Legislature(2007 - 2008)BUTROVICH 205
10/27/2007 09:00 AM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB2001 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB2001 | TELECONFERENCED | |
SB 2001-OIL & GAS TAX AMENDMENTS
9:07:53 AM
CHAIR HUGGINS announced the consideration of SB 2001. He
recapped what had occurred in the past eight days and the
rationale for the forthcoming committee substitute. He said that
Pedro van Meurs and Daniel Johnston talked about the evolution
of PPT and the committee has been doing the peoples' business to
the best of its ability since that time. He described the bill
as complicated, which is why it was contracted to a law firm. He
explained that the concept was to narrow the scope of issues
that this committee would address and defer the remainder to the
subsequent committees of referral. Those committees are
judiciary and finance. For the most part members will see the
bill again before it goes to the floor, he said.
CHAIR HUGGINS said he assumes that progressivity will be dealt
with on the upper end with some mechanism. The topping plant
follows the line of the governor's bill, but it needs more
review. The final issue is credits. Keep in mind that the House
is doing the same thing so there must be time at the end for
resolution of differences between the bodies, he stated.
9:14:54 AM
CHAIR HUGGINS asked for a motion to adopt the committee
substitute (CS) for SB 2001.
SENATOR STEDMAN moved CSSB 2001, labeled 25-GS0014\E.
SENATOR WAGONER objected for discussion purposes and to say that
he doesn't support the construction of the bill. It has nothing
on progressivity so it's rolled back to what it was on the PPT
and it has nothing on the tax rate so it's rolled back to the
PPT rate of 22.5 percent. He said he doesn't want to rush to
judgment, but it seems that the committee is doing that. A lot
of the things that are deferred to subsequent committees are
resource issues that this committee should finalize before the
bill passes to the next committee, he emphasized. We're being a
little too quick and passing an incomplete bill if it doesn't
have a change in the tax rate and progressivity, he said. Those
aren't just finance issues. Progressivity and the tax rate tie
into the credits and those credits are totally a resource issue.
We aren't doing our job if we don't at least vote on a tax rate,
he stated.
At ease 9:17:09 AM.
CHAIR HUGGINS asked Mr. Porter to walk through the bill and
comment as appropriate.
At ease from 9:17:43 AM to 9:20:42 AM
STEVE PORTER, Legislative Consultant for LB&A , deferred to Mr.
Bullock as the expert on the subject.
9:21:14 AM
DONALD BULLOCK, Attorney, Legislative Legal and Research,
described how the production of oil and gas is taxed. The tax
rate is 22.5 percent plus progressivity. Under PPT that rate is
applied to the production tax value, which is the gross value at
the point of production. After figuring out the nominal tax, you
look at the credits, which will reduce the amount of tax that is
paid by the taxpayers. The next issue is whether it's accurately
reported, and consistent with what is required by law. That gets
into the audit function and the fact that auditors need certain
tools to ascertain accurate and complete information. Having the
right tools potentially reduces future appeals. Version M
doesn't deal with the tax, he said. It makes changes to the
expenditure part, which gets down to the value of the subject of
the tax. Then it makes one change to the credits.
9:23:10 AM
MR. BULLOCK said the first change in the bill deals with the
expenditure adjustments in AS 43.55.165(e) starting on page 17.
The section is retroactive to the start of the PPT. It clarifies
that the state will not allow lease expenditures that basically
break the law. It removes an expenditure related to
dismantlement, removal, surrender, and abandonment of property
and equipment and it brings in a concept from SB 80. If there is
some sort of spill or release or if there is a slowing of oil
flow, there are certain conditions under which the expenditures
related to fixing the problem would not be allowed as a
deduction. Also, it eliminates certain expenditures relating to
the cost of constructing a topping plant, which is similar to a
mini refinery. It takes crude oil and boils it off to get diesel
fuel.
9:24:35 AM
SENATOR McGUIRE asked if other jurisdictions have done it this
way and if he considered defining which deductions could be
taken as opposed to defining what would be excluded in lease
expenditures.
