Legislature(2011 - 2012)BUTROVICH 205
02/23/2012 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB192 | |
| Department of Revenue Presentation: Access to Information and Fiscal Note | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 192 | TELECONFERENCED | |
SB 192-OIL AND GAS PRODUCTION TAX RATES
PRESENTATION: ACCESS TO INFORMATION AND FISCAL NOTE ANALYSIS
3:34:21 PM
CO-CHAIR PASKVAN said that today, [during the continued
consideration of SB 192,] the committee would learn more about
the Department of Revenue's perspective on access to information
and taxpayer confidentiality. This issue first presented itself
to him when he read the December 30, 2011 decision regarding the
trial de novo on the assessed valuation of the TransAlaska
Pipeline system (TAPS). In that decision Judge Gleason wrote
that Alaska statutes "grant the division certain investigative
powers," but that "there was no persuasive evidence presented at
the trial de novo that the division has ever exercised these
powers with respect to the valuation of TAPS." Additionally, the
Judge wrote:
The division broadly interprets what it considers
taxpayer confidential information under applicable
statutes and will not disclose such information to the
municipality specifically or public generally. The
division considers all information that it receives
from a taxpayer and taxpayer confidential even if it
does not contain the particularities of a taxpayer's
business affairs and is obtainable from the public
domain.
CO-CHAIR PASKVAN said there is more in the decision about the
issue of confidentiality and it has been discussed in detail
during a prior hearing, but today is the Department of Revenue's
day.
3:35:42 PM
SENATOR STEVENS joined the committee.
^Department of Revenue Presentation: Access to Information and
Fiscal Note
3:36:58 PM
BRYAN BUTCHER, Commissioner, Department of Revenue (DOR), said
he would start out with describing how the assessment process
works, and then dig into relevant confidentiality statutes, then
how the department gathers in formation and talk a little about
the State Assessment Review Board (SARB), subpoena power, joint
and administrative agreements, municipal codes and the benefits
of confidentiality. He said that the confidentiality laws in
Alaska are not a lot different than any state or IRS taxpayer
applications. He asked Ms. Bales to go through those details.
CO-CHAIR PASKVAN listed the department members available on line
and thanked the commissioner for his hard work in assembling the
team.
3:38:06 PM
SENATOR MCGUIRE joined the committee.
3:38:50 PM
JOHANNA BALES, Deputy Director, Tax Division, Department of
Revenue, introduced herself and said she would start off with
the assessment process since the confidentiality presentation is
driven by the SARB and property tax assessment process.
She said the preliminary assessment is done by the state
assessor who puts the property tax roll together. Taxpayers are
required to provide the division with their property tax
renderings by January 1, each year. Then the Tax Division is
required to value all the property and send a property tax
statement to each taxpayer by March 1, a pretty quick process. A
copy of the assessment at that time is also provided to each
municipality in which the property is located so that they are
given notice of the assessed value. Taxpayers have 20 days or
until March 21 to appeal the assessment. The division must then
look at that and issue an informal conferenced decision (ICD)
and look at any additional information that is provided, and
that is due on March 31, within 10 days of that appeal.
3:40:35 PM
She said taxpayers and municipalities that don't agree with the
final assessment can appeal to the SARB and that is due by April
20. SARB must conduct a hearing and finalize its proceedings no
later than May 31 and the certified assessment based on that
hearing is due on June 1; tax payments are due June 30.
3:41:16 PM
She went next to how confidentiality fits into the assessment
process. One of the two confidentiality statutes is AS 43.05.230
(where all tax statutes are located). It says basically that
it's "unlawful for a current or former employee or officer or
agent of the state to divulge the amount of income or
particulars set out or disclosed in a report or return made
under this title." This is information about the income or
particulars set out in a report or return and they receive
reports from companies that are not necessarily taxpayers.
CO-CHAIR PASKVAN asked if that is a report on income or a return
on income.
MS. BALES replied that the statutes aren't clear on whether it's
just a report or a return. Some reports are not related to tax
return calculations. For example, under the oil and gas
production the division gets monthly reports for revenue
forecasting. Those aren't tax returns but they are confidential
and they come from taxpayers and other explorers who are not
taxpayers.
