The Senate is working on getting final plans in order to have a new oil and gas tax bill before the public by the end of next week. President Gary Stevens has said he has no intention of working with the tax-rewrite bill the governor introduced – and the House passed. Tuesday morning he said he expects to see the fresh bill ready for hearings before the Resources Committee by Friday of next week. He says the goal is to get the measure to the House for consideration at least a month before the end of the session.
Anchorage Republican Lesil McGuire is taking charge of rewriting a portion of the bill dealing with progressivity – how tax rates vary as prices rise and fall. She says consultants and drafters are currently working on three different alternatives.
“Our strategy at this point, Senator Wagoner and I have talked, is to allow the committee to decide. There’s a placeholder in the bill as he just referenced – so there will be a placeholder for progressivity, but it would be my intent to offer a couple of different versions of progressivity to allow the conversation to take place in the Senate Resources Committee,” McGuire said.
McGuire says the variable tax rate is the most important element of the bill since it must encourage development of resources that have already been identified. She says tax credits the state already has in place seem to be encouraging enough new exploration.
Finance Co-Chair Bert Stedman says the bill going to the Resources Committee next week will signal only a starting point. He says when it gets to his committee members will look at two high profile issues – the effects of progressivity on revenue and the state’s use of tax credits.
“Clearly if oil prices go north of $200, we could be faced with paying over a hundred percent of the capital expenditures in the oil basin. And that is a not a position the state of Alaska should be exposed to. So it is a balance between how we stimulate capital costs and how our tax structure is on the other end when there’s high oil prices,” Stedman said.
Stedman said the first goal of the committees is to identify the problems they expect to solve with a new tax structure. He cautioned against dumping solutions on the table before they are needed if members plan to finish work by the scheduled end of the session.