MR. BULLOCK replied the state doesn't have much history of
looking at these expenditures and generally it isn't an issue to
royalty owners because they receive their share of the royalty
free of the cost of production. This is a new area and his
personal opinion is that the more information the auditors have
to help examine the costs, the better position they will be in
to say which costs are reasonable. The standard for the
expenditures is that they have to be related to the production
of the oil and gas and they have to be reasonable with whatever
ordinary expenses are.
MR. BULLOCK relayed that AS 43.55.165(d) tells how the
Department of Revenue can adopt regulations that will identify
the expenses that will be allowed. Subsection 165(e) says no
matter what, there will not be any deduction for the particular
expenses that are listed. There were 18 items on the list
initially, the CS adds two and makes adjustments to two of the
existing items.
9:28:12 AM
SENATOR McGUIRE asked if he has confidence that the language is
tight enough to avoid litigation over every judgment call by the
DOR.
MR. BULLOCK said litigation can be expected because there's a
lot of money involved. With regard to the policy decision
relating to deductions and credits, he said you need to evaluate
what you're getting back in return for the dollars you're giving
up. The question that comes up on the repair and maintenance
issue is what level of care is expected from the companies that
are coming in and developing the state's oil. When you begin
sharing in the costs there's the issue of whether the decisions
might become a little riskier because you're only bearing part
of the risk.
9:30:14 AM
SENATOR WAGONER referred to paragraph 19 under 165(e) and said
he'd like to make sure it does at least as much as SB 80.
MR. BULLOCK said one thing that's better is that it looks at an
identifiable event that would trigger an audit. If the event is
a result of the conditions that are in paragraph 19, then it's
going to be a disallowed cost. The problem in determining
whether an event occurred because somebody didn't do what they
were supposed to do, is you have to decide what the person was
supposed to do in the first place. Although it's easy to say the
person was negligent, that's a legal conclusion, he said.
9:32:18 AM
SENATOR WIELECHOWSKI stated that he'd like to see SB 80
incorporated so both are in the bill. If somebody has
negligently maintained their pipelines for 20 years, they
shouldn't receive a deduction even if it doesn't cause a
shutdown. He said he wouldn't push the point here, but he looks
forward to the next committee of referral.
SENATOR McGUIRE recalled Mr. Bullock stating that the concept of
gross negligence in other areas is not supplanted by this.
MR. BULLOCK said gross negligence is earlier in 165(e). It's
very serious. Simple negligence is when something doesn't happen
that you expected and somebody was harmed. This bill says if the
producer operator exercises due care in operating the facility,
but that raises the question of what is due care. Initially that
will probably be defined by the taxpayer when they file their
return and claim an expense and state that they exercised due
care. The auditor may come to a different conclusion if for
example, the taxpayer pigs a pipeline less frequently than the
industry standard. That would be a variance from the standard
and it would be evidence of failing to exercise the expected
care.
9:35:23 AM
MR. BULLOCK said this section does not look at every maintenance
issue the state might face that results in damage. The bill says
there must be a reduction in the flow of oil or a spill.
CHAIR HUGGINS said it appeals to him that this is event driven.
It creates more clarity, he added.
MR. BULLOCK directed attention to another change in the
expenditures. The Department of Revenue is given broader
authority to adopt regulations to provide guidelines regarding
the types of expenses that are allowed. The bill removes two
subsections that allowed the use of the unit agreement and how
the operator bills the working interest owners. Although it's
deleted, the Department of Revenue can still look at that type
of information, he said.
9:36:48 AM
MR. BULLOCK turned to changes in the credits in AS 43.55.023(i),
bill section 13, page 10. PPT allowed a producer or explorer to
get a credit for certain expenditures made in the five years
prior to April 1, 2006. This CS reconsiders that and adopts a
different standard for carrying credits forward. The people that
produce oil in 2006 and 2007 that are subject to the PPT can
still have the credit as it was when the PPT was enacted. After
the end of 2007, the only people that would benefit from the TIE
(transitional investment expenditures) are producers that
produce for the first time after end of 2007. Also, he said,
there are other limitations on the amount that can be carried
forward.
SENATOR WAGONER expressed the view that it's not fair to treat
current and future producers differently. If the TIE is going to
be eliminated it should be totally eliminated, and if it's going
to be allowed it should be totally allowed.
9:39:48 AM
CHAIR HUGGINS asked Commissioner Galvin to comment.
