A Citizen’s Guide

The Senate special committee reviewing the oil tax bill this morning removed the House mechanism that would have linked the tax rate to investment per unit of production and replaced it with a flat 22.5 percent tax rate.

In a move that acknowledged both the work in the House and the importance of creating a bill that lawmakers will vote for, committee members left unchanged the rate of progressivity passed in the House. The rate is 0.25 percent.

The committee is also considering an amendment introduced by Sen. Tom Wagoner, R-Kenai, with help from Pedro van Meurs, the governor’s lead oil and gas adviser. The amendment would block companies from deducting or receiving credits for a certain basic amount of capital investments.

The change would work sort of like a deductible in a health insurance policy. Companies would pay the first 30 cents per barrel of oil for capital expenditures and the state would allow deductions and credits on the rest.

Van Meurs said the amendment would protect the state from paying for costs like those associated with the shutdown and repairs at Prudhoe Bay.

The change would ensure that the state would not give credits for the types of replacements Alaskans are concerned about, he said.

Sen. Gene Therriault, R-North Pole, said Tuesday he also had an amendment meant to protect the state from subsidizing expenses associated with the shutdown and other incidents.

The committee is breaking for lunch but still has a list of amendments to consider.

Rep. David Guttenberg, D-Fairbanks, said he thought that many of the amendments, including those relating to a tax floor, deductions for political contributions, and others, were aimed at making the bill acceptable to both the Senate and the House.

“They’re kind of doing conference committee work all by themselves,” he said.