Most people ask themselves at one time or another “how much is too much?” Whether it’s about what we’re eating, what we’re spending our money on or what we’re drinking most of us have asked ourselves that question. This session, it’s a question Headlamp wishes the Legislature would ask itself. Which brings us to this week’s Bad Bill of the Week brought to us by Representative Andy Josephson’s HB 99: Oil and Gas Tax Credit Disclosures.
It goes without saying that HB 99 does not solve our financial situation and does not strengthen the private sector, in fact, Headlamp believes this legislation has the potential to weaken the private sector.
At first blush, Alaskans might look at HB 99 and think it’s a reasonable piece of legislation. Representative Josephson’s sponsor statement reads: “(HB 99) asks companies who file for tax credits to agree to release a general description, the purpose, and the location of the expense as a condition of participation in the credit program.”
Sounds easy enough, right? Wrong.
The way this legislation is written, the Department of Revenue would have the ability to ask, not just the questions above, but for virtually any information they deem necessary. Even more concerning, it wouldn’t take returning to the Legislature to add information to the list of necessary items, but simply a change in regulation.
Headlamp has major concerns with giving any government department carte blanche authority to demand disclosures from the private sector for a myriad of reasons, not the least of which is the potential impact on Alaskan support companies.
A year from now, regulations could require a company receiving tax credits to detail the contracts related to a project. For example, the amount a support industry company was paid for work on a project could become public, arming their competitors with vital information not relevant to the state, but very relevant to their business.
At a time when we should be working to move Alaska out of a recession by encouraging investment, strengthening the private sector, and making the state more business friendly, Headlamp believes HB 99 will move us in the opposite direction. Headlamp thinks this legislation could be used to weaken private sector companies doing business in Alaska by exposing information to competitors under the guise of disclosure.
Asking for some disclosure may be reasonable. However, as it stands, when it comes to “how much is too much” Headlamp says HB 99 is too much.