Opposition of HB 253 • Before House Resources
Testimony provided by Marleanna Hall • February 19, 2016 • Anchorage LIO

Good afternoon, my name is Marleanna Hall. I am the executive director for the Resource Development
Council for Alaska. RDC is a membership funded, statewide business association representing the
tourism, forest products, oil and gas, mining, and fishing industries.

RDC strongly opposes HB 253 as this is clearly not the time to raise taxes on Alaska’s mining industry.
The mining industry is suffering through a deep and prolonged downturn in commodity prices while
development and operating costs continue to rise. In fact, the mining sector has been in a deep global
recession for the last four years. Companies are cutting budgets and making tough investment decisions.
Future prospects and projects in Alaska are at risk. Exploration activities are sharply down.

Increasing taxes on the industry at this time will compound a bad situation and risks halting investment
in future projects that will ultimately create new revenue streams for Alaska. Conversely, the more
Alaska taxes companies to produce a commodity, the less likely a company will invest in future
production. HB 253 moves us in the wrong direction.

HB 253 increases the Alaska Mining License Tax payment by 29 percent and removes the 3.5-year
exemption designed to attract new mines. Not only does removing the exemption offer no immediate or
near-term revenue for the State, it potentially impacts the feasibility of future mining projects. We
should not risk projects and the corresponding jobs and increased private sector economic activity. One
large mine would bring in more revenue to the state than what is estimated to be generated by this
flawed bill.

A major concern RDC has with HB 253 is that the administration has not conducted a risk analysis on
the bill’s impact on the mining industry. The effect of this tax proposal must be fully reviewed and
unintended consequences, including potential impact on future investment, must be considered.
I would like to point out that the mining industry pays its way in Alaska and is a revenue producer for
the State of Alaska. Moreover, it is the largest producer of revenue for the Northwest Arctic Borough,
and the largest payer of property taxes in the Fairbanks North Star Borough and the City and Borough
of Juneau.

For more than 20 years, RDC has advocated for a long-term fiscal plan, including efforts to limit
Unrestricted General Fund spending to a sustainable level, support some use of the Permanent Fund
earnings as part of a fiscal plan, and tax policy and incentives that encourage future investment in
Alaska’s resource industries.

In closing, HB 253 will harm the industry at a time when it is struggling with low commodity prices and
tight capital markets. The industry is not asking for a decrease in taxes during this commodity bear
market, like other countries are considering, but instead asking, as the state considers changes to tax
policy, that the state do no harm.

Chairman Talerico and members of House Resources, thank you for the opportunity to testify in opposition of HB 253.