Days after House and Senate Democrats rolled out an “alternative” proposal to Republican Gov. Sean Parnell’s oil production tax reform bill, it remains unclear whether the Democrats’ bills will get hearings in the committees to which they were referred Monday.
House Minority Leader Beth Kerttula, D-Juneau, prime sponsor of House Bill 111, and Sen. Berta Gardner, D-Anchorage, a cosponsor of its companion Senate Bill 49 and the only minority caucus senator on the Senate Special Committee on Trans-Alaska Pipeline System Throughput to which it has been referred, said Thursday they have not yet formally requested hearings for their bills in their first committees of reference.
“I’m going to ask,” said Kerttula, who returned to Juneau Thursday after more than two weeks out of town dealing with a family emergency.
For her part, Gardner said, “I’ve just been slammed with other stuff. But absolutely, we will ask for hearings.”
But whether the Republican legislators who co-chair the House Resources Committee, to which H.B. 111 has been referred, and the TAPS Throughput Committee will agree to take up the legislation during this 90-day session — one-third of which has already elapsed — is uncertain.
Rep. Dan Saddler, R-Eagle River, said he has not talked about the bill with his Resources co-chair, Rep. Eric Feige, R-Chickaloon.
“My personal inclination is that I would rather take up the governor’s bill as a vehicle,” said Saddler, noting the limited number of days left in the session. He explained, “I think the people of Alaska had a pretty fairly clear choice in approaches to the oil taxes in the election process of the fall. And a lot of folks’ position is fairly clear.”
Saddler added, “I think given the way elections went and the current structure of the House and Senate, the governor’s bill is going to be the vehicle for advancing the oil tax issue.”
Kerttula scoffed at that argument.
“After a gerrymandered state,” Kerttula said when asked about the outcome of last year’s elections, in which Republicans took a majority of Senate seats and expanded their majority in the House of Representatives. Of majority legislators, she added, “If they’re thinking that that gave them a mandate to do what the governor wants, I think they better think twice.”
On the Senate side, Sen. Peter Micciche, R-Soldotna, sounded more open to giving S.B. 50 a hearing in the TAPS Throughput Committee, which he co-chairs together with Sen. Mike Dunleavy, R-Wasilla.
“What I plan to do is meet with those that constructed the bill on both the House and the Senate side, and sit down and get their take on the details and their goals,” said Micciche. “And if it’s something that they feel needs a hearing on its own, I am certainly open to doing that. If they think can improve Senate Bill 21, I think we proved in our discussion in the TAPS Throughput Committee that we’re open to any ideas that make Senate Bill 21 a better product.
Micciche is not a fan of S.B. 21, Parnell’s bill to reform Alaska’s oil production tax system.
“If the bill were to come before us in its current form, I wouldn’t be supporting it,” Micciche said. “It needs some help in several different areas.”
Parnell’s proposal would strip the progressive element out of the oil production tax structure, leaving a 25 percent base tax rate in place. It would also eliminate or restructure certain tax credits and introduce a gross revenue exclusion on 20 percent of new oil from new areas of production.
Micciche said he believes new oil production is likelier to come out of legacy oilfields, and he suggested certain tax credits should act as a “reward” for companies when throughput increases.
Meanwhile, the Democratic proposal leans heavily on gross revenue exclusions for new oil — from new areas of production, as well as additional barrel production above what was produced in 2012 from existing oilfields — as incentives for companies to produce more in Alaska, while lowering the cap on the state’s total take to 55 percent and putting in an alternative minimum tax of 10 percent as a floor in case oil prices plunge.
But Gardner said she is “not expecting” S.B. 50 to get through the three committees to which it has been referred and come up for a vote before the full Senate this year.
“My expectations are that some parts of it will find their way, in one form or another, to anything that eventually gets to the Senate floor,” Gardner said. “And any part of it that gets there is likely to be an improvement over what’s already there. Will it be good enough for us to support Senate Bill 21? I’m not optimistic on that score.”
Gardner identified parts of the Democratic bill that she thinks majority legislators could support.
“If you don’t care whose name is on something, you can get a lot of stuff done,” said Gardner. “And the ideas there are good. They’re solid. We’re optimistic about some of the elements finding their way. I mean, the majority’s already talking about recognizing that we do want progressivity. … I think that progressivity has the biggest traction with them, and I know that there are some who do support retaining the credit system.”
