SENATE BILL NO. 130 "An Act relating to confidential information status and public record status of information in the possession of the Department of Revenue; relating to interest applicable to delinquent tax; relating to disclosure of oil and gas production tax credit information; relating to refunds for the gas storage facility tax credit, the liquefied natural gas storage facility tax credit, and the qualified in-state oil refinery infrastructure expenditures tax credit; relating to the minimum tax for certain oil and gas production; relating to the minimum tax calculation for monthly installment payments of estimated tax; relating to interest on monthly installment payments of estimated tax; relating to limitations for the application of tax credits; relating to oil and gas production tax credits for certain losses and expenditures; relating to limitations for nontransferable oil and gas production tax credits based on oil production and the alternative tax credit for oil and gas exploration; relating to purchase of tax credit certificates from the oil and gas tax credit fund; relating to a minimum for gross value at the point of production; relating to lease expenditures and tax credits for municipal entities; adding a definition for "qualified capital expenditure"; adding a definition for "outstanding liability to the state"; repealing oil and gas exploration incentive credits; repealing the limitation on the application of credits against tax liability for lease expenditures incurred before January 1, 2011; repealing provisions related to the monthly installment payments for estimated tax for oil and gas produced before January 1, 2014; repealing the oil and gas production tax credit for qualified capital expenditures and certain well expenditures; repealing the calculation for certain lease expenditures applicable before January 1, 2011; making conforming amendments; and providing for an effective date." 8:09:49 AM AT EASE 8:10:28 AM RECONVENED MARLEANNA HALL, EXECUTIVE DIRECTOR, RESOURCE DEVELOPMENT COUNCIL, JUNEAU, testified in opposition to the bill. She thought that raising taxes on the industry would not stimulate growth. She felt changing the oil tax regime would make Alaska's oil and gas industry seem unstable. She discussed the recent increase in oil throughput and referenced the tax credit. She noted that the members of the council were not asking for a tax decrease, rather to maintain the current structure in order to decrease the possibility of volatility. 8:13:12 AM BRAD FAULKNER, SELF, HOMER (via teleconference), testified in support of the bill. He related that he had started working on the pipeline when he was 18, and had worked in the oil He thought oil tax credits in Cook Inlet would never pay themselves off, and thought oil tax credits on the North Slope were set up to boost the oil industry. He felt the Senate was controlled by the oil industry. He thought it was long since time to get rid of the tax credits. 8:16:12 AM DAVE HANSON, SELF, ANCHORAGE (via teleconference), testified in favor of the bill. He described himself as a fiscal conservative, and felt the state could not afford the oil tax credit program. He discussed the fiscal situation in the state and commented that low oil prices were the cause of the oil industry's financial problems. He highlighted the importance of jobs in the oil industry. 8:19:15 AM BARBARA HUFF TUCKNESS, DIRECTOR, GOVERNMENT AND LEGISLATIVE AFFAIRS, TEAMSTERS LOCAL 959, JUNEAU, felt that the current committee substitute was better than the original bill. She stressed that the legislation would impact many jobs. She felt that previously passed oil and gas legislation, SB 21, had a positive impact on the workers in the oil and gas industry. 8:21:50 AM RENEE REEVE, ALASKA SUPPORT INDUSTRY ALLIANCE, ANCHORAGE (via teleconference); testified in opposition to the bill, and referred to other members of the alliance that were in the room to testify in opposition as well. [Ms. Reeve gave her testimony, then the following individuals read their names and affiliations for the record, also in opposition to the bill.] 8:22:21 AM BEN SCHOFFMANN, KAKIVIK ASSET MANAGEMENT, ANCHORAGE (via teleconference), testified in opposition to the bill. REED CHRISTENSEN, DOWLAND-BACH CORPORATION, ANCHORAGE (via teleconference), testified in opposition to the bill. TERRY SMITH, UNIFIED OPERATIONS, ANCHORAGE (via teleconference), testified in opposition to the bill. CHANTAL WALSH, PETROTECHNICAL RESOURCES OF ALASKA, ANCHORAGE (via teleconference), testified in opposition to the bill. TOM WALSH, PETROTECHNICAL RESOURCES OF ALASKA, ANCHORAGE (via teleconference), testified in opposition to the bill. MIKE HEIRING, UDELHOVEN OILFIELD SYSTEM SERVICES, ANCHORAGE (via teleconference), testified in opposition to the bill. CATHY DUXBURY, UDELHOVEN