She related that AS 40.25.100(a), the public records statutes,
says information that comes to the Department of Revenue that
discloses the particulars of a business or affairs of a taxpayer
or other person is not a matter of public record and that
information is confidential.
CO-CHAIR PASKVAN asked what "particulars" are.
MS. BALES replied that she interprets that very broadly to mean
that information provided by any taxpayer or other person is to
remain confidential. She noted that they receive hundreds and
thousands of documents every year and it wouldn't be practical
for them to make a determination on every document. Besides, if
it discloses information about a taxpayer or another person that
information should be held confidential.
SENATOR FRENCH asked if she thought the state's statutes need to
be changed given how inclusive it is. For example, if he asked
her if ConocoPhillips filed a tax return last year, she would
not be able answer that question.
MS. BALES said she couldn't disclose whether or not they filed a
return and that their mission is to collect taxes and keeping
information confidential assists them in their ability to do
that.
3:45:48 PM
CO-CHAIR PASKVAN asked if they receive production forecast
information.
MS. BALES answered yes.
CO-CHAIR PASKVAN asked why that information is confidential.
MS. BALES replied because it would be considered business
affairs.
COMMISSIONER BUTCHER added that reserves of companies are
historically very tightly kept as an affair of that particular
business. As they are working with companies to put together an
accurate production forecast it would have a chilling effect if
a company thought their reserve and estimates information were
going to be shared on a company-by-company basis.
CO-CHAIR PASKVAN said he received specific information from BP
about their reserves and identified six specific categories. So,
the commissioner is saying they treat that information with a
high level of confidentiality but it was unhesitatingly
disclosed yesterday.
COMMISSIONER BUTCHER replied that he didn't know if that was
just a snapshot and that a company can decide to provide any
information in any context it likes. But it wouldn't like the
department doing that.
3:49:30 PM
SENATOR STEDMAN said he thought the state should know the
resource wealth in its ownership at least in the aggregate; the
department should know that and the legislature needs to know
that to set public policy.
COMMISSIONER BUTCHER said DNR and the Alaska Oil and Gas
Conservation Commission (AOGCC) do know aggregate totals based
on their information, but it's fairly broad because the
specifics don't exist until an area is actually explored and
developed.
SENATOR MCGUIRE said the kind of data taxpayers should provide
is a valid conversation, but the broader question is if the
Department of Revenue should be the place it goes. Maybe AOGCC
or DNR would be a better choice. She suspected the IRS has
similar requirements.
CO-CHAIR PASKVAN commented that an order from the court, dated
December 29, 2011, addresses this issue. Page 2 says:
This court order that for all fields with three or
more producers or explorers the categories of
production in that field including under development
and under evaluation would be public. For fields with
less than three or more producers or explorers only
the total production would be public.
3:52:39 PM
MS. BALES responded that their internal policy is just that; if
they can aggregate information of three or more taxpayers and be
assured that no particular information about a particular
taxpayer can be ascertained, then they can do that and have done
so. They have some concern in areas with less than three
taxpayers.
3:53:13 PM
SENATOR WIELECHOWSKI joined the committee.
MS. BALES explained further that AS 43.05.230(g) allows them to
aggregate information if the particulars of a specific taxpayer
can't be ascertained. They would start with information from
three businesses as the aggregation point, but if they believe
someone else could figure out what information came from which
company they are also required to insure that doesn't happen.
3:54:33 PM
CO-CHAIR PASKVAN asked why the court's order as to the public
nature of these documents having already been decided is not in
effect at this time.
MS. BALES answered that it's possible that they had three or
more but the second provision kicked in and they felt that
information could be figured out for a particular taxpayer. For
instance, if you have three steady years of production with
three companies and another one comes in and the production
spikes, that would be indicative of specifics.
CO-CHAIR PASKVAN said they are talking about production data and
when one looks at spring 2011 and fall 2011 there is a loss of
nearly 80,000 barrels in that six-month gap. What data would the
department receive that would eliminate 79,000 barrels of oil a
day? It's troubling. And it would now seem under this court
order that the data is public.
