Oil tax currently off the agenda

Lawmakers say they can expand session's scope with a vote

Posted: Thursday, May 11, 2006

Barely a day into a special session, Alaska legislators began spotting issues that could interfere with their work in Juneau for the next month.

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After addressing both chambers Wednesday morning, the governor left lawmakers scratching their heads and wondering if they would get another shot at revamping the state's oil-tax structure.

Murkowski spokeswoman Becky Hultberg said the special session agenda would not include the tax proposal, and the governor would address the issue during a news conference today.

In the final hour of the regular session Tuesday night, the Senate voted not to concur with the House's new version of the petroleum production tax, or PPT, thinking they could pick it up again later this month.

Gov. Frank Murkowski mentioned changing the tax structure in his Wednesday speech.

"We know after last night that we have to revisit PPT. And we will resolve that," he said.

But lawmakers are hearing something different.

"When the governor left the podium, I leaned over and asked him if PPT is under the call. He shook his head, and I said, 'It should be,'" said House Minority Leader Ethan Berkowitz, D-Anchorage.

The governor's proclamation officially calling the special session says the Alaska Legislature may consider a method that provides fiscal certainty to producers during their stay in the state.

Months ago, a trio of oil producers - ConocoPhillips, Exxon Mobil and BP - told the governor's negotiating team they wanted the state to nail down future oil and gas tax rates so they may determine if the pipeline project is economical.

The pipeline to deliver North Slope natural gas to markets in Canada and the Midwest is estimated to cost up to $25 billion.

"It seems to me that the call is written broadly enough that it would include discussion of the oil tax," Berkowitz said.

The Legislature has the ability to expand the call of the special session; it would require a two-thirds vote from each body.

Should the Alaska Legislature revisit the state's oil tax rates during its special session?Respond at JuneauBlogger.com/VOXBOX here...

House Majority Leader John Coghill, R-North Pole, said he would first take a wait-and-see approach to learn more about the governor's plans before rallying support to place the net-profits tax bill on the agenda.

But overriding the governor is not out of the question, he added.

"If it's not on the call, but if it fits within the language and if it's broad enough, we might just take it up," Coghill said.

If that is the case, the Legislature would not be able to pick up the bill where it was left. It would need to go through the committee process again. But Coghill said he suspects the House would use the same bill as its vehicle.

Lawmakers could only skim the 900 pages of information that were unloaded on them Wednesday.

The Democrats were quick to point out that, technically, what they were handed was not a true contract.

"It's not a contract until all the parties have signed it. And the parties have not signed it," Berkowitz said.

A note from the Alaska Department of Revenue said the state and the producers have agreed to 38 of 41 articles contained in the contract, with one of the outstanding articles being payments in lieu of production taxes.

Last month, Sen. Hollis French, D-Anchorage, filed for an injunction to get Murkowski to release his contract before his Wednesday deadline. A Juneau Superior Court judge ruled the governor should turn over any provisions of the contract agreed upon by the state and the producers.

On Tuesday, the senator received a note from the state attorney general's office that said no individual provisions were agreed upon, thus they could not release it.

"It is remarkable that yesterday there was no contract, yet today there is," he said.

French said he would wade through the newly released documents before deciding if he will take further legal action.

• Andrew Petty can be reached at andrew.petty@juneauempire.com.



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