The debate over Alaska's oil tax structure is picking up speed in Juneau but some lawmakers are worried time will run out before the complicated financial issue can be sorted out.
The House ramped up work on a bill introduced by Gov. Sean Parnell that would revamp the current tax structure known as Alaska's Clear and Equitable Share or ACES in a way he believes will entice oil companies to invest more in Alaska and beef up North Slope oil production over the long term. The House Resources Committee kicked off the debate in earnest with hearings all week aimed at educating members on the issue as quickly as possible.
"Clearly these changes need to be made," House Resources Co-Chair Eric Feige told members on Monday, setting the tone for what is considered must-do legislation by House Republicans. "It's the objective of this committee to make sure this bill puts more oil in the pipe."
The governor's bill, House Bill 110, would reduce the tax rate paid by oil producers in a couple of ways, first by lowering the base rate from 25 percent to 15 percent on some fields and also by reconfiguring the controversial "progressivity" provisions that kick in as the price of oil rises. The concept is similar to a bill introduced by House leadership at the beginning of the session and GOP leaders have agreed to let the governor's bill be the vehicle for debate, although they promise changes will be made in some areas.
The Senate took up the tax debate with a hearing on oil tax credits and incentives, something lawmakers say are equally as important to the discussion as the tax structure itself.
Tax structure change could cost Alaska billions
And two Democratic lawmakers who have taken the lead on opposing changes to ACES -- Rep. Les Gara and Sen. Hollis French -- tried to shine a light on the lucrative tax breaks the state already provides the industry with a press conference and a letter to the governor urging him to do more to publicize the "excellent incentives currently available in Alaska" before cutting taxes on the companies. ...
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