But while some majority legislators have spoken in favor of progressivity and keeping the existing tax credits in place, Micciche himself is not one of them.
“I believe in a flat tax,” Micciche said, arguing that when oil prices go up, the state’s take will increase even if the proportion stays the same. “I think it’s fair for Alaskans.”
Saddler is not in favor of progressivity either.
“I think the governor has done a decent job in recognizing not just the current effects but the long-term effects of our existing oil tax structure,” said Saddler. “Reducing progressivity helps to make it more attractive — well, eliminating, I guess. Getting rid of the credits, most of the credits, stops the significant immediate outflow of revenue. And I think the GRE targets new production wisely.”
Neither Feige, Saddler’s Resources co-chair, nor Dunleavy, Micciche’s co-chair on the TAPS Throughput Committee, could be reached for comment Thursday.
• Contact reporter Mark D. Miller at 586-1821 or at mark.d.miller@juneauempire.com.





Comments (19)
Add commentNo time?
They have time to draft ridiculous, unconstitutional bills threatening to arrest federal officials enforcing federal gun laws, but they don't have time to consider credible alternatives to Parnell's $2 billion giveaway?
These clowns are a sad joke.
NO Democracy in Alaska
"given the way elections went and the current structure of the House and Senate"
means there is NO Democracy in Alaska for Alaskans. Now we have one view, one voice giving billions in tax credits to the oil companies
Alaska hands the redistricting process to a five person commission. 2 appointed by the Governor, 1 each by the House and Senate - and a 5th member added by the Alaska Supreme Court. 4 to 1 Republican means NO Democracy in Alaska
Parnell's Leer Jet
In Parnell's perfect world, the cruise ships will be free to dump at their leisure; the bulldozers will be able to dig a hole the size of the grand canyon in Bristol Bay; and the oil companies will not have to pay any taxes. That's not one Leer Jet; that's an even dozen; - like hitting the jackpot at vegas and all the bells line up on the display and it plays a little jingle.....upon delivering something of this magnitude, I would demand a brass band each day as I awoke to a perfect world.
Got money?
Alaska cannot cruise on the current course. The pipeline is running dry while the bills continue to rise and roll in. Let's not bankrupt this place like the Federal Gov't is doing to the rest of the country. You have to have income to pay bills.
"MINORITY".
Says it all.
Keep calling the people in power "clowns" and see what you get.
Production Before Reduction
Production Before Reduction
Well, Rep. Saddler, if you
Well, Rep. Saddler, if you think the "people of Alaska" are for this ridiculous bill that basically just gives our oil to the oil companies to make billions off of, while our basic infrastructure falls apart due to lack of funds, you are off your rocker. But, tell you what - let's VOTE on it. Give it to Alaskans to vote on, and we'll see what happens. If the majority wants it, I'll shut my mouth. Until then, expect a lot of opposition to Parnell's giveaway of our oil.
sefisher
As barry also said we win they lost get use to it
sefisher
As barry also said we win they lost get use to it
Islander - Considering the
Islander - Considering the closeness of many of the races the election was far from a mandate of any sort.
2014 election is just around the corner and will knock off a few.
