02/03/2006 09:02 AM House W&M
| Audio | Topic |
|---|---|
| Start | |
| HB63 | |
| HB223 | |
| Report to the Legislature from Alaska Retirement Management Board | |
| HB63 | |
| HB223 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS
February 3, 2006
9:02 a.m.
MEMBERS PRESENT
Representative Bruce Weyhrauch, Chair
Representative Ralph Samuels
Representative Paul Seaton
Representative Peggy Wilson
Representative Max Gruenberg
MEMBERS ABSENT
Representative Norman Rokeberg
Representative Carl Moses
OTHER LEGISLATORS PRESENT
Representative Harry Crawford
Representative Les Gara
COMMITTEE CALENDAR
HOUSE BILL NO. 63
"An Act relating to the oil and gas properties production
(severance) tax as it applies to oil; establishing a minimum
rate of tax for certain fields of five percent; providing for an
adjustment to increase the tax collected when oil prices exceed
$20 per barrel and to reduce the tax collected when oil prices
fall below $16 per barrel; and providing for relief from the tax
when the price per barrel is low or when the taxpayer
demonstrates that a reduction in the tax is necessary to
establish or reestablish production from an oil field or pool
that would not otherwise be economically feasible."
- MOVED HB 63 OUT OF COMMITTEE
HOUSE BILL NO. 223
"An Act levying a tax on certain known resources of natural gas,
conditionally repealing the levy of that tax, and authorizing a
credit for payments of that tax against amounts due under the
oil and gas properties production (severance) tax if
requirements relating to the sale and delivery of the natural
gas are met; and providing for an effective date."
- MOVED HB 223 OUT OF COMMITTEE
REPORT TO THE LEGISLATURE FROM ALASKA RETIREMENT MANAGEMENT
BOARD
- HEARD
HOUSE BILL NO. 374
"An Act relating to establishment of a retirement benefit
liability account in the Department of Revenue and redirecting
deposit of annual dividends of the Alaska Housing Finance
Corporation to that account; and providing for an effective
date."
- BILL HEARING CANCELED
HOUSE BILL NO. 375
"An Act relating to the retirement benefit liability account and
appropriations from that account; relating to deposits of
certain income earned on money received as a result of State v.
Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First
Judicial District); and providing for an effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 63
SHORT TITLE: OIL SEVERANCE TAX
SPONSOR(S): REPRESENTATIVE(S) GARA
01/12/05 (H) READ THE FIRST TIME - REFERRALS
01/12/05 (H) W&M, O&G, RES, FIN
03/18/05 (H) W&M AT 8:30 AM CAPITOL 106
03/18/05 (H) Heard & Held
03/18/05 (H) MINUTE(W&M)
01/13/06 (H) W&M AT 9:00 AM CAPITOL 106
01/13/06 (H) Heard & Held
01/13/06 (H) MINUTE(W&M)
02/01/06 (H) W&M AT 9:00 AM CAPITOL 106
02/01/06 (H) Heard & Held
02/01/06 (H) MINUTE(W&M)
02/03/06 (H) W&M AT 9:00 AM CAPITOL 106
BILL: HB 223
SHORT TITLE: NATURAL GAS PIPELINE INCENTIVE/ GAS TAX
SPONSOR(S): REPRESENTATIVE(S) CROFT
03/17/05 (H) READ THE FIRST TIME - REFERRALS
03/17/05 (H) W&M, O&G, RES
04/25/05 (H) W&M AT 8:30 AM CAPITOL 106
04/25/05 (H) Heard & Held
04/25/05 (H) MINUTE(W&M)
01/11/06 (H) W&M AT 9:00 AM CAPITOL 106
01/11/06 (H) Heard & Held
01/11/06 (H) MINUTE(W&M)
01/18/06 (H) W&M AT 9:00 AM CAPITOL 106
01/18/06 (H) Heard & Held
01/18/06 (H) MINUTE(W&M)
01/25/06 (H) W&M AT 9:00 AM CAPITOL 106
01/25/06 (H) Heard & Held
01/25/06 (H) MINUTE(W&M)
02/01/06 (H) W&M AT 9:00 AM CAPITOL 106
02/01/06 (H) Heard & Held
02/01/06 (H) MINUTE(W&M)
02/03/06 (H) W&M AT 9:00 AM CAPITOL 106
WITNESS REGISTER
LARRY SEMMENS, Board Member
Alaska Retirement Management Board (ARMB)
Kenai, Alaska
POSITION STATEMENT: Presented a report and answered questions
regarding the ARMB's assessment and recommendations addressing
the unfunded liability of the Public Employees' Retirement
System (PERS) and the Teachers' Retirement System (TRS).
