Senators want House to take lead on oil taxes

Reps. Neal Foster, Eric Feige and Paul Seaton listen to testimony before the House Resources Committee and House Special Committee on Energy on Tuesday, April 24, 2012, in Juneau, Alaska. Testimony was on the governor's oil tax bill. (AP Photo/Becky Bohrer)

JUNEAU — Alaska senators seem willing to let the House take the lead on oil taxes during the special session.


Senate President Gary Stevens said Tuesday that the Senate did the heavy lifting on the issue during the regular session. The Senate spent two months exploring the topic but an overhaul of Alaska’s tax structure stalled in the Senate’s bipartisan majority.

Senators instead took a provision for new-field oil production from that bill and tacked it onto a House bill during the last weekend of the regular session. The House shot that plan down, with Speaker Mike Chenault saying there wasn’t enough time to vet it.

Stevens, R-Kodiak, said he wants to see whether the House can come up with a better idea. The special session is scheduled to last 30 days; Tuesday marked the seventh day, and oil taxes are one of two remaining issues on the call.

Gov. Sean Parnell proposed a bill that borrows from the proposal that passed the Senate, providing a tax break, or “production allowance,” for the first 10 years of production from new fields on the North Slope.

It also cuts taxes for existing producers and allows tax incentives for well-lease expenditures, provisions more in line with his tax-cut bill, HB110, which passed the House last year but stalled in the Senate.

The House and Senate Resources committees have been holding hearings on Parnell’s plan, but it appears to face long odds and Senate Resources, at least currently, doesn’t plan to do a rewrite of its own, co-chair Joe Paskvan said.

Paskvan, D-Fairbanks, said it’s appropriate to see what the House thinks and then see if there’s a potential for compatibility in the House and Senate positions. Paskvan said the Senate’s work shows its focus has been on new oil and he said he doesn’t think he’s seen any evidence to support the need for tax cuts for existing fields — for work that’s economic for oil companies now.

Sen. Bill Wielechowski, D-Anchorage, said it was a waste of time for Parnell to present a “warmed-over” version of HB110, a bill the Senate had previously rejected. He said he sees the measure passed by the Senate, dealing with new-field oil, as a compromise, though Parnell has said he’s looking for a more comprehensive approach.

Paskvan said that Parnell’s plan, as is, couldn’t pass the Senate. And Sen. Tom Wagoner, co-chair of the Senate Resources Committee, said he doesn’t think lawmakers will “even get close” to finding common ground on the issue by the end of 30 days.

However, the committee plans to continue hearings, which Stevens said will better prepare senators for whatever the House comes up with. He said he takes the special session call seriously and hopes that a solution can be found. Paskvan said the committee also is seeking to have the administration’s consultants testify.

House Resources, which is holding hearings in conjunction with members of the House Special Committee on Energy, plans to hear from industry officials Wednesday.

On Tuesday, deputy Revenue commissioner Bruce Tangeman was asked how the administration arrived at the tax-cut levels it proposes, and Rep. Bob Herron, D-Bethel, asked what the department considers fair.

Tangeman said the definition of fair boils down to what will bring more investment to the state to increase now-flagging oil production. He said that in dealing with existing fields, the goal was to build on the work done last year, with HB110, and to not stray too far from it, seeing it as a good place to start since it had garnered support from industry.


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