PATRICK GALVIN, Commissioner, Department of Revenue (DOR), said
the language included in Version M reflects the initial intent
and it does provide fairness. TIE credits are non-transferable
and they expire at the end on this calendar year. But the TIE
credits that were earned between the time that the PPT was
passed until now can be used on production in the future.
Without this clarifying provision, companies like Pioneer
wouldn't have gotten any advantage from the credits they earned
by making the expenditures and getting the two for one.
SENATOR WAGONER expressed the view that it was bad policy
originally and it is still bad policy. These people get to write
off these capital costs against their federal tax liability, he
said.
COMMISSIONER GALVIN stated agreement, which is why the
termination of the TIE credits is included. This is an aspect
that provides true fairness for people that were making
expenditures over the course of the last 18 months with the
expectation that they were earning credits, he said.
9:42:37 AM
MR. BULLOCK said he doesn't know the policy of TIE credits, but
this just fine tunes it.
CHAIR HUGGINS said in his assessment this is a middle ground.
MR. BULLOCK summarized the steps of going through the
expenditures, figuring the value that will be taxed, taking out
the credits, filing the return, and paying the tax. Now it's in
the jurisdiction of the Department of Revenue and they can begin
examining it. The remainder to the bill deals with the audit
process and giving the Department of Revenue and the Department
of Natural Resources the needed information to examine the
return. Bill provisions provide for more information sharing
between the Department of Revenue and the Department of
Resources and it gives the audit section in both departments the
option of hiring exempt auditors. Also there's a transitional
section giving employees who qualify, the option of remaining in
classified service.
At ease from 9:45:10 AM to 9:49:03 AM.
SENATOR GREEN mentioned retroactivity and requiring accounting
of lease expenditures under SB 80 and this CS and asked if
that's an issue.
MR. BULLOCK said it will always be an issue when there's
retroactivity. In the same year that the legislature enacted
change in the Elf, there were cases on the separate accounting
for oil and gas income tax payers It was retroactive to January
1 of the same year so it affected income and the production tax
value for a prior period. The Alaska Supreme Court confirmed it
both times. At the federal level they were able to go back
retroactively for two years in some cases. The standard seems to
be that the session of the legislature or Congress that follows
the first filing of a tax return is probably going to be all
right because that's the first time you actually see how the tax
works. If it needs fixing, it can be fixed back at the start.
The first filings under the PPT were April 1, 2007 so the next
regular legislative session will be the upcoming one next
January. It could be argued that this 30-day special session
would qualify but given the limitations of a special session the
state could probably argue that that is not what is contemplated
in the due process issue.
9:52:04 AM
SENATOR WIELECHOWSKI asked if criminal negligence is the same as
gross negligence.
MR. BULLOCK said he thinks they're close but he can't say
definitively. Existing things in AS 43.05.220 and AS 43.05.290
apply to TAPS in general and provide for civil penalties for
negligence and civil fraud. Also there are criminal penalties
for negligence and fraud.
9:53:12 AM
CHAIR HUGGINS asked Senator Wagoner if he maintained his
objection.
SENATOR WAGONER removed his objection.
At ease 9:53:41 AM to 9:53:56 AM.
CHAIR HUGGINS announced that CSSB 2001, Version E, is adopted
and before the committee.
SENATOR WIELECHOWSKI stated that he understands the process and
realizes that there will be changes as the bill moves along. He
feels more secure knowing that he will have another opportunity
to look at the bill in judiciary. Personally he would like to
see the bill move forward with the financial information
included so that ACES remains intact. He'd like to see the rate
kept where it is and he'd like to see progressivity.
CHAIR HUGGINS said there are different schools of thought, but
progressivity is a very powerful tool and we have deferred
conversation on that.
9:55:53 AM
SENATOR WAGONER moved Amendment 1.
