Senators warn Alaska is "asleep at the switch," not competitive with oil tax structure

February 24, 2012|By Jason Lamb | Channel 2 News

JUNEAU, Alaska — An Alaska State Senate committee charged with revamping Alaska's oil and gas tax structure has started introducing amendments after days of hearings surrounding the plan to increase oil production on the North Slope by cutting taxes for oil companies.

There are 17 amendments in all. Sens. Bill Wielechowski and Hollis French (both D-Anchorage) announced nine of those amendments, all hoping to encourage oil company investment.

One proposal from Wielechowski and French would reduce taxes for oil companies that increase production from one year to the next; for each new barrel of oil produced, companies would get a $10 discount off their total production tax value.

The senators also tackle the issue of progressivity -- that is, the idea that oil companies are subject to higher state taxes on oil profits when the price of oil increases. Wielechowski and French propose to cut the highest oil tax rates -- levied at the highest oil prices -- from 75 percent down to 60 percent.

During a Senate Resources Committee meeting Friday, Sen. Lesil McGuire (R-Anchorage) also introduced a plan to put together an Oil and Gas Competitive Review Board. She said it would be a means to gather "institutional knowledge" about Alaska's competitive stance in the world oil and gas markets.

Speaking in support of the review board, Sen. Tom Wagoner (R-Kenai) said that if Alaska was as noncompetitive with attracting oil company investment as some say the state is, then "we're asleep at the switch."

Another amendment from French incorporates language in a House bill sponsored by four members of the House Minority, that would require oil companies to publicly report what they spent their money on in order to qualify for a tax credit, and the purpose of the expense.

The Senate Resources Committee says it will spend both today and tomorrow going over the concepts of each amendment, and not voting on them immediately.

The Senate proposal is an alternative to a different oil tax reduction bill, backed by Gov. Sean Parnell, that Democrats have slammed as a multi-billion-dollar tax giveaway to the oil companies.

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