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Legislators, Gov. Hammond, Former Revenue Official
Seek End To Billions In Oil Tax Loopholes


January 12, 2005

Juneau, Alaska - Tuesday five Democratic legislators filed legislation to help Alaskans recover a fair share for their oil.  Former Governor Jay Hammond, who helped usher in North Slope development and recalls the promise that industry would share oil revenue fairly with the Alaskans, says: "Clearly that original promise has been broken and Alaska is being shortchanged."  Former Deputy Commissioner of Revenue Deb Vogt, who consulted on the Fair Share Bill, says "North Slope production activities have changed dramatically since the ELF was last revised, and it's shocking these laws haven't been updated." 

Because of increasing tax breaks under the ELF, or Economic Limit Factor, Alaska's Production Tax rate has fallen from 13.5% in 1993 to 7% today, and will fall below 4% by 2013.  Eleven of the most recent 14 fields to come on line pay none, or almost none, of the state's 15% production tax.  Kuparuk, North America's second largest oil field, only pays a 3% production tax.

The Fair Share bill seeks to provide Alaskans, who own the state's oil, with a fair share while providing strong incentives for companies to explore and produce on the North Slope.  The bill provides for a more equal share for the state at high prices, grants tax relief at low prices, and lets companies avoid production taxes if a company shows tax relief is needed to make production "economically feasible." 

According to Alaska Department of Revenue estimates, oil company profits have dwarfed the state's share for North Slope oil in recent years.  Last year corporate North Slope profits exceeded the state's oil share by over $1 billion.  At this year's average price of $41.05/barrel, oil company North Slope profits are expected to top $5 billion, and nearly double the state's share. 

The sponsors of this bill are Sen. Hollis French, and Reps. Les Gara, David Guttenberg, Beth Kerttula & Eric Croft.


A detailed discussion of the bill:

pdf The Alaska Fair Share Bill: The Case For Reforming Alaska's Oil Tax Laws


Source of News:

Alaska Democrats
Web Site



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