GARY BADER, Chief Investment Officer
Treasury Division
Department of Revenue (DOR)
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding the ARMB's
report on PERS/TRS.
ACTION NARRATIVE
CHAIR BRUCE WEYHRAUCH called the House Special Committee on Ways
and Means meeting to order at 9:02:32 AM. Representatives
Weyhrauch and Seaton were present at the call to order.
Representatives Gruenberg, Samuels, and Wilson arrived as the
meeting was in progress. Representatives Crawford and Gara were
also in attendance.
HB 63-OIL SEVERANCE TAX
9:02:41 AM
CHAIR WEYHRAUCH announced that the first order of business would
be HOUSE BILL NO. 63, "An Act relating to the oil and gas
properties production (severance) tax as it applies to oil;
establishing a minimum rate of tax for certain fields of five
percent; providing for an adjustment to increase the tax
collected when oil prices exceed $20 per barrel and to reduce
the tax collected when oil prices fall below $16 per barrel; and
providing for relief from the tax when the price per barrel is
low or when the taxpayer demonstrates that a reduction in the
tax is necessary to establish or reestablish production from an
oil field or pool that would not otherwise be economically
feasible."
CHAIR WEYHRAUCH, having determined there was no one wishing to
testify, closed public testimony on HB 63, and announced that
the committee would discuss it at the end of the meeting.
HB 223-NATURAL GAS PIPELINE INCENTIVE/ GAS TAX
9:03:52 AM
CHAIR WEYHRAUCH announced that the next order of business would
be HOUSE BILL NO. 223, "An Act levying a tax on certain known
resources of natural gas, conditionally repealing the levy of
that tax, and authorizing a credit for payments of that tax
against amounts due under the oil and gas properties production
(severance) tax if requirements relating to the sale and
delivery of the natural gas are met; and providing for an
effective date."
CHAIR WEYHRAUCH, having determined there was no one wishing to
testify, closed public testimony on HB 223, and announced that
the committee would discuss it at the end of the meeting.
^REPORT TO THE LEGISLATURE FROM ALASKA RETIREMENT MANAGEMENT
BOARD
9:04:11 AM
CHAIR WEYHRAUCH announced that the next order of business would
be a report to the legislature presented by a member of the
Alaska Retirement Management Board (ARMB) addressing the
unfunded liability of the Public Employees' Retirement System
(PERS) and the Teachers' Retirement System (TRS).
9:04:44 AM
LARRY SEMMENS, Board Member, Alaska Retirement Management Board
(ARMB), informed the committee that he is also the finance
director for the City of Kenai. He then explained that SB 141
required the ARMB to present a report to the legislature within
120 days of the board's appointment and that the report was to
address 5 key areas of assessment and recommendations. The
first of these, he said, dealt with the board's preliminary
assessment of the financial health of all public employee
retirement plans and all teacher retirement plans. He clarified
that the board's findings are preliminary because it does not
have current actuarial information. The latest report
available, he said, is dated June 30, 2004, and does not contain
the impact of the new [defined contribution] plan established by
SB 141. However, the report does show that the PERS and TRS
systems are unfunded in the amount of $5.7 billion, with PERS
funded at 70 percent and TRS at 63 percent. He further
explained that the employer rates needed to fund those systems
over the next 25 years are 28 percent for PERS and 42 percent
for TRS. However, the ARMB recently set the rates at 21.77
percent for PERS and 26 percent for TRS. He highlighted that
the actuarial evaluation points out that the unfunded liability
has grown since 2003. Although actuarial information for 2005
is not yet available, he said that the board expects the
[unfunded] liability to grow because there has been no
[significant] "investment earnings on $5.7 billion" and the
employers have not paid the full actuarially-required rates.
