Legislature(2011 - 2012)HOUSE FINANCE 519
04/02/2012 09:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB361 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 361 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 2, 2012
9:36 a.m.
9:36:00 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 9:36 a.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Wyn Menefee, Operations Manager, Division of Mining, Land
and Water, Department of Natural Resources.
SUMMARY
HB 361 DISPOSALS OF STATE RESOURCES
CSHB 361(FIN) was REPORTED out of committee with
a "do pass" recommendation and with new
indeterminate fiscal note from the Department of
Natural Resources and previously published zero
fiscal notes: FN1 (DFG), FN2 (DOT).
HOUSE BILL NO. 361
"An Act relating to the Alaska Land Act, including
certain lease, sale, and other disposal of state land
and materials; relating to production royalties from
miners; relating to rights to use state water; and
providing for an effective date."
9:36:07 AM
Representative Edgmon MOVED to ADOPT Amendment 4:
Page 17, Line 26 through Page 18, Line 3:
Delete all material.
Renumber following bill sections accordingly.
Co-Chair Stoltze OBJECTED for purpose of discussion.
Representative Edgmon explained the purpose of Amendment 4
was to delete Section 26, on page 17 of the bill. The
amendment accomplishes the removal of unintended
consequences of transforming temporary water use
authorization into a permanent water right or
authorization. He offered the amendment while being in
support of the bill.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 4 was adopted.
9:39:30 AM
AT EASE
9:40:08 AM
RECONVENED
Representative Gara MOVED to ADOPT Amendment 5:
Page 7, line 24:
insert after the word "operations": "that
generate less than $10,000 in annual gross
income."
Co-Chair Stoltze OBJECTED for purpose of discussion.
Representative Gara referred to page 7 of the bill. He
pointed out there was no definition of "small operations"
that would be exempted from the production royalty. He
explained the need for some limitation before being
exempted from the royalty tax. The amendment offered that
small mining operations producing less than $10,000 in
annual gross income be exempted. He wanted to make sure
that larger companies were not able to avoid the royalty
payment. He did not know if that was the intention of the
department.
WYN MENEFEE, OPERATIONS MANAGER, DIVISION OF MINING, LAND
AND WATER, DEPARTMENT OF NATURAL RESOURCES stated that the
$10,000 gross income is in the ballpark. He believed the
limit was more appropriate in regulation because of the
variable prices of minerals. There might be fluctuation in
the prices of gold versus silver versus platinum. The
administration perspective believed it would be better for
the department to address the dollar number in regulation.
Vice-chair Fairclough referred to an earlier Representative
Seaton gravel bill [HB 89] and believed there was a
different threshold that expanded the reporting
requirements because of the auditing burden. She remarked
that it was around the $40,000 mark.
Representative Neuman agreed that the Department of Revenue
testified they had removed all taxes because it was too
inefficient.
Mr. Menefee interjected that the present bill and the
gravel bill [HB 89] do not link together. The royalties in
HB 361 are on locatable minerals. The other bill [HB 89]
referred to a mining license tax.
Representative Gara commented that gravel extraction is for
public purpose therefore, it is important to keep the cost
down. Mining is not extraction for a public purpose, but it
is for the private operator's profit. He is happy to
accomplish the change in regulation, but without any
language in the bill there is no control over where the
limit is set. He remarked that he would be happy to work on
better language before the bill hits the floor. At present
there was nothing in the bill stating someone would not pay
taxes even if they made a lot more money. He thought it to
be an unconstitutional delegation of powers. There must be
standards for the agency.
Mr. Menefee indicated the department could try to work on
better language. He added that he would rather not see a
dollar amount, but the state would not be obtaining royalty
payments anyway as it is a net royalty amount. He agreed
there could be some different language crafted, but the
challenge would be in finding the correct language since
net royalties can also be exempted on larger operations.
The intention is to deal with groups extracting and
developing a small amount of mineral product. He
acknowledged that he would try to work on redrafting the
language.
Representative Gara WITHDREW Amendment 5.
9:46:55 AM
Representative Gara MOVED to ADOPT Amendment 6:
page 18, line 3:
insert after "project": "if the current standards
for issuing a temporary water use authorization
under this section are met."
