On Friday, the Senate Finance Committee continued to put the finishing touches on Governor Sean Parnell’s oil tax reform bill or SB21 as it is known in the legislature.
"There is a dark cloud moving from the Senate Finance Committee to the floor of the Senate," said Minority Leader Johnny Ellis, D-Anchorage.
Ellis said Democrats will spend the weekend making several amendments to the bill. It was scheduled for a floor vote Friday, however that vote was postponed until next week.
"I look at this as being the right thing for the state of Alaska, and our future,” said Finance Co-Chairman Senator Kevin Meyer, R-Anchorage. “The Democrats would probably tell you to do nothing is more beneficial to the state and I would totally disagree with that.”
The bill faces another round of amendments after it was already amended in the Senate Resources Committee and in the Senate Finance earlier this week.
The proposals finalized Thursday evening, include lowering the base tax rate from 35 percent to 33 percent effective in 2017 and a proposal for a $5-per-barrel allowance for oil produced and a 20 percent tax break for new oil. The amended bill removes a 10-year expiration date on the tax break.
"What you could see is that they're going to produce real quickly to stay in that 10 year window, and then not produce anymore, because now they lost that GRE, (Gross Revenue Exclusion)" said Sen. Meyer.
Democrats said they've been shut out of the decision making process by not having access to the governor's oil tax consultants. They’re asking oil companies to open their books in order to prove that the current system is not helping them be competitive on the worldwide market.
"My hope is on Monday or Tuesday, or Wednesday, or whenever the bill comes up, vote it down, and then let’s start all over again,” said Senator Bill Wielechowski, D-Anchorage. “Let's start all over again getting information that we need.”
Ellis, Wielechowski and Senators Berta Gardner and Hollis French, all Democrats, signed a letter addressed to Governor Parnell asking for an audit of capital expenditure credits on the North Slope.
Parnell’s oil tax plan calls for those credits to be discontinued under his plan.
Deputy Commissioner of Revenue Bruce Tangeman said his staff hasn’t been able to conduct audits for the time period between 2008 and 2012, because the department has to comply with 70 new regulations put in under Alaska’s Clear and Equitable Share (ACES), which is the current tax structure oil companies must follow in Alaska.
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