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House action delayed on gasoline tax break bill

Posted: Tuesday, May 07, 2002

The House delayed action Monday on a bill that would give tax breaks to builders of a proposed North Slope natural gas pipeline.

The bill was returned to the House Rules Committee, a move that generally means there are not enough votes for a bill to pass.

The bill's sponsor, Rep. Pete Kott, an Eagle River Republican, said he believes he had 21 votes to pass the measure Monday, but he wanted to address concerns about access to the pipeline for small producers if it's built.

Some lawmakers fear smaller companies competing with the major oil and gas companies might not be able to pipe their natural gas through the line.

Kott said he does not plan to change the bill to address concerns it gives away too much in tax breaks.

Rep. Jim Whitaker, a Fairbanks Republican, has argued the taxes should be deferred, but not forgiven entirely unless there is evidence that it is needed to make the project economically feasible.

Gov. Tony Knowles has proposed similar amendments to the measure.

The bill would provide a property tax exemption costing state and local governments about $600 million, according to state Department of Revenue estimates.

Kott said the bill is needed to spur construction of the pipeline.

The three big oil companies in Alaska - BP Exploration (Alaska) Inc., Phillips Alaska Inc. and Exxon Mobil Corp. - have said they don't think they can make enough money on the project as it stands to justify the risk.

Representatives said they spent $125 million and more than 1 million staff hours studying the feasibility of a natural gas pipeline and concluded it presented more risks than rewards.

They have said Kott's bill by itself would not make or break the project.

House Bill 519 was on the House calendar again today. Opponents may use a procedural move to stall a House vote until Wednesday. If it passes the House, the measure would still need to go through the Senate.



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