25-GS0014\E.1
Bullock
7/11/09
A M E N D M E N T 1
OFFERED IN THE SENATE BY SENATOR WAGONER
To: CSSB 2001 ( ), Draft Version "E"
Page 10, following line 13:
Insert new bill sections to read:
"* Sec. 13. AS 43.55.011(e) is amended to read:
(e) There is levied on the producer of oil or
gas a tax for all oil and gas produced each month from
each lease or property in the state, less any oil and
gas the ownership or right to which is exempt from
taxation or constitutes a landowner's royalty
interest. Except as otherwise provided under (j) and
(k) of this section, the tax is equal to the greater
of 25 [22.5] percent of the production tax value of
the taxable oil and gas as calculated under
AS 43.55.160, or the minimum tax determined under (f)
of this section.
* Sec. 14. AS 43.55.020(a) is amended to read:
(a) For a calendar year, a producer subject to
tax under AS 43.55.011(e), (f), (g), or (i), and
notwithstanding that a producer may be liable for the
tax under AS 43.55.011(f) rather than the tax under
AS 43.55.011(e), shall pay the tax as follows:
(1) an installment payment of the estimated
tax levied by AS 43.55.011(e) or (f), net of any tax
credits applied as allowed by law, is due for each
month of the calendar year on the last day of the
following month; the amount of the installment payment
is the sum of the amounts calculated under (2) and (3)
of this subsection, but not less than zero;
(2) the first of the two amounts used to
calculate the installment payment for a month under
(1) of this subsection is equal to the remainder
obtained by subtracting
(A) 1/12 of the tax credits that are
allowed by law to be applied against the tax levied by
AS 43.55.011(e) for the calendar year; from
(B) the total of the monthly production
values calculated in the manner provided in
AS 43.55.160(a)(2) of all oil and gas taxable under
AS 43.55.011(e) and produced by the producer from
leases or properties in the state during the month,
multiplied by 25 [22.5] percent;
(3) the second of the two amounts used to
calculate the installment payment for a month under
(1) of this subsection is the amount calculated for
the month under AS 43.55.011(g);
(4) an installment payment of the estimated
tax levied by AS 43.55.011(i) for each lease or
property is due for each month of the calendar year on
the last day of the following month; the amount of the
installment payment is the sum of
(A) the applicable percentage rate for oil
provided under AS 43.55.011(i), multiplied by the
gross value at the point of production of the oil
taxable under AS 43.55.011(i) and produced from the
lease or property during the month; plus
(B) the applicable percentage rate for gas
provided under AS 43.55.011(i), multiplied times the
gross value at the point of production of the gas
taxable under AS 43.55.011(i) and produced from the
lease or property during the month;
(5) any amount of tax levied by
AS 43.55.011(e) - (g) and (i), net of any credits
applied as allowed by law, that exceeds the total of
the amounts due as installment payments of estimated
tax is due on March 31 of the year following the
calendar year of production."
Renumber the following bill sections accordingly.
Page 23, line 3:
Delete "Sections 21, 22, and 25"
Insert "Sections 23, 24, and 27"
Page 23, line 5:
Delete "Sections 19, 20, and 26"
Insert "Sections 13, 14, 21, 22, and 28"
Page 23, line 7:
Delete "Sections 14 and 16"
Insert "Sections 16 and 18"
Page 23, line 8:
Delete "sec. 14"
Insert "sec. 16"
Page 23, line 9:
Delete "sec. 16"
Insert "sec. 18"
Page 24, line 6:
Delete "secs. 21, 22, and 25"
Insert "secs. 23, 24, and 27"
Page 24, line 8:
Delete "secs. 13, 14, 16, 19, 20, and 26"
Insert "secs. 13 - 16, 18, 21, 22, and 28"
Page 24, lines 25 - 26:
Delete "Sections 21, 22, 25, and 29"
Insert "Sections 23, 24, 27, and 31"
Page 24, line 27:
Delete "Sections 13, 14, 16, 19, 20, and 26"
Insert "Sections 13 - 16, 18, 21, 22, and 28"
Page 24, line 28:
Delete "sec. 32"
Insert "sec. 34"
9:56:03 AM
SENATOR GREEN objected.
SENATOR WAGONER explained that the amendment takes the tax rate
from 22.5 percent to 25 percent, which is in ACES. He continued:
I think the bill is incomplete if it doesn't have
something in it that addresses the tax rate and also
the progressivity. The other objection I have to the
bill, and I'm going to object when we move the bill,
I've never had a bill of this magnitude leave
committee or any committee I was on without going
through it a second time after we do the CS. Take
amendments on the CS and allow the people it affects
to come back and testify on the amended bill. It's
just not natural and I just say again, I think we're
rushing to judgment and we should take more time on
this. I think this is bad policy doing it this way. I
know we've got a time limit and everything else.
