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Alaska Senate plans to unveil generic oil tax bill, at first

Posted: February 8, 2012 - 1:06am

JUNEAU — The Alaska Senate is planning to unveil a generic oil tax bill this week, leaving to the committee process the job of finding problems in the proposal and working out solutions.

Senate President Gary Stevens said Tuesday that senators didn’t want to set “false expectations” by putting something into a bill and then changing it later.

He said the measure, expected to be introduced later this week, will include the existing method for splitting profits between the state and oil companies at periods of high oil prices.

Some of the senators who last year refused to act on Gov. Sean Parnell’s tax cut bill — citing lack of information — this year have expressed openness to at least discussing the tax regime’s progressive surcharge.

Under the current tax structure, which features a 25 percent base tax rate, a progressive surcharge is triggered when a company’s production tax value hits $30 a barrel.

The idea, when the law passed in 2007, was that the state would help companies on the front end, with things like tax credits, and share profits with them when oil flowed and prices were high. But critics, including oil industry representatives, have maintained that the surcharge eats too deeply into profits and is a disincentive to greater investment.

Senators, including Bert Stedman, R-Sitka, and Joe Paskvan, D-Fairbanks, have been insistent that they will not plunk down solutions without first knowing what problems might exist with the current tax structure.

Stedman is a co-chairman of the Senate Finance Committee; Paskvan, co-chair of the Senate Resources Committee.

One of the tasks will be trying to find consensus in how best to address progressivity, and then looking at other aspects of the regime, Stedman said.

Some lawmakers have also expressed interest in visiting the issue of tax credits and Alaska’s system of taxing oil and gas production together.

Parnell has called for “meaningful tax reform” and said HB110, the version of his bill that passed the House last year, represents that. That bill appears to be a nonstarter in the Senate though Stevens and others say they share his goal of taking meaningful action and working to get more oil in the trans-Alaska pipeline.

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