“If the bill were to come
“If the bill were to come before us in its current form, I wouldn’t be supporting it,” Micciche said. “It needs some help in several different areas.” Way to not stick your neck out while still sounding objective Senator. Talk is cheap Mr Micciche. We`ll see what happens in the end..and it`s not that far away. You "won`t get it right" by excluding a committee referral to a well thought-out alternative vehicle, with supporting facts, thereby dis-allowing factual testimony and figures. That means so far you don`t have it right. Like I said, "talk" to the media must always be suspect for it`s later interpretation by the speaker. By saying now that you support a "flat tax", your only confirming your partisanship, as you know that progressivity is the heart of ACES and the net- profits based tax system we replaced the ELF with. Your demand then, that progressivity be removed (because you like a "flat tax") means you don`t think we should share in the high profits from the value of our oil, and neither does your caucus, as we all know progressivity is the main target of this whole push to making ANOTHER drastic change to our tax system. And an unfair one to boot. Regardless it will be more propaganda down the road, another tax change they will blame on us and beat us over the head with, along with all the past changes they hollered so loudly about. You`re pretty sly Mr Micciche, but your not that sly. It`s easy to predict you, as a committee chairman, who is supposed to SEEK an open process, will not allow the democratic alternative to see the light of day and vet itself. I don`t have to be Nostradamus to say that.You said as much to all Alaskans very plainly in this article. And Mr Micciche, claiming you have a "mandate", as Mr Huggins has asserted, based on an illegally gerrymandered redistricting, is as disingenuous a statement as I have heard come out of Juneau in years. Give their alternative bill a committee hearing Mr Micciche..Mr Huggins. For the amount of money we are talking about you should not shut off any sensible alternative in this vital discussion Mr Micciche. Or you are doing a DIS-service to Alaska. You are disenfranchising those Alaskans who want facts posed, good questions asked, and open and truthful answers, before we go giving away two billion dollars a year to these companies. We`re not seeing that out of this legislature, on this important issue. Mr Micciche is "inclined" to not allow an alternative bill to be heard and vetted. Yep,..sounds like an open and honest process to me...........(not)
It's "you're"
You're is the contraction of "you are" which I think you're wanting to use. Your shows possession of something, as in "is this your soda?"
If you're going to try and rant against our legislators, at least use proper grammar...Also, paragraphs are your friend. Don't be afraid of the enter key.
Production before reduction
The problem is the production is declining and there aren't any prospective wells coming on-line, exploration is dwindling as rapidly as the oil in the pipe is. So something has to change.
Ideally, I'd like to see the tax changes apply only to new wells, while the existing oil fields remain under the current tax structure. This would ensure Alaska is still receiving maximum benefit from ACES on the already producing wells, while at the same time adding incentive for companies to produce new wells.
I don't think the governor's bill is the best way to go about doing things, and hopefully some of the more level-headed Senators can make sure it doesn't go through without some amendments.
Easy, fdub
If the lease holders aren't developing their leases, terminate said leases and issue them to someone who will, preferably a small company. And if no one steps up, the State should form its own oil company to harvest Alaska oil.
I bet we could get a new oil company formed for far less than $2 billion.
if production is "dwindling"
why is the north slope expanding? The decline which began years ago as expected is now showing signs of slowing. If the decline in oil production is slowing, then the "dwindling" oil production our leaders preach about is already being dealt with outside of any tax reform. There is no legitimate reason to give the oil companies a handout. The only thing that will stop oil production is lack of oil. Taxes won't affect this in anyway and so far they aren't. Who doesn't want a tax cut? Free money? Where do I sign? what a crock...
And a side note, I am so glad we have a Good Samaritan assuming the role of "grammar police"... misplacing your and you're should be punishable by death!
@ Latitude, @poof
Actually, you and I are in complete agreement on Alaska forming its own company. If I were king of Alaska, I'd see to it that we had everything we need to harvest our own crude, refine it, and export it within the borders of the state. Everything would be done in house. We could hire locals in almost every region to work good paying jobs, taxes would become a thing of the past and the dividend would be huge!
Who wouldn't LOVE that?
And poof, I'm sorry but the misuse of your/you're, their/there/they're and to/too is just one of my pet peeves. And it is rampant in society today, as evidenced by this comment section and many others.
Throughput?
Meanwhile repubs are crying the sky is falling cause throughput in TAPS is declining. All the while that throughput is being slowed because tankers are returning with their oil to Valdez cause refineries on the West Coast are reducing their output and have plenty of oil on hand. The tankers return to Valdez and pump out into the storage tanks there. Does anyone else see a connect between this and TAPS throughput? People need to wake up and realize we are on the verge of getting screwed and it won't be pretty.
Akoil
I vote for a new state owned and run oil company named AKOIL, once up and running let us kick the oil companies out when their leases expire.
AK Fuel
We must have AK ownership of all phases to our natural resouces; from property to production to profit. Alaskans have the funds, the skill and the will.
This is the primary path to progress and the reliabilty to independance from the disaster that is happening around us; starting within our own legislative body.
We know what has to be done. We can't keep ordering room service, through outside companies; we have to get our a$$ in the kitchen and cook for ourselves. Home cooking is always best!
Did we not learn any lessons from the 1970's, 1980's, 1990's, to present! No excuse; get it done!