MR. SEMMENS addressed the second requirement of SB 141 -
assessment of the actuarial services purchased by the board -
and announced that the ARMB approved the hiring of Buck
Consultants as the new actuary. He explained that Buck
Consultants will replicate the 2004 actuarial valuations
prepared by the former consultants, Mercer Human Resource
Consulting. The new 2005 [actuarial] valuation [report] is to
be delivered to the board at the March meeting.
MR. SEMMENS, regarding the third requirement requesting any
additional legislative or administrative policies that might
improve the financial health of the retirement plans, related
that the ARMB recommended no enhancements to benefits for at
least one year because "we" don't really have the ability to
determine the actuarial impact of new benefits. Another
recommendation by the board, he added, is to index the
[beneficiary] health deductible in the new [defined
contribution] plan [commensurate with increases] in the
[Consumer Price Index] ("CPI"), otherwise there could continue
to be a situation like exists now in the current tiers. He
explained that currently a $100 deductible is a $100 deductible
forever. However, if those deductibles were indexed to the CPI,
then the benefit that was intended could occur without being
"stuck to the dollar value."
9:08:44 AM
MR. SEMMENS prefaced his explanation of the fourth requirement
of SB 141, which requests short-term and long-term
recommendations addressing the unfunded liability of retirement
plans, by paraphrasing a section from page 7 of the ARMB report
[original punctuation provided]:
It is clear that the under funding problems of the
retirement systems did not occur overnight and it is
also clear that there are no easy solutions to the
under funding problem. The solution will not be
painless because it will require the commitment of
scarce resources that have competing demands.
However, ignoring this problem will result in
deferring the problem to future generations when
solutions involving resource allocation may prove more
painful than they are today. Alaska's defined benefit
plans have a pension component that is set in statute
with constitutional guarantees. Consequently, there
is no immediate opportunity available to the board to
change the pension liability. The health component of
the defined benefit plans provide some opportunity for
addressing the short fall to the extent that costs to
provide that benefit can be managed.
9:09:58 AM
MR. SEMMENS then listed the short-term recommendations by the
ARMB: to create a new health plan for new hires under the
defined contribution plan; to implement preferred provider
programs where possible; to continue promoting the use of
generic drugs; to continue implementing cost-containment
measures; and to [establish procedures] for the periodic review
of the eligibility of retired dependents, which is projected to
save up to $16 million a year. The long-term recommendations,
he highlighted, include consideration of: extending the payoff
period of the liabilities where like a mortgage, more is paid
ultimately with annual costs being less; requesting the state
make contributions to the systems since it is expected to have a
large budget surplus this year and could reduce the burden on
employers; and adopting a funding strategy that would set a
limit on the rate of employer contributions - using a
combination of the first two long-term strategies or one whereby
the board recommends "nothing less than full funding." Further
long-term recommendations are dependent upon the assessment
findings by Buck Consultants expected in March 2006, and to be
reviewed by the board later that same month, Mr. Semmens said.
The board will continue assessing the fiscal, practical, and
legal issues surrounding pension obligation bonds as a potential
tool in reducing the unfunded, accrued liabilities of [PERS and
TRS] employers.
