Legislature(2005 - 2006)
03/22/2006 09:49 AM House W&M
| Audio | Topic |
|---|---|
| Start | |
| HB418 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS
March 22, 2006
9:49 a.m.
MEMBERS PRESENT
Representative Bruce Weyhrauch, Chair
Representative Ralph Samuels
Representative Paul Seaton
Representative Peggy Wilson
Representative Max Gruenberg
Representative Carl Moses
MEMBERS ABSENT
Representative Norman Rokeberg
COMMITTEE CALENDAR
HOUSE BILL NO. 418
"An Act relating to a mining production tax; relating to the
mining license tax; relating to production royalties on
minerals; relating to exploration incentive credits; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 492
"An Act relating to the transfer of the state's interest in
certain gas to the Alaska Retirement Management Board for the
purpose of satisfying the unfunded accrued actuarial liability
of the state and employers of teachers in the state to state
retirement systems; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 418
SHORT TITLE: MINING PROD. & LICENSE TAXES/ROYALTIES
SPONSOR(S): REPRESENTATIVE(S) SEATON
02/01/06 (H) READ THE FIRST TIME - REFERRALS
02/01/06 (H) W&M, RES, FIN
02/22/06 (H) W&M AT 9:00 AM CAPITOL 106
02/22/06 (H) Heard & Held
02/22/06 (H) MINUTE(W&M)
02/24/06 (H) W&M AT 9:00 AM CAPITOL 106
02/24/06 (H) Heard & Held
02/24/06 (H) MINUTE(W&M)
02/27/06 (H) W&M AT 9:00 AM CAPITOL 106
02/27/06 (H) Heard & Held
02/27/06 (H) MINUTE(W&M)
03/01/06 (H) W&M AT 9:00 AM CAPITOL 106
03/01/06 (H) Heard & Held
03/01/06 (H) MINUTE(W&M)
03/06/06 (H) W&M AT 9:00 AM CAPITOL 106
03/06/06 (H) <Bill Hearing Canceled>
03/22/06 (H) W&M AT 9:00 AM CAPITOL 106
WITNESS REGISTER
SCOTT BRENNAN, Campaign Director
Alaskans for Responsible Mining
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 418.
IAN LAING, Staff
to Representative Paul Seaton
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Summarized the difference between HB 418
and the committee substitute, Version S, on behalf of
Representative Seaton, sponsor.
ACTION NARRATIVE
CHAIR BRUCE WEYHRAUCH called the House Special Committee on Ways
and Means meeting to order at 9:49:27 AM. Representatives
Weyhrauch, Gruenberg, Moses, Samuels, Seaton, and Wilson were
present at the call to order.
HB 418-MINING PROD. & LICENSE TAXES/ROYALTIES
9:49:36 AM
CHAIR WEYHRAUCH announced that the only order of business would
be HOUSE BILL NO. 418, "An Act relating to a mining production
tax; relating to the mining license tax; relating to production
royalties on minerals; relating to exploration incentive
credits; and providing for an effective date."
9:50:14 AM
REPRESENTATIVE SEATON informed the committee that since the last
hearing on HB 418, a committee substitute (CS) was drafted to
realign the bill to the current mining license tax structure yet
with adjustments made to rentals to provide a more reasonable
return to [Alaska residents]. The earlier bill version
presented somewhat of a dichotomy, he relayed, in that it went
from a net profit tax to a gross unlike the proposed petroleum
production profits tax (PPT) which goes "from a gross production
to a net."
9:53:10 AM
SCOTT BRENNAN, Campaign Director, Alaskans for Responsible
Mining, a coalition of 19 conservation, tourism, fishing, and
native organizations, explained that the coalition is working to
raise public awareness of the impacts of the mining industry.
He further clarified that the coalition supports HB 418 because
the legislation aims to improve regulations [in the mining
industry] to ensure that the benefits to Alaskans are maximized
and the risks are minimized. He relayed that he often asks
Alaska residents to imagine they own a sizeable amount of
mineral-rich land and to determine what they would consider to
be a fair market value for the sale of those minerals to a
foreign-owned mining industry wishing to purchase and sell the
deposits. He noted that in terms of fair market value,
Representative Seaton's proposal might "look a bit modest" if
one were to think of its proposed 3 percent of the value of the
mineral which would [only] be $30,000 if the mineral value were
$1 million. He highlighted that Alaska and Nevada are the only
states with a profits-based royalty - one which generally
provides the lowest rate of return to the residents of that
particular state. He said that his coalition encourages the
committee to "look at what is done nationally and also consider
[today's] record-high mineral prices ...." He noted that it
could be argued that the current net-profit system is not
consistent with the constitutional requirement that the resource
development provide the maximum benefit to the people of the
state. He expressed his encouragement that the committee
ensures that the mining companies, many foreign-owned and
experiencing record profits, pay their fair share just as former
governors, Jay S. Hammond and Walter J. Hickel, have argued they
should. In conclusion, he opined that "there is no reason an
Alaskan who's working at one of these mines should pay higher
taxes than the foreign-owned companies profiting at our
expense."
9:57:55 AM
CHAIR WEYHRAUCH determined there was no further testimony.
9:58:30 AM
REPRESENTATIVE WILSON moved to adopt the CS for HB 418, Version
24-LS1456\S, Chenoweth/Bullock, 3/22/06 as the working document.
There being no objection, Version S was before the committee.
9:58:58 AM
IAN LAING, staff to Representative Paul Seaton, Alaska State
Legislature, on behalf of Representative Seaton, sponsor of HB
418, informed the committee that Version S amends the current
license tax with changes to the royalty as well as to the rents
for both coal and minerals.
10:00:01 AM
CHAIR WEYHRAUCH announced that HB 418 would be held over.
REPRESENTATIVE SEATON informed the committee that a side-by-side
comparison of Version S and the original bill can be found in
the committee packets.
10:00:32 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Ways and Means meeting was adjourned at
10:00 a.m.
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