CHAIR HUGGINS said we both agree that it's a rush to judgment
and that's been his concern all along. Speaking for himself and
as the Chair he continued to say:
We have a task and we have task-organized a timeline
that will get us to a solution of this task
potentially. And we've divided the work-task up
amongst committees in a teamwork approach in trying to
in a specialization of expertise on committees so this
product is reflected in it period. We don't have six
weeks to do it. There will be other people putting
their fingerprints on it and you, in fact, will have a
chance to do this same process again on the floor,
which is the beauty of the system. There are a lot of
checks and balances. Oh and by the way, the House is
doing whatever they're doing. And they will have a say
and we will have to come to some resolution. So in any
event, there is a time constraint and we're operating
understanding that. So we can't wish away the
constraints.
SENATOR WAGONER called a point of order saying an amendment is
before the committee.
9:58:48 AM
SENATOR STEDMAN reported that an analysis of the tax changes is
being run as we speak. Those issues will be dealt with in
finance because this committee is not prepared to deal with it.
"We haven't had the information presented in front of us and we
haven't had the time," he said. The intention is to have a bill
on the Senate floor early enough to work out the differences
with the House, get it to the governor, and move on and get it
behind us. The process is a little different, but we learned
some things working on PPT. Hopefully things will run more
smoothly and the public will see that the treasury is properly
looked after, he stated.
10:00:09 AM
SENATOR WIELECHOWSKI asked if the administration would give an
opinion on the amendments as they come forward.
COMMISSIONER GALVIN said he didn't have a particular comment on
the amendment having just received it. With regard to the
process, he said the administration appreciates the recognition
that the economic fiscal issues need to be addressed before the
bill is considered complete. Also, committee members seem to
agree on the need for an assessment of the state's fair share
before the bill goes to the floor and that's good. The
administration clearly recognizes that the current bill does not
provide the state with an equitable share. We appreciate the
recognition that the administration needs to get the necessary
tools to implement a net-based tax and we appreciate the
recognition that we are going to end up with a bill that does
attempt to reconcile the issues of the tools and the fair share.
"This isn't the bill that we would like to see end up and I want
to make sure that that is absolutely clear on the record. But we
do recognize the need to move this through the process," he
stated.
SENATOR STEDMAN said with regard to moving the base tax, he has
spoken with the administration's consultant, Dr. Tony Finizza,
about having some of the economic runs and the analysis done and
ready for the Finance Committee to consider.
10:02:36 AM
A roll call vote was taken. Amendment 1 failed 2:5 with Senator
Wielechowski and Senator Wagoner voting yea and Senator Green,
Senator Stedman, Senator Stevens, Senator McGuire, and Chair
Huggins voting nay.
SENATOR WAGONER moved Amendment 2.
A M E N D M E N T 2
OFFERED IN THE SENATE BY SENATOR WAGONER
To: CSSB 2001 ( ), Draft Version "E"
Page 10, following line 13:
Insert new bill sections to read:
"* Sec. 13. AS 43.55.011(e) is amended to read:
(e) There is levied on the producer of oil or
gas a tax for all oil and gas produced each month from
each lease or property in the state, less any oil and
gas the ownership or right to which is exempt from
taxation or constitutes a landowner's royalty
interest. Except as otherwise provided under (j) and
(k) of this section, the tax is equal to the greater
of 22.8 [22.5] percent of the production tax value of
the taxable oil and gas as calculated under
AS 43.55.160, or the minimum tax determined under (f)
of this section.
