SPECIAL BONUS EDITION!!!
The bill moves on

Free at last

Well, the powerful House Special Committee on Oil & Gas, of which I am a powerful member, passed out its version of the oil production tax bill about 6 p.m. on Sunday after 10 days of often mind-numbing testimony. I’ll be spending the next couple of days making sure I understand just what we did.

Yeah, I know. The civics textbooks say I shouldn’t have let a bill I didn’t fully understand leave the committee without kicking up a fuss. But Oil & Gas is just the first of three committees that will hear the bill in the House (another three are scheduled to do the same in the Senate) and we used up a third of the 30 days a special session can last. So we had to turn it loose.

As a result, I can’t even tell you if we improved the bill. Fortunately, a bunch of people are looking at what we did, so we’ll know soon enough whether we got anywhere during our 10-day death march.

What did we do?

We made a bunch of changes, that’s what. Some of those changes increased the amount of money the state would get, depending on what happens with oil prices and oil production and how much the companies claim in the way of costs and credits. Some of them decreased the amount.

Here are some things we did and didn’t do.

1. We didn’t change the tax rate. The current law has a 22.5 percent tax rate. The governor’s bill raises that to 25 percent. The HO&G version leaves the rate at 22.5.

2. We changed the way the tax goes up as oil prices get higher. It’s lower in some ways, but from $50 a barrel on up it applies to the gross value of the oil, rather than the value after costs are deducted. We’re told it takes in more money as prices get higher than either the current law or the governor’s bill.

3. For some reason, the current law allows the oil companies to deduct some costs they incurred during the five years before the tax was changed. These are the so-called TIE (Transitional Investment Expenditure) credits. The governor’s bill eliminates them. The HO&G allows them for three years.

4. The HO&G bill adds some language that would give a tax break to gas produced from fields around Nenana. It’s the same break Cook Inlet gas gets. But the actual language extends the tax break to everything but the North Slope. So if there’s a big commercial gas field discovered around, say, Eek, it gets the tax break. This is a bad idea, so I’m hoping this language gets fixed to apply just to the Nenana gas.

5. The governor’s bill gives the Department of Revenue the authority to get a lot of information about how the companies work. It’s way better than existing law on that front. The HO&G bill took away some the department’s ability to get that information.

Those are the main points so far. But there are a lot of places to tweak this legislation, and the tweaks all mean the state gets more money or less money. So it’s possible that other, more important, changes will occur. Or have already occurred and I just haven’t caught up to them yet.

And now for something completely different

The House passed a resolution that would set up a separate education committee. Right now, education is lumped in with health and social services, which means that the issues involving about two-thirds of the state budget pass through a single committee.

I supported the change. Some issues that affect education also affect social services. Some health issues affect education. And so on. But the truth is that we need more focus on both education and health/social services, and we can’t expect it out of the same seven people.

More later,