House Speaker asked to delay vote until the contract is released
May 07, 2006
The Committee Substitute is a combination of SB 305, as passed by the Senate, and the House Resources, HB 488, retaining provisions from both bills. The House Finance version retains the 20/20 credit rate in both the oil and gas tax rate and the investment credit rate. The Committee Substitute retains progressivity, which allows a higher tax rate at higher prices.
The bill also includes a provision to reduce the Cook Inlet oil tax rate to 5%.
House Finance Co-Chair Mike Chenault (R-Nikiski) said, "We are trying to ensure that Alaska is open to investment by both producers and explorers. We hope to see, with this proposed tax structure, more exploration. This is a step forward in Alaska's future and an opportunity to capture a higher return for our resources when prices are high." He continued, "The House Finance Committee has done its best to be fair with industry while representing the best interests of Alaska."
"The package that Finance has proposed is a bill that keeps the tax rate low enough to attract more investment to Alaska, yet captures Alaska's fair share. With progressivity, we protect Alaska's interests as prices increase. We've done our best to strike the delicate balance," said Representative Kevin Meyer (R-Anchorage).
Committee Substitute SB 305 now moves to the House floor for consideration.
On the heels of a Superior Court decision Friday requiring Gov. Frank Murkowski to release a controversial pipeline contract to the public and Legislature, two Alaska legislators have asked House Speaker John Harris to delay a vote on oil tax reform until the contract is released.
Sen. Hollis French and Rep. Les Gara (both D-Anchorage) have sent a letter to Harris urging him to postpone the historic vote on the Petroleum Profits Tax (PPT) until Legislators have an opportunity to see the long-disputed contract. French had filed the injunction that led to the court's decision.
"Legislators on both sides of the aisle have argued all along that the governor was illegally keeping the contract out of public view," French said. "Now that a superior court judge has affirmed our position, it would be irresponsible to vote on PPT without knowing what's in that contract."
"We can't make this historic vote with half the information," Gara said. He added some of the PPT proposals, including the governor's, would reduce oil revenues to the state by upwards of $1 billion as some have argued concessions are needed to seal the pipeline deal. In February, after agreeing to link oil taxes with a potential gas contract, the governor reduced his oil tax proposal by $1 billion.
"The governor has argued from the beginning that the pipeline deal is linked to PPT," Gara said. "We shouldn't play Blind Man's Bluff with Alaska's future."
The natural gas pipeline negotiated in secret by the Murkowski Administration and the three major oil producers has been a moving target since mid February, when Murkowski announced he'd completed a pipeline deal. Since then the administration has vacillated between various reasons to keep the contract under wraps. At times the governor and other administration officials have said the contract isn't actually complete, at other times they've said it would be too confusing or distracting for Legislators to consider the contract while working on PPT, and at other times administration officials have said releasing the contract would violate the confidentiality clause in the Stranded Gas Act. None of those arguments stood up in superior court.
Midnight Tuesday is the end of the Twenty-Fourth Legislature's regular session.
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