A Citizen’s Guide

JUNEAU—The Alaska Legislature on Friday approved a bill that imposes a 25 percent tax on the net profits of oil companies operating in the state.

The bill raises the current tax from 22.5 percent to 25 percent and is expected to bring in an additional $1.5 billion annually to the state treasury.

The Senate passed the bill on 14-5 on a reconsideration vote Friday, and sent it to the House. However, the Senate adjourned, meaning the House had to accept its changes or risk coming back for a second special session. Gov. Sarah Palin vowed to called lawmakers back immediately if they didn’t send her a bill before the session ended Friday.

The House approved it on a 26-13 vote.

Oil companies lobbied hard against the bill, warning that any higher taxes would hinder future exploration in the state.

House and Senate Democrats hailed the bill as a chance for the state to claim a share of its mineral wealth.

“This is the time where the state takes back its sovereignty,” said Rep. Les Gara, D-Anchorage. “This is the time where we say we get our fair share. This bill does all of those things, and does nothing to chill investment.”

Palin called the special session to consider the tax increase. She said the current tax was passed last year under a cloud of suspicion. Four members of that body have been convicted or indicted on federal bribery charges, three of them related to the bill.

Palin also said the 2006 tax did not perform as advertised. Her administration said there was an $800 million shortfall in expectations.