JUNEAU, Alaska (AP) — The fiscal impact of a Senate committee's revised oil tax plan will be similar to the impact of what Gov. Sean Parnell has proposed, or slightly less, according to an analysis released Wednesday.
The new fiscal notes for SB21 were released as the Senate Resources Committee advanced a rewrite of the bill, and the details of the notes were not discussed. Sen. Hollis French, D-Anchorage, complained the bill was being rushed through the committee, "and I don't feel confident of the work."
Senate Resources officially began hearings on the bill Feb. 11, though it had informational hearings surrounding the issue during the two weeks before that. The Senate Finance Committee is expected to take up SB21 as early as Thursday afternoon.
The Senate has taken the lead on oil taxes, a decision House Speaker Mike Chenault has chalked up to a matter of sharing the workload between the chambers and the best use of committee time.
The rewritten proposal kept some of the bones of Parnell's plan, but it would increase the base tax rate from the current 25 percent to 35 percent and provide a $5-per-barrel credit for oil produced.
It would increase from 20 percent to 30 percent the tax break for oil from new fields and new areas of legacy fields proposed by Parnell, known as the gross revenue exclusion. The committee's chair, Sen. Cathy Giessel, has said the proposal also would use that tax break as an incentive for companies in existing fields to try new technologies to access oil they otherwise wouldn't be able to produce.
"Using the governor's guiding principles, we strived to create an attractive investment climate by virtually flattening government take at a level that is competitive with other similar oil basins around the world," she said in a news release Wednesday, noting that work still needed to be done on the bill. "There were many issues with fiscal implications that arose during our discussions more of the purview" of Senate Finance, she said.
The fiscal analysis tied to the Senate Resources rewrite indicates it would cost the state $800 million to $900 million next fiscal year. The fiscal impact — a mix of the measure's effect on revenue and the operating budget — would drop to between $350 million and $550 million in 2015, hit $750 million to $950 million in 2017, and rise to an impact of $800 million to $1 billion in 2019.