3:56:44 PM
COMMISSIONER BUTCHER replied that he would look at that to see
if it fits under the operating guidelines. The Gleason case is
active and open the Department of Law has advised not to get
into details of a case that is currently being litigated.
CO-CHAIR PASKVAN concurred that was a prudent position, but they
are talking about underlying data and source documents that can
produce dramatic swings in the production forecast in a
relatively short period of time - and has now been ordered
public.
MS. BALES said the aggregation data amounts not the actual
underlying data.
CO-CHAIR PASKVAN said it appears the court resolved that issue.
3:58:49 PM
MR. BALES said their internal policy right now is that they can
aggregate data from three or more taxpayers and give a single
number and don't disclose who they are. They also ensure that
they don't violate any part of AS 43.05.230 about
unintentionally disclosing a particular taxpayer's information.
3:59:13 PM
CO-CHAIR PASKVAN remarked that a court order trumps your policy.
COMMISSIONER BUTCHER said they understand what he is saying and
in this case Ms. Bales is trying to point out that is their
policy. The reason why the aggregation is of three companies is
because if it were two companies, company A knowing what they
are producing would immediately know what Company B was doing.
4:00:21 PM
SENATOR FRENCH went back to his hypothetical about
ConocoPhillips filing a tax return last year and asked if the
statute lets them publish a list of delinquent taxpayers.
MS. BALES replied yes, but only if they are publishing those
lists to engage in collection activities.
SENATOR FRENCH asked if the delinquency exception is strictly to
get them to pay their taxes.
MS. BALES replied yes, but it's twofold. They must have some
focused collection activity. And just because a taxpayer hasn't
filed a return doesn't necessarily mean he is delinquent.
4:01:53 PM
SENATOR FRENCH asked if they filed a tax return and didn't pay
their taxes would they be delinquent.
MS. BALES responded yes.
SENATOR FRENCH asked if they could file a tax check without
filing a return.
MS. BALES answered yes, but they would be subject to a failure
to file penalty if their tax liability changed. A penalty is up
to 25 percent of the additional tax due. They don't get a whole
lot of taxpayers not filing.
4:02:54 PM
She noted there are some significant penalties, up to $5,000 for
each breach of confidentiality, for disclosing taxpayer
information in addition to potentially two years in prison or
both.
CO-CHAIR PASKVAN noted that Senator Thomas was in the audience.
MS. BALES pointed out that during ACES legislation several
legislators voiced concerns about the Tax Division's ability to
keep taxpayer information confidential and discussed increasing
penalties for breaches of it. Although their internal policy has
been what she stated for 19 years, they actually didn't have a
written policy until December 2007. The policy is very broad and
outlines some exceptions for sharing information.
4:04:43 PM
MS. BALES said she would next talk about their information
gathering procedures, things they do with all tax types focusing
on property tax. Basically, they compel taxpayers to provide
information in various ways. They are required to file tax
returns and in the case of property tax they are required to
send in their property renderings; they are required to sign the
tax returns either under penalty of perjury or unsworn
falsification. They also receive information for economic
research and forecasting purposes in the producers' reports;
those aren't signed.
CO-CHAIR PASKVAN asked if she was aware of information regarding
about reserves being retained as confidential by the operators
that is not disclosed.
MS. BALES replied she was not aware of that. They have something
different than what they have provided?
CO-CHAIR PASKVAN replied yes and that the use of subpoena power
could provide them to the department.
MS. BALES acknowledged that and went back to the presentation
saying taxpayers and municipalities can appeal to Superior Court
if they disagree with the SARB decision. The property tax
assessment is based on information obtained during the year that
the property was rendered. When the companies or municipalities
appeal to the Superior Court it happens a couple of years later
and often the information the court is looking at is information
that wasn't in existence at the time the assessment was done.
4:08:37 PM
CO-CHAIR PASKVAN said he thought the information existed but
wasn't obtained by the department. The parties obtained the
information that was in existence through the subpoena power.