* Sec. 14. AS 43.55.020(a) is amended to read:
(a) For a calendar year, a producer subject to
tax under AS 43.55.011(e), (f), (g), or (i), and
notwithstanding that a producer may be liable for the
tax under AS 43.55.011(f) rather than the tax under
AS 43.55.011(e), shall pay the tax as follows:
(1) an installment payment of the estimated
tax levied by AS 43.55.011(e) or (f), net of any tax
credits applied as allowed by law, is due for each
month of the calendar year on the last day of the
following month; the amount of the installment payment
is the sum of the amounts calculated under (2) and (3)
of this subsection, but not less than zero;
(2) the first of the two amounts used to
calculate the installment payment for a month under
(1) of this subsection is equal to the remainder
obtained by subtracting
(A) 1/12 of the tax credits that are
allowed by law to be applied against the tax levied by
AS 43.55.011(e) for the calendar year; from
(B) the total of the monthly production
values calculated in the manner provided in
AS 43.55.160(a)(2) of all oil and gas taxable under
AS 43.55.011(e) and produced by the producer from
leases or properties in the state during the month,
multiplied by 22.8 [22.5] percent;
(3) the second of the two amounts used to
calculate the installment payment for a month under
(1) of this subsection is the amount calculated for
the month under AS 43.55.011(g);
(4) an installment payment of the estimated
tax levied by AS 43.55.011(i) for each lease or
property is due for each month of the calendar year on
the last day of the following month; the amount of the
installment payment is the sum of
(A) the applicable percentage rate for oil
provided under AS 43.55.011(i), multiplied by the
gross value at the point of production of the oil
taxable under AS 43.55.011(i) and produced from the
lease or property during the month; plus
(B) the applicable percentage rate for gas
provided under AS 43.55.011(i), multiplied times the
gross value at the point of production of the gas
taxable under AS 43.55.011(i) and produced from the
lease or property during the month;
(5) any amount of tax levied by
AS 43.55.011(e) - (g) and (i), net of any credits
applied as allowed by law, that exceeds the total of
the amounts due as installment payments of estimated
tax is due on March 31 of the year following the
calendar year of production."
Renumber the following bill sections accordingly.
Page 23, line 3:
Delete "Sections 21, 22, and 25"
Insert "Sections 23, 24, and 27"
Page 23, line 5:
Delete "Sections 19, 20, and 26"
Insert "Sections 13, 14, 21, 22, and 28"
Page 23, line 7:
Delete "Sections 14 and 16"
Insert "Sections 16 and 18"
Page 23, line 8:
Delete "sec. 14"
Insert "sec. 16"
Page 23, line 9:
Delete "sec. 16"
Insert "sec. 18"
Page 24, line 6:
Delete "secs. 21, 22, and 25"
Insert "secs. 23, 24, and 27"
Page 24, line 8:
Delete "secs. 13, 14, 16, 19, 20, and 26"
Insert "secs. 13 - 16, 18, 21, 22, and 28"
Page 24, lines 25 - 26:
Delete "Sections 21, 22, 25, and 29"
Insert "Sections 23, 24, 27, and 31"
Page 24, line 27:
Delete "Sections 13, 14, 16, 19, 20, and 26"
Insert "Sections 13 - 16, 18, 21, 22, and 28"
Page 24, line 28:
Delete "sec. 32"
Insert "sec. 34"
SENATOR STEVENS objected.
SENATOR WAGONER described Amendment 2 as the same as Amendment 1
except that the tax rate is changed from 22.5 percent to 22.8
percent. The explanation is the same.
A roll call was taken. Amendment 2 failed 1:6 with Senator
Wagoner voting yea and Senator Stedman, Senator Stevens, Senator
McGuire, Senator Wielechowski, Senator Green, and Chair Huggins
voting nay.
10:04:59 AM
SENATOR WAGONER commented that the last vote was interesting
because that amendment replicated a tax rate that members of
this committee, with the exception of Senator Wielechowski,
voted on and passed last year on the floor.
CHAIR HUGGINS noted that it failed to pass the legislature.
SENATOR WAGONER said that's not the point.
SENATOR WAGONER moved Amendment 3.
25-GS0014\E.2
Bullock
7/11/09
A M E N D M E N T 3
OFFERED IN THE SENATE BY SENATOR WAGONER
To: CSSB 2001( )Draft Version "E"
Page 10, following line 13:
Insert a new bill section to read:
"* Sec. 13. AS 43.55.011(h) is amended to read:
(h) For purposes of (g) of this section, the
price index for a month is calculated by subtracting
30 [40] from the number that is equal to the quotient
of the total monthly production tax value of the
taxable oil and gas produced by the producer during
that month, as calculated under AS 43.55.160, divided
by the total amount of the taxable oil and gas
produced by the producer during that month, in BTU
equivalent barrels. However, a price index may not be
less than zero."
