After months of fighting, House offers Senate a compromise on oil, gas tax credits

After five months of back and forth, the legislature may be close to compromising on changes to the state’s oil and gas tax credit system.

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Lawmakers in the House and Senate seem to agree that the state needs to overhaul a system that has it paying cash for tax credits to oil companies. It will owe nearly $700 million by the end of the year.

But a bill to change that system — House Bill 111 — has been tinkered with by both houses and neither has budged.

The House version of the bill was designed to cut oil tax credits, and force companies to pay a minimum tax. Critics called it a significant tax increase.

The Senate version of the bill scaled back that bill — refusing to substantively hike taxes on the oil industry.

And so far, the two bodies have been at an impasse.  Since June 22, the bill has been the only thing on the agenda for the current special session. But most lawmakers left town and there have been no public meetings on the legislation for the last two weeks.

Rep. Geran Tarr, D-Anchorage, said the House is proposing a compromise to the Senate.

“We’re proposing to eliminate the cash credits,” Tarr said. “That is what the governor, the Senate and the House all agree on. What we don’t agree on is what comes after that. What new incentive or deduction would be in place.”

In exchange for dropping a comprehensive reform this year, Tarr said the House wants a special committee to meet throughout the summer and fall and come back for the next legislative session with a compromise bill.

It’s not clear what the Senate will do with that proposal.

Lawmakers will have to come back to Juneau to hold a session on the bill, and that’s not likely to happen right away. Rena Miller, the Senate’s communications director, said they probably won’t be back until Wednesday at the earliest. That’s three days before the special session is scheduled to end.