MS. BALES replied that it was possible that all of the
information wasn't in existence specifically relating to
production plans and fields under evaluation (and reserves for
the valuation of the pipeline); they are talking about a 2007
assessment year that didn't go to court until 2011.
4:10:11 PM
SENATOR STEDMAN said Judge Gleason referenced 7 to 8 billion
barrels and the AOGCC referenced 4 billion and asked if he was
following along correctly.
CO-CHAIR PASKVAN replied they were talking about the spread
between those two numbers, and the in-house confidential
documents that were obtained through the court process that
leads to the court relying on the internal documents saying 7 to
8 billion as compared to the other documents.
COMMISSIONER BUTCHER said he thought Ms. Bales was saying when
the case went to court any information that could be gathered in
2011 was at use in the case whereas when they came up with a
TAPS evaluation or an estimate of reserves it was made in 2007,
2008 or 2009. They were really getting to the point of going
into what the Department of Law had asked them not to do, the
details of the case.
4:11:54 PM
MS. BALES reminded them of the short timeframe in the assessment
process between the time property is rendered, the assessment
goes out and the informal conference decision. All the available
information is looked at at that time.
4:12:37 PM
She said that SARB was created under Title 43, the
confidentiality statutes, However in 1983 there was an AG
opinion saying the SARB proceedings are public, because the
information SARB provides at the hearings is simply the property
and its value. The value of the property at that time was just
the cost since TAPS was relatively new. Now they are into the
situation where the value of TAPS is based on reserves and
things like that. One of the things the opinion stated is that
any other taxpayer information or other information about the
affairs of the taxpayer must be held confidential.
CO-CHAIR PASKVAN asked her to fill out a little more who sits on
the State Assessment Review Board.
MS. BALES answered that SARB is created within the DOR; it is
made up of five members with certain qualifications primarily
from the municipal property tax appraisers. So the board is made
up of municipal property tax appraisers throughout the state;
their qualifications are generally in real estate appraisal. The
municipal appraising process is public as well, but you can't
see money that was put into the property. That is one of the
difficulties in having public hearings in SARB. To do that type
of evaluation for TAPS specific taxpayer information, reserves,
plans of production and things like that are brought in.
She said the board conducts public hearings and meets once a
year on May 21. One of the issues is that it doesn't hold the
taxpayer information confidential. They believe this is a public
hearing and therefore it's all public information, but the AG
opinion says it must be held confidential even at the SARB
hearings.
CO-CHAIR PASKVAN remarked that they are in a situation where she
said SARB information is considered public, but the department's
policy is that information is confidential and asked if any of
the parties appearing before SARB have asserted their
confidentiality.
MS. BALES replied yes. Some of the oil companies have asked that
their information be protected and SARB issued a protective
order, but SARB believes they don't have the ability to do that.
She believes that is where there is a disconnect.
She explained that one of the concerns of the municipalities in
a hearing a couple of weeks ago was that they weren't receiving
all the information they needed for the SARB hearings and that
would be true, because those hearings are open to the public.
And the department didn't provide the information because
taxpayer information would be disclosed. SARB has told them they
wouldn't issue protective orders even though industry and the
department have both requested them.
4:19:16 PM
CO-CHAIR PASKVAN said paragraph 8 in the court order
specifically addresses this issue. The SARB body in its 2010
decision indicated with respect to this taxpayer confidentiality
that "the process is close to broken and headed in the wrong
direction."
MS. BALES said she was aware of that statement, but this is an
area she couldn't discuss because of ongoing litigation.
COMMISSIONER BUTCHER said he didn't know specifically what
detail was broken, but clearly the process by which SARB is
running its meetings is broken in that it is limiting the amount
of data that is assessed because of the policy of making
confidential information public. It is very difficult to have as
rounded a discussion as could occur if it would actually follow
state law in keeping confidential information confidential.
SENATOR FRENCH asked if anyone had begun a legal action against
SARB to hold them in violation of AS 43.05.230(f).