OILFIELD SYSTEM SERVICES, ANCHORAGE (via teleconference), testified in opposition to the bill. SCOTT VIERA, NORTHSTAR TERMINAL & STEVEDORE, ANCHORAGE (via teleconference), testified in opposition to the bill. PETE STOKES, PETROTECHNICAL RESOURCES OF ALASKA, ANCHORAGE (via teleconference), testified in opposition to the bill. MAYNARD TAPP, HAWK CONSULTANTS, ANCHORAGE (via teleconference), testified in opposition to the bill. PATRICK WALSH, PEAK OILFIELD SERVICES, ANCHORAGE (via teleconference), testified in opposition to the bill. JEFF BENTZ, NORTHSTAR TERMINAL & STEVEDORE, ANCHORAGE (via teleconference), testified in opposition to the bill. DALE KISSEE, PRESIDENT, CONAM CONSTRUCTION, ANCHORAGE (via teleconference), testified in opposition to the bill. LEAH TALUS, STANTEK CONSULTING, ANCHORAGE (via teleconference), testified in opposition to the bill. ADAM CRUM, NORTHERN INDUSTRIAL TRAINING, ANCHORAGE (via teleconference), testified in opposition to the bill. DREMA FITZHUGH, HAWK CONSULTANTS, ANCHORAGE (via teleconference), testified in opposition to the bill. CARI-ANN CARTY, ALASKA PROCESS INDUSTRY CAREERS CONSORTIUM, ANCHORAGE (via teleconference), testified in opposition to the bill. JOSEPH COLONELL, COLONELL ASSOCIATES, ANCHORAGE (via teleconference), testified in opposition to the bill. STEVE POST, NORTH STAR EQUIPMENT, ANCHORAGE (via teleconference), testified in opposition to the bill. MARTHA PECK, ALASKA PROCESS INDUSTRY CAREERS CONSORTIUM, ANCHORAGE (via teleconference), testified in opposition to the bill. NICK PEPPERWORTH, UDELHOVEN OILFIELD SYSTEM SERVICES, ANCHORAGE (via teleconference), testified in opposition to the bill. DENNIS HEBNER, SUPERIOR MACHINE AND WELDING, ANCHORAGE (via teleconference), testified in opposition to the bill. BRIAN BENSON, AIR LIQUIDE, ANCHORAGE (via teleconference), testified in opposition to the bill. JOEY CRUM, NORTHERN INDUSTRIAL TRAINING, ANCHORAGE (via teleconference), testified in opposition to the bill. Ms. Reeve stated that all those introduced individuals were opposed to the legislation. 8:24:20 AM MICHAEL JESPERSON, SELF, ANCHORAGE (via teleconference), spoke against the legislation. He stated that he and no one in his family had ever worked for the oil industry. SB 130 was HEARD and HELD in committee for further consideration. 8:25:52 AM AT EASE 8:28:14 AM RECONVENED SENATE BILL NO. 130 "An Act relating to confidential information status and public record status of information in the possession of the Department of Revenue; relating to interest applicable to delinquent tax; relating to disclosure of oil and gas production tax credit information; relating to refunds for the gas storage facility tax credit, the liquefied natural gas storage facility tax credit, and the qualified in-state oil refinery infrastructure expenditures tax credit; relating to the minimum tax for certain oil and gas production; relating to the minimum tax calculation for monthly installment payments of estimated tax; relating to interest on monthly installment payments of estimated tax; relating to limitations for the application of tax credits; relating to oil and gas production tax credits for certain losses and expenditures; relating to limitations for nontransferable oil and gas production tax credits based on oil production and the alternative tax credit for oil and gas exploration; relating to purchase of tax credit certificates from the oil and gas tax credit fund; relating to a minimum for gross value at the point of production; relating to lease expenditures and tax credits for municipal entities; adding a definition for "qualified capital expenditure"; adding a definition for "outstanding liability to the state"; repealing oil and gas exploration incentive credits; repealing the limitation on the application of credits against tax liability for lease expenditures incurred before January 1, 2011; repealing provisions related to the monthly installment payments for estimated tax for oil and gas produced before January 1, 2014; repealing the oil and gas production tax credit for qualified capital expenditures and certain well expenditures; repealing the calculation for certain lease expenditures applicable before January 1, 2011; making conforming amendments; and providing for an effective date." 8:36:37 AM RICK KOCH, CITY OF KENAI (via teleconference), testified against the bill. He thought it had fairly significant negative impacts to the Railbelt. He thought there was a difference in consumers between Cook Inlet and North Slope. He encouraged the committee to consider the ultimate consumer of the resource, and who would bear the burden of the tax credit structure. 