Senate Committee Advances Gov. Parnell’s Bill Cutting Oil Taxes

A special Senate committee on oil production has advanced Gov. Sean Parnell’s bill to lower taxes on oil companies without any amendments. But that does not mean the committee is in total agreement with the bill.

“The Committee’s intent to pass the bill to the Senate Resources Committee in the original form for further processing is in no way an expression of support by Committee members for SB 21 in current form. In fact, most members have expressed concern for key concepts that would require revision prior to supporting the bill as it moves through the legislative process,” Peter Micciche, co-chair of the TAPS Throughput Committee and a Republican from Soldotna, said.

The committee included a number of recommendations for improving the governor’s plan in their letter of intent. In its current form, the bill would get rid of a mechanism that increases taxes on oil companies when profits are high. While the committee supports changing the current oil tax structure, they do want the legislature to see if there’s a way of keeping some element of progressivity in the system. They would also like to see incentives for Alaska hire included in the bill.

Four amendments to the bill were considered in Thursday’s hearing, all introduced by Berta Gardner of Anchorage – the lone Democrat on the committee. One aimed to put in place an alternative minimum tax that would put a 15 percent floor on oil companies’ tax rate. Each of the amendments failed four to one, on party line.

Since the beginning of the legislative session, Democrats have promised a rival plan to Gov. Parnell’s oil tax proposal but it has not yet been introduced.