MS. BALES replied because they know that SARB will not hold the
information confidential, the department hasn't provided it. So
there has been a violation of the statute. That is where the
process is broken.
4:23:00 PM
SENATOR FRENCH asked relative to her second bullet if they
intend to not release confidential information or that they in
fact had released confidential information and if it's the later
where did it come from.
MS. BALES replied SARB has told the department they won't hold
the information confidential. She wasn't sure there wasn't a
period where they released information and said she would check.
In that case, the taxpayer would have to take issue with that
and to her knowledge no one had ever asked for a proceeding.
SENATOR FRENCH absolved her of a follow up saying he understood
the current lay of the land.
CO-CHAIR PASKVAN noted that she had identified the 1983 AG's
opinion saying this is an open public process and asked if there
is another AG opinion saying it is not.
MS. BALES answered no and explained that the 1983 opinion says
that SARB can hold the proceedings publicly because at that
time, 29 years ago, the information being used in property tax
assessments was not the reserves data, plans of production and
things like that. It was simply the cost of the pipeline. Now
the TAPS assessment is based on reserves information, plans of
production and future activity of the pipeline. So the AG
opinion says two things: one it can be open because that
information isn't disclosed, but if that information is provided
and used it must be protected. That's where the disconnect is.
CO-CHAIR PASKVAN asked if the reason SARB is requesting the
reserve information is because the legislature said it needs
this information to come up with a full and accurate assessment.
Statute says SARB needs to get this information, the process is
a public one, and the DOR is withholding it from SARB.
COMMISSIONER BUTCHER said he had some discussions about the SARB
proceeding, but he was unaware of the legislative directive to
SARB at the time to gather more information. However, the
Department of Law's opinion that confidential data should be
kept confidential would trump a SARB directive in the eyes of
the department, anyway.
4:27:38 PM
MS. BALES said their concern is that SARB is reading one part of
the AG opinion but not the second part and that contains the
reason why the department doesn't provide that information.
CO-CHAIR PASKVAN said AS 43.56.060(e)(2) talks about the SARB
process and using proven reserves for its assessment and the
Department of Revenue in implementing that in 15 AAC 56.110(c)
says that the full and true value of the pipeline property is
based upon the estimated life of the proven reserves then
technically, economically and legally deliverable. Both the
legislature and the DOR said they need the information regarding
reserves and SARB is saying there is a broken process with
respect to how TAPS is being valued.
COMMISSIONER BUTCHER said the Gleason case is still open and not
everything in the decision is accurate. He wouldn't agree with
SARB's opinion on this issue.
MS. BALES said one of the municipalities' concerns is that
information isn't provided during the SARB proceedings, but they
would be willing to provide it to all parties if it was held
confidential in accordance with the statutes the department is
governed by.
CO-CHAIR PASKVAN asked how you have a public hearing if
everything that is said can't be public.
MS. BALES replied that is not different than a Superior Court
hearing that is public, but the court has closed sessions for
confidential items. It happens.
4:32:18 PM
MS. BALES said AS 43.05.040(a) grants the department subpoena
power, but they are time consuming and expensive - and they can
be appealed - making the short timeframes between rendering of
property, the initial assessment value, the ICD and the appeal
to SARB difficult.
CO-CHAIR PASKVAN asked her to define "expensive."
MS. BALES replied expensive in terms of taxpayer appeals and
having to go to court and to compel them to follow the subpoena;
the subpoena itself is not expensive. The department has issued
subpoenas - she signed three last year - and fortunately they
weren't appealed. They are used sparingly, because you have to
know what documents you are looking for (although sometimes they
have used catch-all subpoenas to get all documents used in
calculating a tax or a report). Also it's important to know
specifically in the property assessment world that issuing
subpoenas in a process that has 10 days to issue an informal
conference decision and a 10-day appeal is somewhat useless and
they have actually found the discovery process to be more
fruitful for property tax issues.
4:35:34 PM
SENATOR WIELECHOWSKI asked if the department was aware of
information in BP's internal documents indicating that Prudhoe
and Kuparuk would be cash flow positive through 2054 along with
reserves estimates and values.
