Lawmakers question industry's input in Alaska oil tax 'regime change'
Patti Epler |
Mar 17, 2011
An Anchorage lawmaker wants state officials to tell him who they met with while they were crafting the controversial oil tax bill now under consideration by the Legislature. Rep. Mike Doogan asked Department of Revenue Commissioner Bryan Butcher on Thursday for a list of names of all the people he and other state officials consulted with in coming up with the bill. Doogan and other lawmakers have grown more and more frustrated with administration officials because they can't seem to address questions relating to the bill to the lawmakers' satisfaction. Some legislators had begun to suspect that the bill might have been drafted by oil company executives, rather than by staff for Gov. Sean Parnell. Rep. Les Gara sent out a newsletter to constituents this week saying as much. "Credible rumors (we'll work on substantiating them) are that the Governor's Office sat down with oil company representatives to craft his oil legislation. Not members of the public outside the industry. Just the companies that will enjoy the $2 billion the bill proposes to shave off the share Alaskans get for their oil revenue every year," he wrote. "Which leads you to ask, who's running this state? These are the same companies that, when asked, have refused to commit to produce a single new field, or single extra drop of oil, if we give them this huge dose of corporate welfare." DNR: Oil industry had 'lots of input' in tax revision billDoogan and Gara double-teamed Butcher and other revenue officials at Thursday's House Finance Committee hearing on House Bill 110. "While I've got you gentleman at the table I'm going to ask a question I've asked before: did you guys write this bill?" Doogan asked Butcher, who was sitting at the witness table along with Deputy Revenue Commissioner Bruce Tangeman and master auditor Lennie Dees. "Yes, we did," Butcher replied, adding that the bill was specifically written by the three of them and Joe Balash, now deputy commissioner of the Department of Natural Resources and a top Parnell aide. Butcher hastened to add that they "certainly had lots of input" from the industry, especially to find out what sort of "game changers" there might be in any proposed restructuring of the current tax regime, known as Alaska's Clear and Equitable Share, or ACES. "But ultimately, when we rolled the bill out in January they didn't see it one second before anyone else," Butcher said, adding that the oil industry has testified that it doesn't support some parts of the bill. Gara followed up by reiterating his uneasiness about what he sees as a lack of information about the measure and what it would do, especially when it comes to what it could cost the state treasury. He pointed out that Pat Galvin, the former revenue commissioner, seemed to know more about oil industry, taxes and credits than Butcher. Gara specifically asked which companies Butcher and the others worked with in writing the bill. Butcher ticked off most of those doing business on the North Slope -- ConocoPhillips, BP, Exxon Mobil, Armstrong, Pioneer -- "virtually every company that's operating up there we talked to," he said. Gara asked whether the companies had asked the administration to include what he characterized as the two major provisions of the bill -- the reduction in the progressivity provision and a change that would allow companies to average the price of oil over the entire year instead of basing the tax on a monthly average. The reduction in taxes is estimated to cost the state $2 billion a year and revenue officials recently said the change in accounting from monthly to annual oil price cost the state about $200 million a year. Butcher said the companies did not make specific requests and that "from the very beginning we had talked about doing something about progressivity." Butcher did not say how the switch from a monthly accounting to an annual accounting came into the discussion. Doogan decided to request a list of meetings involving oil company representatives and state officials relating to the tax proposal, including people who might have since left the administration. "I want to know who was talking about stuff and when they were talking about it," Doogan told Butcher.
by slackjaw | March 21, 2011 - 6:18am
Yep. Mikey and Lessy are running jobs and investment out of Alaska. Is that you you're congratulating them for? They're regular liberal Robin Hoods' stealing from the oil companies to find useless social programs that will suck and drain the wealth of this state. Rewrite ACES despite the Liberal whine. Get 'er done! Call it what you want, but when BIG, Mean, nasty oil has only drilled 3 wells in two years, kinda makes ya' wonder if there's a reason....
by jmacinak | March 19, 2011 - 3:28pm
Thank god for Mikey Doogan. Now we might find out where this extortion scam emanated from. It was certainly post-Palin by my reading. That means it was on Parnell`s watch. If you listened to the new Alyeska boss, it`s all OUR fault the pipeline is running low. He`s singing his owner`s tune by golly. Who owns Alyeska Pipeline folks?
by cordie | March 21, 2011 - 3:18pm
Exxon, BP and Conoco own the pipeline and pay the property taxes on it. Want to buy it from them?
by jmacinak | March 18, 2011 - 1:30pm
"The progressivity provision kicks in when oil prices climb above $30 a barrel and grows the higher the price becomes"........ The author is mistaken about when progressivity kicks in. It is ONLY after the producers PROFITS reach $30 dollars PER BARREL!... a huge difference that would greatly benefits the producers to the detriment of a fair share for Alaska as the owner of the resource, who leases with the expectation that if oil is found it will be produced. There are other things called "warehousing" and "harvesting" that have surreptitiously been going on for years by the conglomerate on Alaska`s north slope. In Alaska we call it a windfall profits tax. "Windfall" profits are those that were not "expected" under projections and estimates that created the tax base conditions that were agreed to. Alaska grants the best exploration credits a company could ask for and they are working. The windfall profits tax is to repay the state back a portion of the added risk it took with tax cuts and credits to the tune of a billion or so a year. This attack on ACES and the state`s fair share is an effort to extort that share of our vast resources we finally can count on, to better our failing educational system in Alaska, and to build the infrastructure, roads and bridges etc, that are going to be losing support in the current USA fiscal condition.
by khcook | March 18, 2011 - 11:45am
Happy to hear that Representatives Doogan and Gara are doing their job and looking after Alaskan interests and not those of the Oil Industry executives. It appears that we have not learned the history lessons of the very recent past that sent several of our oil industry owned politicians to jail. It appears that once again the industry executives have much to cozy a relationship with our Governor and unfortunately my representative (Mike Hawker). If the Governor's radical plan is passed, we true Alaskan conservatives will be paying higher property taxes and see the return of a State payroll tax! Ken
by donl | March 18, 2011 - 10:31am
This is a tremendous aide to the oil companies. I really admire our governor and his staff for setting the bar so high for other tea party Republican governors in the US. Power to the corporations!
by hughwade | March 18, 2011 - 8:19am
Way to go, Doogan and Gara. Way to represent! You're doing what needs to be done here, and I admire your work. Hugh Wade |













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