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 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.