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Legislature back to work on oil taxes, two other pending bills Juneau delegation predicts difficulty reaching agreement

Posted: April 19, 2012 - 12:10am

A new Legislative session began Wednesday, with Gov. Sean Parnell introducing a new oil tax bill for the lawmakers to consider

Two other bills, a highly controversial in-state gas pipeline bill and a much less controversial sex trafficking bill were carried over from the regular legislative session that ended Monday.

The regular session debate deadlocked on oil taxes, with the House of Representatives aligned with Parnell in pushing big cuts, and the Senate resisting and offering smaller, more targeted cuts.

Parnell’s new bill would provide a reduction in income to the state of more than $1 billion in its first full year, with varying amounts at various prices and production levels in future years, according to Parnell’s Department of Revenue.

Interviews with members of the Juneau legislative delegation indicate Parnell may have some difficulty getting the new bill through the full Legislature as well.

Rep. Cathy Muñoz, R-Juneau, who supported Parnell’s oil tax cut in the last session, said her colleagues have only just begun to dig into the new bill. But she praised what she’d seen so far, calling it “encouraging”

“It looks like the governor has taken some of the better points of the Senate version” for inclusion in his new proposal, she said.

The Senate, in the last days of the just-ended session offered to slash taxes on new oil fields, but did so with little debate and gave the House little time to respond.

Muñoz said Parnell’s inclusion of that tax cut in his new proposal “is showing me that he’s trying to build bridges with the Senate.”

In addition to the new fields tax break, Parnell is also proposing a new 40 percent “gross revenue exclusion” for the state’s currently producing “legacy” fields, putting a cap on the maximum tax rate companies would pay and expanded well lease expenditure credits.

Rep. Beth Kerttula, D-Juneau, who has led House opposition to Parnell’s tax cuts, said she didn’t like what she saw in her first look at the new bill.

“This is just a more complicated way to give away the same amount of money,” she said.

While Parnell’s call for the special session left two bills alive, it requires introduction of a new oil tax bill that will then have to pass through both houses of the Legislature.

Kerttula said she’d continue to fight against Parnell’s proposals.

“We shouldn’t be reducing anything without having the proof there’s going to be more production because we need to pay for the schools, the roads, the hospitals, the teachers — Alaska needs to be a strong state,” she said.

While the Senate was still in session Wednesday, Juneau Democratic Sen. Dennis Egan said what he’d learned so far wasn’t good.

“To be honest, I haven’t looked at it, but people more knowledgeable than I have looked at it and we’ve had conversations. They’re not enthused about it,” Egan said.

Special sessions automatically run for up to 30 days, and Egan said it would likely take most of that time.

Some legislators may head home after initial meetings if they’re not on the Finance and Resources committees that will be doing most of the work on the oil tax bill and an in-state natural gas pipeline bill, he said.

Egan is on the Senate Finance Committee; Muñoz is on the House Resources Committee.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com

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