A Citizen’s Guide

ANCHORAGE—Gov. Sarah Palin spoke to a crowd of oil industry representatives, lawmakers and residents on Sunday, trying to convince them that her proposed new oil tax should replace the one passed under former Gov. Frank Murkowski’s administration last year.

About 250 people were at the Loussac Library to listen to Palin tout her version of an oil tax in advance of a special session on the issue that starts on Thursday.

“We’re manifesting what our commitment had been from the very beginning, to say ‘Our administration has got nothing to hide,’ ” Palin said.

The proposal, called Alaska’s Clear and Equitable Share, would put a 25 percent tax on oil companies’ net profits, or the value of the oil minus operating expenses and pipeline and tanker charges.

That puts more of a burden on oil companies, who are subject to the 22.5 percent Petroleum Profits Tax passed in 2006. The tax rate rises when oil prices are high.

The Palin administration makes sure to point out that the tax was passed during a time of corruption in the state Legislature.

Two VECO Corp. executives have pleaded guilty to bribing four legislators to get a version of the tax favored by North Slope oil producers through the Legislature. Former state Rep. Pete Kott has been convicted. Former Rep. Vic Kohring goes to trial in a week.

Officials with the Palin administration told the crowd they are trying to strike a careful balance: making sure Alaska gets a fair share of the oil’s value, while encouraging oil producers to invest in new fields.

Some new lawmakers were standing alongside citizens the meeting, wanting to learn more about the proposed tax.

“I couldn’t pass a test on it,” joked state Rep. Mike Doogan, D-Anchorage.

He said maybe a two-tiered tax system, with different structures for well-developed legacy fields and for higher risk ventures

State Rep. Anna Fairclough, R-Eagle River, wants to know how the tax proposal encourages development. Officials say that would be accomplished through improved credits for exploration.

Some in the Legislature are skeptical about the need for a special session. Senate President Lyda Green, R-Wasilla, has said any action can wait until a regular session next year.

But state Rep. Lindsey Holmes, D-Anchorage, didn’t agree, saying people do care about the circumstances under which the tax was passed.

“We need to go back and do it again,” she said.