(SitNews) Juneau, Alaska - The Alaska House Majority Coalition on Friday communicated a proposed compromise to the Alaska Senate Majority to address oil tax credit reform, which is the subject of the ongoing Second Special Session of the 30th Alaska State Legislature.

Alaska House Majority Coalition members are supporingt changes to House Bill 111 to end the practice of paying oil companies cash subsidies for certain tax credits. This is expected to save the State of Alaska an estimated $1.5 billion over the next ten years. As part of the compromise, other proposed changes to the current oil tax regime would be discussed during the interim with the hope of reaching compromise on a comprehensive reform bill during next year’s regular legislative session.

“We agree with our Senate colleagues that we should move forward on what we agree on, which is ending cash credits. Paying cash to the oil industry during a fiscal crisis is bad public policy,” said House Resources Committee Co-chair Rep. Geran Tarr (D-Anchorage), Chair of the House Bill 111 Conference Committee.

Tarr said, “The members of our Coalition continue to support broader oil tax reforms but in the spirit of compromise we can accept a simple reform of the cash credits and will push for a working group to work with our consultants to develop a new tax and incentive program.”

The House and Senate passed competing versions of HB 111 but were unable to reach compromise during the regular session. Governor Bill Walker added the bill to the agenda for the ongoing Second Special Session, which is scheduled to end on July 16th.

Both versions of the bill end cash subsidies for the oil industry but the House and Senate bills differ in how they deal with deductions that companies can use to cover a portion of their expenses and losses. Under the Senate version of the bill, the Senate Majority (Republicans) proposed reducing oil company tax payments to Alaskans by $1.45 billion over the next ten years, which largely takes away any budget savings from ending tax credits.  

“Fixing Alaska’s oil tax regime, including this unaffordable credit system, is vital to any long-term solutions to our growing fiscal challenges. I believe instituting a short-term fix to stop paying cash for credits is a reasonable alternative to the Senate version of HB 111, which would leave in place a huge future liability to the state of Alaska that we can’t afford,” said House Resources Committee Co-chair Rep. Andy Josephson (D-Anchorage), who sits on the HB 111 Conference Committee.

If the Alaska House Majority Coalition's deal presented to Alaska Senate leaders is acceptable, the HB 111 Conference Committee could meet in Anchorage next week to work out the details before lawmakers travel back to Juneau to formalize changes to the bill and vote on final passage. 

Editing by Mary Kauffman, SitNews

Source of News:

Alaska House Majority Coalition
www.akleg.gov
www.akhouse.org

 

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