Legislature(2019 - 2020)
2019-02-20 House JournalFull Journal pdf
2019-02-20 House Journal Page 0181 HB 59 HOUSE BILL NO. 59 by the House Rules Committee by request of the Governor, entitled: "An Act repealing the credit for municipal payments against the state levy of tax on oil and gas exploration, production, and pipeline transportation property; repealing the levy of tax by a municipality on oil and gas exploration, production, and pipeline transportation property; and providing for an effective date." was read the first time and referred to the Resources, Community & Regional Affairs, and Finance Committees. The following fiscal note(s) apply: 1. Zero, Dept. of Commerce, Community, & Economic Development 2. Zero, Dept. of Education & Early Development 3. Fiscal, Dept. of Education & Early Development/Fund Capitalization 4. Fiscal, Dept. of Revenue The Governor's transmittal letter dated February 12 follows: "Dear Chief Clerk: Under the authority of Article III, Section 18, of the Alaska Constitution, I am transmitting a bill relating to repealing the credit for municipal payment against the state levy of tax on oil and gas exploration, production, and pipeline transportation property and the levy of tax by a municipality on oil and gas exploration, production, and pipeline transportation property. Under current law, the state assesses the value of oil and gas exploration, production, and pipeline transportation property. Municipalities with this property in their jurisdiction can then levy a property tax based on the state's assessment. Taxpayers are then required to pay a tax to two taxing jurisdictions – the municipality and the state. This system is inefficient for both taxpayers and the state. Taxpayers are allowed to credit payments made to a municipality 2019-02-20 House Journal Page 0182 against the tax due to the state. Due to the credit allowed against the state tax levy for municipal tax payments, the state general fund receives only a fraction of the revenues generated by this tax. This results in lower general fund revenues, from vital properties of statewide economic importance, to be appropriated to municipalities around the state and support of vital state programs. This bill would repeal the ability of municipalities to levy tax on these properties of vital statewide importance. Therefore, the bill would also repeal the credit for a payment made to a municipality against the state tax. Instead, the state would assess and collect all of the tax on these properties. As a result of the exclusion of these properties from a municipality's tax base, the required local contribution for public school funding would be reduced. The bill would also implement efficiencies in administration of the tax. Taxpayers would only have one taxing jurisdiction to report to on these properties. The bill would streamline the appeals process to be consistent with other administrative appeals by eliminating automatic trial de novo at the superior court level. Taxpayers could still appeal to the specialized State Assessment Review Board for a hearing. I urge your favorable action on this measure. Sincerely, /s/ Michael J. Dunleavy Governor"