After delays, oil and gas tax bill gets hearing

After weeks of delays, a bill to overhaul Alaska’s oil and gas taxes could advance quickly. The House Rules Committee held the first public hearing in more than three weeks on the legislation Tuesday.

Rep. Craig Johnson (R-Anchorage) is the House Rules Committee chairman. (Photo by Andrew Kitchenman/KTOO/APRN)
Rep. Craig Johnson (R-Anchorage) is the House Rules Committee chairman. (Photo by Andrew Kitchenman/KTOO/APRN)

The committee’s version of the bill, House Bill 247, would phase out refundable tax credits over the next three years.

Chairman Craig Johnson, R-Anchorage, said the bill draws on input from industry, as well as lawmakers from both parties.

“We’d like to continue incentivizing companies,” Johnson said. “The question is: ‘What can we afford?’ And I don’t know that we can afford to continue writing checks to oil companies in this environment.”

The bill initially doesn’t go as far as Gov. Bill Walker’s proposal to reduce subsidies. But once the reductions are fully phased in, they would be similar in size to Walker’s.

Rep. Chris Tuck, D-Anchorage, said the new version doesn’t cut subsidies quickly enough.

“It’s just hard to say, ‘OK, Alaskans, it’s time for you to cut your Permanent Fund dividend in half, so the oil industry can benefit from that,’ because basically, that’s what we’re doing. We’re asking Alaskans to pull out of their pocket and subsidize the largest industry in the world,” Tuck said.

Tuck said reducing the tax subsidies more quickly is important to closing the state’s budget deficit.

But Johnson said the new version of the bill is fair to companies that have made their plans around the current tax system.

“We still give everyone an opportunity to succeed,” Johnson said. “We give them time to get partners. We give them time to readjust their business plans. But I think mainly we generate revenue for the state and we basically … stop the hemorrhaging. We quit writing checks to oil companies.”

The Rules Committee will take public testimony on the bill Wednesday. Johnson said he wants to finish work on the bill – including amendments – tomorrow as well.

Andrew Kitchenman

State Government Reporter, Alaska Public Media & KTOO

State government plays an outsized role in the life of Alaskans. As the state continues to go through the painful process of deciding what its priorities are, I bring Alaskans to the scene of a government in transition.

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