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Controversial oil tax bill ends year stalled in Egan's committee

Senate Labor and Commerce Chair to send letter seeking additional justification for tax reduction

Posted: April 16, 2011 - 10:44pm

Gov. Sean Parnell’s top legislative priority, a bill providing big tax reductions for the oil industry, stalled for the year in the Senate Labor and Commerce Committee.

“It’s not dead, we’ll keep looking at it in the interim and maybe hold some interim hearings,” said Sen. Dennis Egan, D-Juneau, the committee’s chairman.

The committee held two hearings on the bill, House Bill 110, after it was referred there following passage in the House of Representatives.

The committee was unable to get answers to questions about oil industry employment in Alaska, and held no additional hearings on House Bill 110.

The main question: Why are the oil industry and the governor claiming Alaska’s ACES oil tax has devastated industry employment in the state, when Department of labor shows all record highs in oil and gas jobs since its adoption.

One conclusion the Labor and Commerce Committee considered was that the industry has stepped up maintenance of long-neglected pipelines and other infrastructure.

The committee also explored whether the industry has been laying off Alaska workers while bringing in non-residents to accomplish the work.

Many of the questions Egan and other committee members asked of the Parnell administration’s Department of Labor and Workforce Development were not adequately answered, Egan said.

Senate President Gary Stevens, R-Kodiak, said he supports Egan’s holding action on he oil tax bill until he gets more information.

“I don’t think he’s satisfied with the answers he’s received,” Stevens said. “I think he’s got more questions they think need to be answered.

Stevens said he hoped the letter would get those answers.

“This letter they are sending to the commissioner, I think, should be pretty complete, of those remaining issues in the whole area of labor that need to be answered,” he said.

A similar version of the oil tax reduction bill that was in the Senate was sidetracked when the House bill was passed and sent to the Senate. The Senate version, Senate Bill 49, had been in the Senate Resources Committee since it was introduced and showed no indication of garnering enough support to move from that committee.

If House Bill 110 moves from Egan’s committee, it will then go to the Senate Resources Committee.

• Contact reporter Pat Forgey at 586-4816 or at patrick.forgey@juneauempire.com.

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