MR. SEMMENS announced that the final requirement of the ARMB by
SB 141 is to provide recommendations for legislative procedures
regarding fiscal notes for new legislation [affecting the
retirement plans]. He then informed the committee that because
actuarial information is normally needed to assess the impact of
new bills and because those actuarial calculations take time,
the board recommends that any bills affecting the pension system
be introduced early. He explained that there are additional
requirements of SB 141, such as establishing a defined
contribution plan and selecting investment options and managers,
both of which are listed on page 10 of the ARMB report to the
legislature. Also both will be monitored on an ongoing basis by
the board, investment staff, and consultants. Furthermore, he
said, SB 141 requires the board to determine the interest rate
that will be credited to members' accounts that are established
under the Health Reimbursement Arrangement Plan. The
aforementioned rate will likely be related to long-term interest
rates. In regard to ongoing work of the board, he noted that
information needed to help the board define recommendations for
solving the long-term funding problem has been requested from
the actuary.
9:14:50 AM
REPRESENTATIVE WILSON, referring to one of the recommendations
by the board, asked how "early on in the session" the board
would suggest bills [pertaining to the pension system] be
introduced.
MR. SEMMENS said that it depends upon what is being proposed.
Legislation involving an extensive overhaul, he surmised, may
result in the actuary requiring significantly more time to
perform an analysis unlike other [bill proposals] requiring
little time. Initially, the board had discussed that these
kinds of bills be introduced within 90 days of the session, he
related. However, it became clear the board could not set this
kind of parameter because the length of time is dependent upon
each bill. "Generally speaking, it's better to get it in
earlier if we want to analyze it actuarially," he concluded.
CHAIR WEYHRAUCH, regarding Mr. Semmens' earlier mention of
fiscal notes, asked whether the board recommended these be
submitted early as well.
MR. SEMMENS clarified that the bills should be submitted earlier
to allow sufficient time for analysis and preparation of
accurate fiscal notes.
CHAIR WEYHRAUCH, referring to page 11 in the ARMB report
addressing the Office of Administrative Appeals, described the
former appeals process by which PERS and TRS employees submit
complaints regarding benefits and provide testimony followed by
the state's argument and testimony, after which the board would
deliberate and notify the employee of its decision with a
written explanation. He opined that it was a great system for
employees as opposed to a court process, which entails more time
and expense. He asked Mr. Semmens how the Office of
Administrative Appeals and the ARMB are going to deal with
appeals and how might the process change.
MR. SEMMENS related his understanding that the ARMB is not a
part of that process.
9:18:25 AM
GARY BADER, Chief Investment Officer, Treasury Division,
Department of Revenue (DOR), expressed that it is his
understanding as well that the ARMB is not involved with the
grievance process. Those employees with grievances, he
explained, first appeal to the administrator of the system and
then, should they not be satisfied there, go to the Office of
Administrative Appeals.
CHAIR WEYHRAUCH, referring to the section of the ARMB report in
which it states that 18 appeals have been transmitted to the
Office of Administrative Hearings (OAH) by the Division of
Retirement and Benefits, expressed his belief that the [appeals
process] has changed quite a bit. In fact, there seem to be a
lot more procedures and delay associated with an employee's
decision on his/her benefits than existed before.
MR. BADER speculated that in the past it was also difficult for
an appellant to meet the scheduled timelines of the PERS or TRS
board. In this case, it may be possible for appellants to
receive a more expeditious hearing because the hearing officer
might be able to travel to the location where the appellant
resides.
9:20:01 AM
CHAIR WEYHRAUCH asked if it would be possible, with the
knowledge that Buck Consulting would not be presenting its
findings prior to the meeting in March, for the ARMB to present
any updates to the legislature before then.
MR. BADER informed the committee that the ARMB has recently
submitted questions and a number of scenarios to Buck
Consultants suggesting the actuary review combinations of
extending the amortization period, a cap on rates, and a
contribution to the system. Although the board would hope to
know results prior to the March meeting, it has not yet heard
back from the consultants.
9:21:45 AM
CHAIR WEYHRAUCH noted that the ARMB will not present its long-
term recommendations to the legislature until Buck Consultants
provides its findings to the board, which will not occur until
after a secondary actuary has provided it's opinion on the first
actuary's findings. Chair Weyhrauch asked if the second actuary
has been hired.
