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The House Finance Committee on Thursday unveiled a new version of an oil tax bill that looks more like what Gov. Frank Murkowski had in mind when he introduced it earlier in the special session.
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But even this new version is likely to change again very soon, the committee's co-chairman says.
This is the 12th version of the proposal to tax the Alaska profits of oil companies that the Legislature has seen this year, including the original bills Murkowski introduced in February.
The change would mean hundreds of millions more in state production taxes when the price of oil is high.
The tug of war between the Senate, House and governor's office over the tax rate and industry incentives resulted in no bill passing at the end of the regular legislative session. That prompted Murkowski to reintroduce the bill with his original 20 percent tax rate for the special session.
But the Senate took the governor's bill and passed a version with a tax rate of 22.5 percent. That tax rate would rise by 0.1 percent for every dollar per barrel of oil after the price of oil rises above $35 per barrel after costs - approximately $50 per barrel Alaska North Slope West Coast.
The version introduced Wednesday reduces the base tax rate to 20 percent and increases to $45 per barrel after costs the price at which the tax rate would rise. The tax rate would increase by 0.175 percent for every dollar per barrel increase.
The latest version would take in between $1 and $1.50 less per barrel in production taxes than the tax passed by the Senate at current prices, according to estimates by the state Department of Revenue.
The reduction of the tax rate to 20 percent mirrors Murkowski's tax rate, which he and the industry says is a balance between a massive increase in taxes and incentives for exploration.
But most lawmakers have viewed that rate as leaving too much of the oil wealth to the companies and have elected to raise the rate.
The latest version of the bill also gets rid of a provision some committee members had called a train wreck.
That gas revenue exclusion would have meant gas revenue would be taxed at a third of the rate of oil revenue.
Lawmakers had complained the exclusion would have resulted in a lower production tax rate for North Slope fields and new finds than the current tax system would charge.
The provision was later changed to taxing gas revenue at one-third the rate of oil for Cook Inlet gas, two-thirds for North Slope gas and one-half for new finds.
But in the latest version of the bill, the exclusion provision was abandoned. Chenault said representatives expressed too many concerns about it and felt it needed to come out.
Chenault said he planned to hear amendments to the bill Thursday afternoon and that he could move it from the committee by evening.
From there, it would go to the House floor.
The bill would be the biggest rewrite of oil and gas taxes in Alaska in decades. Murkowski plans to roll the provisions of the new tax into a gas contract he is asking lawmakers to review and ratify.
The proposed contract with BP PLC, ConocoPhillips and Exxon Mobil Corp. would lock in oil and gas tax and royalty rates and set the financial terms for recovering the North Slope's 35 trillion cubic feet of natural gas.
Murkowski says the contract will provide the tax certainty the companies say they need to invest in a North Slope gas pipeline to Canada or Chicago.