Co-Chair Stoltze OBJECTED for purpose of discussion.
Representative Gara explained the amendment had to do with
granting water use authorization permits that use a
significant amount of water.
Co-Chair Stoltze interrupted that a similar amendment had
just been passed.
Representative Gara WITHDREW Amendment 6.
9:48:07 AM
Vice-chair Fairclough summarized the three fiscal notes.
The first from the Department of Natural Resources listed
that from FY 13 to FY 18 a zero fiscal note and an
indeterminate in the change to revenues. The second fiscal
note, the Department of Transportation and Public
Facilities, stated that from FY 13 to FY 18, a zero fiscal
note and zero changes to revenue. And the third, the
Department of Fish and Game, was a zero fiscal note from FY
13 to FY 18.
Representative Doogan revealed that he did not think the
legislature should be handing legislative authority to the
agencies to make public policy decisions. The Finance
committee makes policy by deciding how much money is given
back or taken away from companies and people. He believed
there has been a habit of handing out exemptions through
legislation or methods such as revealed in the bill. He
voiced his concerns, but indicated he would not keep the
bill from moving out of committee.
Representative Neuman asked the department about fiscal
note 3002. In the language section, on page 2, the
Department of Revenue (REV) mentions that the primary
benefit would come from the savings costs through staff
time saved in less auditing and royalty paperwork. He
stressed that considerable legislation passed through the
committee referencing cost savings, but efficiencies are
never seen. The fiscal note said the savings would go into
more pressing mining issues. He wondered if that just moves
manpower around and exactly where would the savings be seen
and how would it be measured. Mr. Menefee responded that
the savings and staff efficiencies would come in several
different ways through the bill. He noted that if the
current backlog could be finished and new incoming
applications were kept current, the department could
reallocate staff time. The savings in one area does not
automatically mean it can be cut out of budget as the staff
will be needed to catch up with the backlog. The other
savings would come to the applicant who will need less time
waiting for their application to be processed. A third
savings is in the cost for the applicant. The applicant may
not have to go to public notice for an auction or another
appraisal.
9:53:45 AM
Representative Neuman asked whether there was an exact way
to measure the number of people being helped and the staff
reduction time. Mr. Menefee responded that he had given
some cost savings examples to the committee before. A
savings of 130 days off a material sale processing
translates into 2600 hours of time savings to the
applicants in a year. The staff savings time would be less.
The amount of savings will be incremental and challenging
so hard to predict accurately. Representative Neuman stated
that he wanted to return to the Missions and Measures and
the ultimate goal of measuring department efficiency.
Co-Chair Stoltze pointed out the value of the bill when
more money was being spent on a $10,000 lease then it was
worth. He agreed the department's time was important, but
also the public's time. The bill creates a more efficient
process.
Representative Doogan agreed, but voiced his concern that
there was no upper limit in the bill. He would be more
comfortable if there was a ceiling. The legislature is
giving the power to the department to do whatever they want
and that did not make him comfortable.
9:57:39 AM
Representative Costello commented that the legislature
would like departments to come and tell them about finding
efficiencies that have grown out of the expertise and
decades-long hands-on involvement that state workers have
with the issues. The process has been a long time in the
making. In the bill, the department has indicated they will
be reviewing some of the statues and providing
efficiencies. She signified that would be a positive
exchange with the state, executive, and legislative
branches. She hoped more departments would be forthcoming
with similar legislation.
Vice-chair Fairclough MOVED to report CSHB 361 (FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 361(FIN) was REPORTED out of committee with a "do
pass" recommendation and with new indeterminate fiscal note
from the Department of Natural Resources and previously
published zero fiscal notes: FN1 (DFG), FN2 (DOT).
ADJOURNMENT
The meeting was adjourned at 10:00 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB361 HF followup questions 3-21-12.pdf |
HFIN 4/2/2012 9:30:00 AM |
HB 361 |
| HB361 Amendments 3-4 Gara Edgemon.pdf |
HFIN 4/2/2012 9:30:00 AM |
HB 361 |