MR. SEMMENS remarked that the committee is in the process of
hiring a second actuary and is currently reviewing the one
qualified proposal it has received.
CHAIR WEYHRAUCH opined that "this would be the best proposal to
submit because you can sit and second guess."
MR. BADER added that there were other submissions, but they
failed to meet the minimum qualifications. In response to a
question by Chair Weyhrauch, he expressed his belief that the
ARMB would submit any possible actionable information provided
by Buck Consulting to the legislature, regardless of whether the
board had obtained all the facts. He clarified that "the second
actuary's job will be primarily to look at the assumptions that
go into the work done by Buck [Consulting]."
9:24:08 AM
CHAIR WEYHRAUCH observed that there might be another problem to
consider should, at the ARMB's recommendation, the legislature
proceed in submitting bills affecting the health of the pension
plans as early as possible because there is the possibility of a
more conservative or prudent legislator being opposed to taking
a position, or taking any action, until additional analysis is
performed by the second actuary.
MR. BADER opined that it would be prudent to proceed even in the
absence of knowing the total amount of under funding unless the
legislature is contemplating paying off the entire indebtedness
of the system.
9:25:30 AM
CHAIR WEYHRAUCH highlighted the current $6 billion unfunded
liability of the state retirement system and the current surplus
the state could use to pay the unfunded liability. However,
there has been no strong indication the surplus should be placed
toward the payment of the unfunded liability, and therefore he
inquired as to how that should be viewed.
MR. SEMMENS directed the committee's attention to page 7,
section 2 of the report, and opined that "the board is in favor
of the state making contributions to the system because there is
little doubt that it would improve the unfunded status and
reduce the rates the employers will have to pay in the future."
9:26:41 AM
CHAIR WEYHRAUCH replied that "the trick is in the number" that
needs to be assigned [to address the unfunded liability]. The
stronger the position the ARMB takes may translate into a
stronger position the administration takes in potentially
assigning a larger amount of money for the legislature to then
assign. He asked Mr. Semmens whether the ARMB report is going
to report a specific number on the amount of money to pay into
the system to address the unfunded liability.
9:27:13 AM
MR. SEMMENS explained that he could only comment as a fiduciary
would on behalf of the beneficiary, which is to say "the larger
number the better," though "a practical number is obviously
going to be lower than that." In response to Chair Weyhrauch's
observation that Mr. Semmens is in a unique position to both
represent a community that has an unfunded liability as well as
be a fiduciary member of the ARMB for the state, Mr. Semmens
opined that [the state] should make an ongoing commitment to
annually fund at a reasonable enough rate required of employers
to ensure that services are not degraded. However, he said he
was uncertain what the exact rate should be. The ARMB has asked
the actuary to address this, he explained, by providing
"different contribution rates stretched out over different
amortization periods and what would the annual contribution rate
have to be to sustain that rate."
9:28:54 AM
CHAIR WEYHRAUCH relayed that there is a fundamental structure
problem in the state and asked Mr. Semmens whether the ARMB "is
going to take a position on the need for some sort of recurring
source of revenue to address this on a longer sustainable
basis."
MR. SEMMENS replied that although this could be taken into
consideration, it is the board's primary responsibility to "get
money into the system." Therefore, limiting the tools available
to municipalities or the state regarding from where the funds
are acquired and how they are entered into the system is not
desirable.
CHAIR WEYHRAUCH indicated that this could be an opportunity for
the board to address the state's structural problem, which is
that "we have no recurring source of revenue that can be
sustained on a long-term basis except for the vagaries of the
investment returns and the oil prices."
MR. SEMMENS said that although the board would discuss this and
make suggestions, there is some reluctance to specify a certain
source of income. In response to a question by Representative
Wilson regarding whether there is an actuarial number that would
make a difference, Mr. Semmens said that the actuary has been
asked to inform the board of the impact of contributions on the
consolidated rate in increments of $100 million in order to
measure the impact of these varying rates.
