Governor Sean Parnell plans to introduce a new oil tax bill for state lawmakers to consider when they gavel into special session Wednesday afternoon. Parnell called a special session early this morning after lawmakers failed to pass an oil tax reform bill. He says he doesn’t know if lawmakers will be able to come to agreement, but the special session is worth a try.
“There’s a new dynamic now at work that I think might lead to a compromise that could produce new production both now and also in the future,” Parnell said.
In the final days of the session, the Senate passed a bill giving tax breaks to producers that develop new oil fields. The House killed the measure. Parnell says he likes the idea, but wants to include existing fields as well.
“So my concern there is that vast resources in our legacy fields will remain untapped. They’ll remain locked in the ground not being maximized for Alaskans,” he said.
Parnell says he wants to encourage companies to develop hard to reach oil in their existing fields that could add 100 thousand new barrels of oil a day to the pipeline in a few years. House Speaker Mike Chenault, a Republican from Kenai, says the House agrees with the Governor. He says it isn’t enough to fix just one piece of the pie.
“We’re here to continue working to try to craft a tax regime in this state that brings investment into the state in order to fill the pipeline. That’s our revenue stream. That’s our blood,” Chenault said.
But Senate leaders called the House’s original approach a “major giveaway” to the oil companies. Senate President Gary Stevens says his chamber did the heavy lifting on oil tax reform during the regular session, only to see that work fail.
“Now it’s time, if others don’t like our approach simply on new oil, then its time for someone else, either the Governor or the House to come forth with a bill and prove it. Show us how its good for the people of Alaska,” Stevens said.
Senators in the bipartisan working group expressed dismay that the house failed to pass their oil tax reform legislation. But Senator Johnny Ellis, a Democrat from Anchorage, says the special session may help foster an agreement.
“I think we’re eternal optimists. And we can deal with public policy in a fresh light going forward. I mean we are the same people and there’s the same big issues before us but there’s an opportunity to begin again and to put a renewed focus on the things the Governor is calling us to do,” Ellis said.
Besides oil tax reform, the special session will address a bill meant to further advance an in-state natural gas pipeline project and a bill to strengthen penalties for people convicted of sex trafficking.
In the final hours of the session, the legislature also passed a two-point-nine billion dollar capitol budget. Governor Parnell says he’s not likely to veto many community projects included in the bill. But Representative Mike Doogan, a Democrat from Anchorage, criticized his Republican colleagues for spending too much money.
“They just can’t seem to commit to saving any money for the future which is not going to be a good thing for us because sometime in the not too distant future everything that goes up must come down,” Doogan said.
Doogan proposed an amendment that failed that would have added two billion dollars of the state’s savings into the Permanent Fund.
Annie Feidt is the broadcast managing editor at Alaska Public Media. Reach her at afeidt@alaskapublic.org. Read more about Annie here.
