and how  they interacted                                                                   
with  royalties, which  maintained the  underlying idea  that                                                                   
it  should  not  be  possible  to  use  the  credits  against                                                                   
royalty.                                                                                                                        
                                                                                                                                
Representative   Wilson  pointed   to  AS  27.30.080,   which                                                                   
addressed  that amounts due  to the  Permanent Fund  under AS                                                                   
37.13.010 were to  be calculated before the  application of a                                                                   
credit extended.  She wondered what  the amendment had  to do                                                                   
with the Permanent Fund.                                                                                                        
                                                                                                                                
Mr.  Alper  answered  that the  Permanent  Fund  received  25                                                                   
percent  of the  royalties for  all minerals.  He provided  a                                                                   
scenario where the  state received a royalty from  a mine. He                                                                   
explained  that if the  mine used  a credit  it needed  to be                                                                   
subtracted prior  to the calculation of the  share that would                                                                   
go to  the Permanent  Fund. He clarified  the section  was no                                                                   
longer necessary because the credit was being eliminated.                                                                       
                                                                                                                                
Representative  Wilson asked how  the amendment would  impact                                                                   
the Permanent Fund.                                                                                                             
                                                                                                                                
Mr. Alper  replied with  an example.  He hypothesized  if the                                                                   
state was  receiving $1,000  in royalties  from a small  mine                                                                   
on state  land, $250 would go  to the Permanent Fund.  If the                                                                   
company used  an exploration credit  that was used  to offset                                                                   
its taxes  and half  its royalty  (bringing the royalty  down                                                                   
to $500),  under current statute  the company could  pay one-                                                                   
quarter of the  $500, which would mean only $125  would go to                                                                   
the Permanent  Fund [Note:  Mr. Alper subsequently  clarified                                                                   
his explanation  was incorrect].  The amendment would  mean a                                                                   
company  would  no longer  have  the  ability to  subtract  a                                                                   
credit from the  royalty and would therefore have  to pay the                                                                   
percentage  of  the full  $1,000;  therefore,  the  Permanent                                                                   
Fund would receive  the full $250. He added  if anything, the                                                                   
change  would slightly  increase  the  money going  into  the                                                                   
Permanent  Fund principal,  but in  many circumstances  there                                                                   
would be no impact.                                                                                                             
                                                                                                                                
Co-Chair  Neuman asked  for verification  the Permanent  Fund                                                                   
would receive payments  before credits were taken  off of any                                                                   
taxes due.                                                                                                                      
                                                                                                                                
Mr.  Alper   asked  Representative   Wilson  to   reread  the                                                                   
statutory reference she had provided.                                                                                           
                                                                                                                                
Representative Wilson read from statute:                                                                                        
                                                                                                                                
     AS 27.30.080. Relationship to Other Funds.                                                                                 
                                                                                                                                
     Amounts due the permanent fund under AS 37.13.010                                                                          
     shall be calculated before the application of a credit                                                                     
     extended under this chapter.                                                                                               
                                                                                                                                
Mr.  Alper replied  to the  question by  Co-Chair Neuman.  He                                                                   
explained  the Permanent  Fund received  its money first.  He                                                                   
detailed  that   under  current   law,  the  Permanent   Fund                                                                   
received the  25 percent  of the  total regardless.  He noted                                                                   
his  prior  example  was  incorrect.  The  amendment  made  a                                                                   
conforming   change   because   there   was   no   longer   a                                                                   
circumstance  in which there  would be  a credit to  subtract                                                                   
from the royalty.                                                                                                               
                                                                                                                                
5:11:52 PM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman recapped  that the  Permanent Fund  received                                                                   
its  share of  the royalty  first under  current statute.  He                                                                   
asked for  verification that any  credits were  applied after                                                                   
the Permanent Fund received its share.                                                                                          
                                                                                                                                
Mr. Alper answered in the affirmative.                                                                                          
                                                                                                                                
Representative  Gara WITHDREW his  OBJECTION. There  being NO                                                                   
further OBJECTION, Amendment 7 was ADOPTED.                                                                                     
                                                                                                                                
Representative  Pruitt  MOVED   to  RESCIND  the  committee's                                                                   
action on Amendment  3. He requested a revote.  He relayed he                                                                   
had been absent  for the discussion on the  amendment and had                                                                   
been  confused  about  which   amendment  the  committee  was                                                                   
addressing when he voted earlier.                                                                                               
                                                                                                                                
Co-Chair  Neuman  asked  members  to be  present  during  the                                                                   
meeting.  He stated  that if a  person missed  the vote  they                                                                   
missed the vote.                                                                                                                
                                                                                                                                
Co-Chair  Thompson addressed  Amendment 3  that would  remove                                                                   
the governor's proposal  to reduce the existing  3.5-year tax                                                                   
holiday to 2 years.                                                                                                             
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Munoz, Pruitt, Saddler, Wilson, Gattis, Thompson                                                                      
OPPOSED: Edgmon, Gara, Guttenberg, Kawasaki, Neuman                                                                             
                                                                                                                                
The MOTION  to adopt  Amendment 3  PASSED (6/5). There  being                                                                   
NO further OBJECTION, Amendment 3 was ADOPTED.                                                                                  
                                                                                                                                
Representative  Wilson understood  that Amendment  1 had  not                                                                   
been  heard because  it had  been  deemed out  of place.  She                                                                   
understood  there   was  currently   a  lawsuit   related  to                                                                   
severance  tax,  but  she  hoped  that  the  issue  could  be                                                                   
considered  at another  time.  She believed  it  was a  major                                                                   
issue that could impact mines throughout the state.                                                                             
                                                                                                                                
Co-Chair Thompson  hoped the  issue would  be settled  in the                                                                   
coming  year so  the committee  could address  it during  the                                                                   
next session.                                                                                                                   
                                                                                                                                
Representative  Gara remarked that  one committee  member had                                                                   
been missing  and  upon his return  the vote  had changed  by                                                                   
two votes. He  was [somewhat facetiously] tempted  to ask for                                                                   
a revote on his amendments.                                                                                                     
                                                                                                                                
HB  4005  was  HEARD  and  HELD   in  committee  for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB 4006 UFA letter.pdf HFIN 6/1/2016 3:00:00 PM
HB4006
HB 4006 New Amendment 4 Gara.pdf HFIN 6/1/2016 3:00:00 PM
HB4006
HB 4006 New Amendment 3 Wilson.pdf HFIN 6/1/2016 3:00:00 PM
HB4006