9:31:46 AM
CHAIR WEYHRAUCH expressed his appreciation of Mr. Semmens'
position and said he recognizes that Mr. Semmens is "fighting
this battle all the time" while trying to balance debt
obligations with other requirements of running a city and
borough.
MR. SEMMENS opined that the board "will make a difference in the
lives of Alaskans and the things the legislature is doing." He
then expressed his thanks to the committee for the work it's
doing in addressing the [unfunded liability of the state
retirement system].
9:32:38 AM
REPRESENTATIVE GRUENBERG posited the question that if there is a
constitutional right for beneficiaries under the system which
prohibits diminishment of a beneficiary's ability to obtain a
pension, would it not also imply "a legal right of the pension
to have the contributions it's due from the state and the
employers." "Don't they owe that money?" he asked.
MR. SEMMENS opined that as a Certified Public Accountant (CPA)
he is qualified to say that contributions are legally required
and that the ARMB sets the rate.
REPRESENTATIVE GRUENBERG suggested that this information be
included in future ARMB reports and then asked Mr. Bader if he
agrees with Mr. Semmens' opinion.
MR. BADER said that he is not sure he agrees and expressed his
belief that the state has the requirement to provide the
benefit. As far as the means to do so, the best option might be
to fully fund, he commented.
REPRESENTATIVE GRUENBERG reflected that this brings up an
interesting question as to "when does the duty arise as well as
the method by which the payments must be made" and asked Mr.
Bader if he was aware of any legal opinions on that subject.
Upon hearing from Mr. Bader that he was not aware of any,
Representative Gruenberg expressed his interest in learning
whether there is indeed "a legal obligation, when does it arise,
how can it be satisfied, and what is the extent of that
obligation."
9:35:47 AM
CHAIR WEYHRAUCH referred to earlier testimony by Mr. Bader
wherein he named three recommendations under consideration:
extending the payoff period on the debt, adopting a limitation
on the required employer contribution, and requesting
contributions to address the liabilities. Chair Weyhrauch
opined that the payoff period and the employer contributions
might possibly be dealt with administratively, however, "it's
the payoff issue - and I can't emphasize this enough - the
legislature and administration will probably put great weight on
what [the ARMB] recommends, and so we look to [the board] for
the appropriate number."
MR. SEMMENS said that the board will address this question.
HB 63-OIL SEVERANCE TAX
9:36:52 AM
CHAIR WEYHRAUCH announced that the committee would return its
attention to HOUSE BILL NO. 63, "An Act relating to the oil and
gas properties production (severance) tax as it applies to oil;
establishing a minimum rate of tax for certain fields of five
percent; providing for an adjustment to increase the tax
collected when oil prices exceed $20 per barrel and to reduce
the tax collected when oil prices fall below $16 per barrel; and
providing for relief from the tax when the price per barrel is
low or when the taxpayer demonstrates that a reduction in the
tax is necessary to establish or reestablish production from an
oil field or pool that would not otherwise be economically
feasible."
9:37:15 AM
REPRESENTATIVE GRUENBERG moved to report HB 63 out of committee
with individual recommendations and the accompanying fiscal
note.
REPRESENTATIVE SAMUELS objected. He expressed his thanks to
Representative Gara, his staff, Deborah Vogt, and others for
their work on the bill, and opined that the subject of oil taxes
does need to be discussed in the legislature. He explained,
however, that the only reason he objected is due to the
insufficient amount of world-class analysis available to help
him form a decision. He noted that "85 percent of the state's
revenue is at stake here," therefore "you need to know what the
competition around the world is doing [on this topic]." He
informed the committee that he does "hope the bill moves
forward," but wanted to have his objections on the record. He
concluded by expressing his view as to how important the oil and
gas are to the future of this state.
REPRESENTATIVE GRUENBERG expressed his appreciation of the
Representative Samuel's comments and indicated that this could
be seen as a first step.