MS. BALES replied she would have to talk to the property tax
assessor to find out what documents he used, but at trial they
are four years down the road and some documents weren't even in
existence at the time. The court is looking at different data
than what was available to them in 2007.
SENATOR WIELECHOWSKI said some reserves information was filed in
10K forms and asked if the department looks at that information
periodically or is it something they discovered in a court
hearing along with everyone else.
MS. BALES replied that auditors understand what they are looking
at; their job at the DOR is to find a fair and reasonable
valuation for TAPS and a fair and reasonable tax at the end of
the day. They do ask questions and most times they get very
reasonable responses.
4:38:53 PM
She said under property tax statutes they have the ability to
enter into joint administrative agreements with municipalities
because they use the department's valuation for property tax for
their property tax in their respective municipalities. But they
can only enter into those agreements with a municipality for the
cooperative or joint administration of the assessment authority.
MS. BALES said they had an agreement for several years with the
North Slope Borough for sharing information. The North Slope
Borough had two property tax auditor positions that worked very
closely with the DOR. But those two employees retired and the
borough chose not to fill those positions; so the agreement was
ended.
CO-CHAIR PASKVAN asked who said that they didn't want to enter
into the agreement that this statute allows.
COMMISSIONER BUTCHER replied that a letter from Marcia Davis at
the time discusses the situation and she would be happy to get
that to the committee.
CO-CHAIR PASKVAN said he was told that specific paragraph was
false.
COMMISSIONER BUTCHER asked what specific part.
CO-CHAIR PASKVAN said "continue to cooperative joint
administration of the property tax function." He said the
statute currently says "may" and asked if he objected to
changing it to "shall" enter into agreements....
4:41:52 PM
COMMISSIONER BUTCHER asked if that would basically be ordering
the department and the municipality to go into an agreement as
opposed to having it as a possibility.
CO-CHAIR PASKVAN said it would change the discretion for both
from "may" to "shall".
COMMISSIONER BUTCHER said from discussions he has had with the
department about the joint administrative agreement issue is
that municipalities didn't want to provide the necessary
resources to assist in the assessment function. It didn't come
from the department because working with the North Slope Borough
for the 10 years worked very well.
4:43:24 PM
CO-CHAIR WAGONER said if they change the wording they are as
guilty of heavy handedness as the federal government is.
CO-CHAIR PASKVAN added if a municipality says they want to enter
into an agreement.
CO-CHAIR WAGONER said that would be fine, but don't force the
municipality into having to have an agreement.
MS. BALES said they enjoyed working with the North Slope Borough
that provided a lot of assistance and great resources. She has
had discussions with a couple of other municipalities that
wanted to enter into agreements, but they didn't want to provide
the resources needed to assist them in the property tax
function. And their understanding of those agreements is that
they are not just for the department to provide information to
the municipalities, but there is supposed to be a cooperative
working arrangement.
MS. BALES noted that some of these municipalities have their own
codes that allow them to get information regarding the property
that is within their jurisdiction.
4:46:09 PM
She summarized that the benefits of confidentiality in terms of
tax administration lead to cooperation between the department
and its taxpayers, it fosters trust, it lends credibility to the
division and it aids in obtaining information without costly
litigation.
SENATOR STEDMAN said he understands confidentiality, but he was
concerned about the huge discrepancy between the AOGCC estimates
of reserves and what was referenced by Judge Gleason when she
had the opportunity to look at the confidential data. He
remarked, "When you're a 100 percent out in dealing with
hundreds of billions of dollars there's something wrong with the
system."
COMMISSIONER BUTCHER agreed, but with no disrespect to Judge
Gleason that was her opinion; he has talked to DNR and the AOGCC
and felt comfortable with the state's estimate of recoverable
reserves.
SENATOR STEDMAN asked if he has access to the confidential
information that Judge Gleason had and information in BP's
"Black Box Room" for liquidation or potential selling of their
company and said not having that data is what concerned him.
COMMISSIONER BUTCHER replied that he would have to discuss that
in detail with the team that puts the production forecast
together. For the most part they have been given access to
anything they have asked the companies for as they put the
reserves estimates together.