Renumber the following bill sections accordingly.
Page 23, line 3:
Delete "Sections 21, 22, and 25"
Insert "Sections 22, 23, and 26"
Page 23, line 5:
Delete "Sections 19, 20, and 26"
Insert "Sections 13, 20, 21, and 27"
Page 23, line 7:
Delete "Sections 14 and 16"
Insert "Sections 15 and 17"
Page 23, line 8:
Delete "sec. 14"
Insert "sec. 15"
Page 23, line 9:
Delete "sec. 16"
Insert "sec. 17"
Page 24, line 6:
Delete "secs. 21, 22, and 25"
Insert "secs. 22, 23, and 26"
Page 24, line 8:
Delete "secs. 13, 14, 16, 19, 20, and 26"
Insert "secs. 13 - 15, 17, 20, 21, and 27"
Page 24, lines 25 - 26:
Delete "Sections 21, 22, 25, and 29"
Insert "Sections 22, 23, 26, and 30"
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SENATOR STEVENS objected.
10:06:07 AM
SENATOR WAGONER explained that Amendment 3 puts the trigger
point for progressivity at 30 and leaves everything else the
same as what is in the PPT.
CHAIR HUGGINS said you may be right, but the people who are
asked to vote on items like this need to understand the
ramifications to the state, the producers, and all the affected
people. We didn't have that conversation in the depth that's
needed in this committee. For that reason he would be a no vote.
SENATOR WAGONER relayed that this will be the last time he has
input on the bill before it goes to the floor. He's offering the
amendments now because the bill is like a lady who is going to
the prom without a dress. The dress is the tax rate and the
progressivity. "I think this resources committee should make a
different recommendation than what's in there, otherwise it's a
waste of 30 days as far as I'm concerned," he said.
10:08:07 AM
SENATOR STEVENS expressed the view that the process is
frustrating. The legislature is limited by the governor and the
30-day session and in January it will be limited by the 90-day
session. We're all under the gun, he said. His objection to the
motions isn't because he feels the issues shouldn't be discussed
and addressed. He believes they will be addressed as the bill
moves through the process. To that end he said he suspects that
he'll vote to amend the bill as it leaves this committee.
SENATOR McGUIRE said she appreciates the process, but she'll be
a yes vote on Amendment 3 because moving to that $40 figure been
the most troubling part of governor's bill. That's with no
disrespect to the Chair and the process that he's set, she said.
SENATOR STEDMAN said it's more complex than just moving the
trigger by $10. He expects the issue to consume substantial time
and he does not support the amendment.
SENATOR WIELECHOWSKI stated that he'd like to see the bill move
forward as ACES at the very least. He believes the rate and
particularly the progressivity should be increased, but he
understands this is a process. Progressivity is a key factor and
he'll be supporting the amendment.
10:11:47 AM
A roll call vote was taken. Amendment 3 failed 3:4 with Senator
McGuire, Senator Wielechowski, and Senator Wagoner voting yea
and Senator Stevens, Senator Green, Senator Stedman, and Chair
Huggins voting nay.
CHAIR HUGGINS said we've gone through the amendment process and
the bill is before the committee. He asked for any final
comments and found there were none.
SENATOR STEDMAN moved to pass CSSB 2001, Version \E from
committee with individual recommendations and fiscal notes to
follow.
SENATOR WAGONER objected.
A roll call vote was taken. The motion passed 5:1 with Senator
McGuire, Senator Wielechowski, Senator Green, Senator Stevens,
Senator Stedman, and Chair Huggins voting yea and Senator
Wagoner voting nay.
CHAIR HUGGINS announced that CSSB 2001, labeled 25-GS0014\E,
passes from committee. He invited those who have concerns to
stay tuned because there's a lot more to do on the bill.
10:14:41 AM
SENATOR WIELECHOWSKI said it's important for the public to
understand the last vote to move the bill from committee. Had
the committee voted not to move the bill along, it probably
wouldn't pass this special session. It's important for Alaskans
to understand that, he said.
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