REPRESENTATIVE WILSON remarked on how significant this source of
income is to the State of Alaska. However, she questioned what
the ramifications would be [should this legislation pass]. She
concluded that although she does not have sufficient
information, she does have confidence in her colleagues to work
further on this legislation as it moves through the other
committees.
REPRESENTATIVE SEATON expressed that he, too, does not feel the
committee has enough analysis before it to determine the right
solution. However, he opined that the legislation would be
heard by the House Resources Standing Committee where "the
expertise has been generated." He specified that his "vote to
move this on is saying that we know something is wrong with the
[oil] tax structure, that we need to change it, and I'm willing
to let the other committees work on the exact amount ...."
9:41:29 AM
A roll call vote was taken. Representatives Gruenberg, Seaton,
Weyhrauch, and Wilson voted in favor of reporting HB 63 out of
committee. Representative Samuels voted against it. Therefore,
HB 63 was reported out of the House Special Committee on Ways
and Means by a vote of 4-1.
HB 223-NATURAL GAS PIPELINE INCENTIVE/ GAS TAX
9:42:14 AM
CHAIR WEYHRAUCH announced that the committee would return its
attention to HOUSE BILL NO. 223, "An Act levying a tax on
certain known resources of natural gas, conditionally repealing
the levy of that tax, and authorizing a credit for payments of
that tax against amounts due under the oil and gas properties
production (severance) tax if requirements relating to the sale
and delivery of the natural gas are met; and providing for an
effective date."
9:42:22 AM
REPRESENTATIVE GRUENBERG moved to report HB 223 out of committee
with individual recommendations and the accompanying fiscal
notes.
9:42:26 AM
REPRESENTATIVE SAMUELS objected for the purposes of discussion.
He thanked the bill sponsors. He then related his belief that
the legislative process was established by the founding fathers
"so that despite all the rhetoric on both sides of the aisles,
nothing ever really swings too far one way or another because it
is so hard to get something through the process." He noted the
difference between those issues that go through the legislative
process where testimony and debate from experts and others bring
"all points of view to the table," as opposed to ballot
initiatives where the use of campaign funds can often [sway
public opinion] and bypass the discussion process. He
highlighted that whereas ConocoPhillips Alaska, Inc. sent
representation to testify as to why the company economically
opposed [HB 223], ExxonMobil Corporation and BP chose not to
even enter the debate on this issue. He opined that "if the
legislative process is going to move forward [without] the main
victims' of this tax [willing] to sit up here and articulate [as
to the economic effects] of this reserves tax ... then we've
lost the key element of having the legislative process, [which]
is to have all points of view come to the table." He opined
that because the bill has a long way to go and he will have
another opportunity to address it in the House Resources
Standing Committee, [the bill] should move forward or there will
be no further debate at committee hearings nor sufficient debate
in the public arena as a ballot initiative.
9:46:18 AM
REPRESENTATIVE SAMUELS then removed his objection.
9:46:21 AM
REPRESENTATIVE GRUENBERG opined that the reason this bill is
moving forward is because there is an initiative behind it and
that if the legislature doesn't act, the public will act.
REPRESENTATIVE WILSON expressed her opinion that sometimes
people vote on initiatives with insufficient facts and thus it's
important that the [legislature] "scrounge up facts."
CHAIR WEYHRAUCH provided, for the public's information, that the
House Special Committee on Ways and Means was established to
explore methods to fund the state's fiscal gap, and therefore
it's the purview of this committee to explore tax policy. He
also identified the variety of other committees on which this
committee's members are assigned to "provide the context for how
we analyze and look at measures." He also expressed his
appreciation of Representative Samuels' comments regarding the
fact that "we bent over backwards to take public testimony on
these measures and have had many ... meetings for that specific
purpose."
9:49:03 AM
CHAIR WEYHRAUCH asked if there was any further objection. There
being none, HB 223 was reported out of House Special Committee
on Ways and Means.
9:49:26 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Ways and Means meeting was adjourned at
9:49 a.m.
| Document Name | Date/Time | Subjects |
|---|