The first version of an oil tax reform bill has stepped out of its first committee — Senate Resources — and will go next to the Senate Finance Committee. After nineteen hearings, getting input from oil companies, consultants and the Parnell administration, the committee proposed changing the state’s current tax structure – making concessions to the oil industry that were less than what the governor proposed last year.
Kenai Republican Tom Wagoner objected, saying the bill did not consider or meet the Senate Majority’s own goals.
The Senate Bipartisan Working Group issued a statement saying that we want three things: Increased oil production – these are three things out of this bill — increased oil production, more jobs for Alaskans, sustainable state revenue over the long term. I don’t think this bill does any of the above.
The new plan reduces the progressive tax rate that varies depending of the market price of oil, and it gives a bonus – or “allowance” — for taxes on oil from newly developed wells. For those concessions to the oil industry, the Senate plan would increase taxes at the bottom of the price spectrum to give a floor for the state to count on. It also separates – or “decouples” – oil and gas taxes, and it sets up a system for oil companies to share information that is already in the public domain.
Anchorage Democrat Hollis French said the bill makes major fiscal concessions to the oil industry – and he sees oil company opposition as only negotiating points.
The focus of this bill as it moves forward is going to be about new oil. Every single person in this room is completely united around the idea that we have to have more oil in the pipeline. There’s not a single person in this room today who thinks we should not have new oil in that pipeline. And I think in that idea, we can move forward.
The bill now goes to the Finance Committee where it will be heard after members return from the mid-session break they are taking to attend energy-related meetings in Washington D-C.