House resurrects oil, gas tax bill

Posted: Monday, April 19, 2010

JUNEAU - The House shook up what had appeared to be a low-key trudge toward adjournment Sunday, eventually approving a bill - after first defeating it - to change Alaska's system of taxing oil and gas production together.

Micahel Penn / Juneau Empire
Micahel Penn / Juneau Empire

It also passed a bill reducing the state head tax on cruise ship passengers, after extended recesses filled with members trying to sway others to their side, and a measure seen as a compromise with Gov. Sean Parnell over student scholarships.

The chambers went pin-drop silent when the oil and gas tax vote settled in - 19 in favor, 21 against. It brought the House to an abrupt halt and left a hefty slate of bills, including a nearly $3.1 billion omnibus spending plan, unsettled late Sunday afternoon on the scheduled last day of the session.

But the house came back into session and rescinded that vote and approved the bill late Sunday evening.

The most visible proponent of separating oil and gas taxes has been Sen. Bert Stedman, whose finance committee late in the day had bills important to some leading House members, including House Speaker Mike Chenault and Majority Leader Kyle Johansen. Both Chenault and Johansen were yes votes.

"It ain't over yet," Stedman, R-Sitka, told reporters before the House changed its vote.

Senior members of Parnell's administration were seen on the second floor, where the House is located, after the first vote, as were Stedman and his top aide.

The Senate Finance Committee dispatched with the bills it had left - including a nearly $400-million bond package for education and research projects that complements the omnibus - after convening around 5 p.m.

The question of whether the state needed to changes its system of taxing oil and gas together became a contentious topic this session, occupying considerable time and attention, and leaving lawmakers either adamantly in support, adamantly opposed - or so confused they were, in some cases, last-minute deciders.

Stedman and others argued that under the state's current tax scheme, there's a risk of a "dilution effect" on revenues when oil prices are high relative to gas.

They said the drag could cost the state up to $2 billion a year or more in revenue once gas starts flowing through a major line in a decade or so and that the state shouldn't effectively give away its resource.

But officials with Gov. Sean Parnell's administration were among those maintaining that change now is unnecessary, arguing that a change risks weakening the state's negotiating position and sending the wrong message to industry on the eve of an open season for a major gas line.

During floor debate Sunday afternoon, Hawker called the proposal an "insurance policy" that will help protect the state treasury. Rep. Harry Crawford, D-Anchorage, said: "I think that all we can do by passing this bill today is damage."

It wasn't all heavy lifting Sunday.

Lawmakers also agreed to let Alaska voters to decide whether to add six seats to the state Legislature. Bills to name a bridge and make the Alaskan Malamute the official state dog also appeared on the day's calendars.

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