Bill Hurting Alaska’s Oil and Gas Industry Moves to House Finance
Republican Members of House Resources Vote in Opposition
Tuesday, March 14, 2017, Juneau, Alaska – An oil and gas tax bill that would negatively impact Alaska’s largest industry is unfortunately one step closer to becoming law. The House Resources Committee Democratic Co-Chairs proposed HB111. An updated version of the bill passed through the committee today by a slim 5 to 4 vote.
“The irony here is it hasn’t even been a week since celebrating the great news about Horseshoe, the state’s largest oil discovery in decades, and yet here we are watching a bill move forward that would change our current tax structure,” said Representative David Talerico (R-Healy). “Production is up in the pipeline. We want to keep that forward momentum.”
HB111 increases oil and gas taxes which decreases the appeal for investors. Nearly 5 weeks of meetings on this bill, including hours of public and invited testimony, have exposed concerns with the structure of HB111.
Representative George Rauscher proposed amendments allowing producers the ability to recover their investment just like other businesses are currently capable of doing through tax writes offs. “That’s good business. Why are we holding the oil and gas industry to a double standard?” said Rep. Rauscher. “There’s a lot places in the world to get oil and we are not making Alaska an attractive option.”
“This is straight up wrong,” is what Chris Birch (R-Anchorage) said during today’s meeting. “We need to be providing tax stability in an environment that is increasingly competitive and renew our focus on oil production through TAPS and our corresponding royalty revenue.”
Representative DeLena Johnson (R-Palmer) said, “I could not support a bill with so many unknowns. It was acknowledged that there might well be unintended consequences plus the indeterminate costs of the added requirement of DNR pre-approving lease expenditures.”
The bill now moves onto House Finance for consideration.