8:38:33 AM DON LAICHAK, SELF, ANCHORAGE (via teleconference), testified in opposition to the bill. He had worked for several oil companies. He believed that smaller oil fields were the future of the state. He discussed the numerous costs associated with oil production. SENATE BILL NO. 130 "An Act relating to confidential information status and public record status of information in the possession of the Department of Revenue; relating to interest applicable to delinquent tax; relating to disclosure of oil and gas production tax credit information; relating to refunds for the gas storage facility tax credit, the liquefied natural gas storage facility tax credit, and the qualified in-state oil refinery infrastructure expenditures tax credit; relating to the minimum tax for certain oil and gas production; relating to the minimum tax calculation for monthly installment payments of estimated tax; relating to interest on monthly installment payments of estimated tax; relating to limitations for the application of tax credits; relating to oil and gas production tax credits for certain losses and expenditures; relating to limitations for nontransferable oil and gas production tax credits based on oil production and the alternative tax credit for oil and gas exploration; relating to purchase of tax credit certificates from the oil and gas tax credit fund; relating to a minimum for gross value at the point of production; relating to lease expenditures and tax credits for municipal entities; adding a definition for "qualified capital expenditure"; adding a definition for "outstanding liability to the state"; repealing oil and gas exploration incentive credits; repealing the limitation on the application of credits against tax liability for lease expenditures incurred before January 1, 2011; repealing provisions related to the monthly installment payments for estimated tax for oil and gas produced before January 1, 2014; repealing the oil and gas production tax credit for qualified capital expenditures and certain well expenditures; repealing the calculation for certain lease expenditures applicable before January 1, 2011; making conforming amendments; and providing for an effective date." 8:54:17 AM CURTIS THAYER, ALASKA CHAMBER OF COMMERCE, ANCHORAGE (via teleconference), testified in opposition to SB 130. He thought the state budget was not sustainable. Vice-Chair Micciche noted that there may be additional testimony for the bill. SENATE BILL NO. 130 "An Act relating to confidential information status and public record status of information in the possession of the Department of Revenue; relating to interest applicable to delinquent tax; relating to disclosure of oil and gas production tax credit information; relating to refunds for the gas storage facility tax credit, the liquefied natural gas storage facility tax credit, and the qualified in-state oil refinery infrastructure expenditures tax credit; relating to the minimum tax for certain oil and gas production; relating to the minimum tax calculation for monthly installment payments of estimated tax; relating to interest on monthly installment payments of estimated tax; relating to limitations for the application of tax credits; relating to oil and gas production tax credits for certain losses and expenditures; relating to limitations for nontransferable oil and gas production tax credits based on oil production and the alternative tax credit for oil and gas exploration; relating to purchase of tax credit certificates from the oil and gas tax credit fund; relating to a minimum for gross value at the point of production; relating to lease expenditures and tax credits for municipal entities; adding a definition for "qualified capital expenditure"; adding a definition for "outstanding liability to the state"; repealing oil and gas exploration incentive credits; repealing the limitation on the application of credits against tax liability for lease expenditures incurred before January 1, 2011; repealing provisions related to the monthly installment payments for estimated tax for oil and gas produced before January 1, 2014; repealing the oil and gas production tax credit for qualified capital expenditures and certain well expenditures; repealing the calculation for certain lease expenditures applicable before January 1, 2011; making conforming amendments; and providing for an effective date." 9:07:40 AM DELICE CALCOPE, SELF, SUTTON (via teleconference), testified in support of the bill. She was in favor of raising taxes on the oil industries. 9:09:42 AM MIKE COONS, SELF, PALMER (via teleconference), testified in opposition to SB 130. He described himself as a conservationist. He thought the tax credits had been working and had stimulated more oil production and exploration. Vice-Chair Micciche CLOSED public testimony for SB 130. Vice-Chair Micciche passed the gavel to Co-Chair MacKinnon. SB 130 was HEARD and HELD in committee for further consideration. 9:12:02 AM AT EASE 9:15:03 AM RECONVENED