4:50:06 PM
SENATOR STEDMAN said the discrepancy is too big.
SENATOR WIELECHOWSKI asked if the commissioner agreed with the
administration's Gaffney Kline memo of Oct 15, 2007 that said
many believe "the state is at a disadvantage to the oil
companies in auditing their compliance as little data are
routinely provided to the state." They testified the same thing
in front of the Resources Committee again last year.
COMMISSIONER BUTCHER said he didn't have a specific yes or no
answer to that; he agreed there is information that the
department could get that they haven't had, and they gave a
presentation as to how they are going about doing that. At the
beginning of last year's session when he started this job and
began digging into what was known, he was surprise at what they
didn't know and that they had statutory powers to get the
information. They just hadn't used it. He explained that he
didn't want to "throw the Department of Revenue under the bus"
because they were in the process of moving from a gross tax to a
net tax and were very busy. But the state could and should have
more and they are working to get that information. He added that
Alaska has more information than any other jurisdiction in North
America.
SENATOR WIELECHOWSKI said knowing the economics of the fields is
critically important now because they are considering changing
the tax structure. They have been accused of inexcusable
trustfulness with the oil companies by a judge in the past and
they want to make sure the people's resource gets managed for
the maximum benefit.
The oil companies have been saying for over a year if you roll
back oil taxes they would develop IPad (that is uneconomic under
ACES), and when he asked the director of the Division of Oil and
Gas yesterday if it was being held up because of economic or
technical reasons, he answered technical. This is the kind of
lack of information they are dealing with in trying to figure
out what they are going to do to spur more development to get
more oil in the pipeline.
COMMISSIONER BUTCHER said they have far more information than
when PPT or ACES was passed, and anyone who thought they should
have passed either of those and now thinks they shouldn't be
taking action because they don't have enough information doesn't
ring particularly true.
CO-CHAIR PASKVAN said that was troubling, because he was
inferring that trying to get information is a bad goal.
COMMISSIONER BUTCHER responded that getting information is a
good goal. He meant when decisions have been made with far less
information, it's difficult to understand.
4:55:37 PM
SENATOR WIELECHOWSKI responded when they worked on ACES he had
two binders of DOR economic analysis on fields, net present
values, rates of return and such, but he hadn't seen one single
document like that from the department this session and he
hadn't been able to tell one single field project development
that is uneconomic under ACES. They had that information when
they did ACES.
COMMISSIONER BUTCHER said he wasn't saying because they had less
information they were being irresponsible; they were being
responsible. But now they have more information and the decision
could still be made responsibly.
SENATOR STEDMAN said he rarely agreed with Senator Wielechowski,
and maybe they could work together and update the fields'
analysis.
4:57:04 PM
COMMISSIONER BUTCHER said he would be happy to do that. He also
mentioned that they can share all this confidential information
with the legislature in an executive session; that has been done
in the past. But the issue is the public release of taxpayer
information.
4:57:52 PM
MS. BALES summarized that confidentiality statutes are very
broad, so all information they receive regarding business
affairs or taxpayer information is confidential. She discussed
the SARB and said it is important to note that a complaint they
have heard is that municipalities don't have access to this
information; but they actually have access to all the
information at Superior Court. If they could work on the
problems they have with the SARB the department could get that
information to them sooner.
When information is provided in an administrative proceeding,
whether it be executive session of the legislature or through
the SARB, the issue is that the information then isn't suddenly
public. The division is allowed to release it for tax purposes
only. So, that information cannot be used in other litigation
that doesn't involve taxes under Title 43. Again, she said they
are willing to enter into agreements with municipalities so they
can have information, but those municipalities would have to
incur some costs along with the DOR in doing the property tax
assessments. The intent of those MOUs isn't simply to give
municipalities information.
CO-CHAIR PASKVAN thanked the participants and held SB 192 in
committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOR_ Access to Info-Confidentiality_02-23-12.pdf |
SRES 2/23/2012 3:30:00 PM |
SB 192 |