SENATE BILL NO. 92 "An Act establishing an income tax on certain entities producing or transporting oil or gas in the state; and providing for an effective date." 9:08:11 AM SENATOR CATHY GIESSEL, SPONSOR, reintroduced the legislation. She expressed that the bill was a simple update to the state's corporate tax structure and would place the same responsibility on the many types of corporations that were profiting from the state's oil and gas resources. She stressed that the bill effectuated the state constitution in ensuring that the state received maximum benefit for the people in the state. 9:09:07 AM Co-Chair Hoffman OPENED public testimony. 9:09:40 AM REBECCA LOGAN, CHIEF EXECUTIVE OFFICER, THE ALLIANCE, ANCHORAGE (via teleconference), testified against SB 92. The Alliance opposed the bill, which she thought clearly targeted one company and one industry and ignored future investment. She asserted that Hilcorp had invested in Cook Inlet, which had led to increased oil and gas production and delayed shortages. Hilcorp had invested in the North Slope, resulting in greater production than would otherwise have happened. She thought the tax policy in 2012 had led to more production and more royalties. 9:11:35 AM ADAM HASSE-ZAMUDIO, SELF, WASHINGTON DC (via teleconference), spoke in support of the legislation. He supported closing the tax loophole that benefited out-of- state corporations. He did not think the tax loophole incentivized companies to support the state's economy. He referenced the constitution. 9:12:50 AM MARY MAY, SELF, SOLDOTNA (via teleconference), testified in support of SB 92. She thought 77 percent of Alaskans were in support of the bill's proposal. She referenced the state constitution. She thought Hilcorp paid taxes in every state except Alaska. She emphasized that there was no evidence that giving a tax break to S corporations would bring more revenue to the state. She noted that the bill targeted companies with taxable income over $5 million and would not affect small businesses. She thought it was far past time that the state benefited from the extraction of resources. She mentioned attrition because of crumbling infrastructure and under funded schools. 9:16:05 AM THOMAS BACHERK, SELF, FAIRBANKS (via teleconference), spoke in support of the bill. He thought it was far overdue for such a change. He thoguht there was no reason S corporations should be given an advantage over C corporations. He approved of the additional funds to state coffers to fund education and state services. He pointed out that the company could deduct any state tax from its federal tax liability. 9:17:51 AM SCOTT CRASS, SELF, FAIRBANKS (via teleconference), testified in support of the legislation. He thought the bill was common-sense reform that would bring over $100 million into the state's revenue. He thought Alaska was the only state that did not collect income tax from C corporations. He did not think the bill was punitive, but thought it leveled the playing field. He thought the bill was a long-overdue alignment with other states. He referenced the state constitution. He thought the reform would allow the state to recapture tax dollars sent to the federal government. He thought the bill encapsulated years of recommendations from fiscal working groups. 9:20:12 AM SARAH FURMAN, SELF, FAIRBANKS (via teleconference), spoke in support of the bill. She was concerned about the outlook for the state budget and the projected deficit. She referenced school closures in Fairbanks. She supported increases in education spending and energy investment and thought the bill would bring in much-needed revenue. She thought it was unfair that some corporations paid state income tax while others did not. She thought every other state required S corporations to pay tax. She cited recent polling that indicated 70 percent of Alaskans supported the bill. 9:22:37 AM CATHY WALLING, SELF, FAIRBANKS (via teleconference), testified in support of the legislation. She thanked the other testifiers and echoed their comments. She thought the bill was a long-awaited effort to close a loophole. She supported more revenue generation and leveling the playing field. She thought the state and country were in a very different position than it was in 2012. 9:25:06 AM JESSE CARLSTROM, SELF, ANCHORAGE (via teleconference), spoke against the bill. He had lived in Alaska for over 30 years and worked in the shipping industry. He thought the bill was bad policy that targeted one company and one industry. He thought the bill ignored what Hilcorp had done for the state. He discussed Hilcorp's payment of royalties and its investments. He discussed job creation. He was concerned about the message the bill sent to those wanting to invest in the state. 9:26:47 AM THERESA OBERMEYER, SELF, ANCHORAGE (via teleconference), testified in support of the legislation. She associated herself with the comments made earlier in support of the bill. She lived in the state for 47 years. She thought the state was at a turning point. She thought the tax regime should have been changed in 2020. She mentioned former Governor Frank Murkowski and his support of the bill. Co-Chair Hoffman CLOSED public testimony. SB 92 was HEARD and HELD in committee for further consideration.