Post by Logan on Jun 8, 2016 1:32:32 GMT -6
The Alaska Legislature has approved a cut to oil and gas drilling subsidies that promises millions in savings but fails to close a loophole that led to an explosion in the amount the state owes oil companies.
House Bill 247 preserves a “net operating loss” tax credit intended for smaller oil producers who are developing a new oil field and losing money in the process. At low oil prices, however, the credit can be used by the North Slope giants that produce the bulk of Alaska’s oil, reducing their production tax rate to zero.
“That means that as we address other issues of fiscal stability, we are totally hamstrung because there will be no production tax,” said Rep. Paul Seaton, R-Homer and the creator of an alternative bill that eliminated the loophole.
Speaking on the floor, Seaton said the final version of the bill will cost the state $1.2 billion more than his alternate over the next decade at projected prices. If oil prices underperform those projections and average $40 per barrel, the difference will be as much as $4.2 billion, he said.
Read more: peninsulaclarion.com/news/state-government/2016-06-07/lawmakers-keep-net-operating-loss-credit
House Bill 247 preserves a “net operating loss” tax credit intended for smaller oil producers who are developing a new oil field and losing money in the process. At low oil prices, however, the credit can be used by the North Slope giants that produce the bulk of Alaska’s oil, reducing their production tax rate to zero.
“That means that as we address other issues of fiscal stability, we are totally hamstrung because there will be no production tax,” said Rep. Paul Seaton, R-Homer and the creator of an alternative bill that eliminated the loophole.
Speaking on the floor, Seaton said the final version of the bill will cost the state $1.2 billion more than his alternate over the next decade at projected prices. If oil prices underperform those projections and average $40 per barrel, the difference will be as much as $4.2 billion, he said.
Read more: peninsulaclarion.com/news/state-government/2016-06-07/lawmakers-keep-net-operating-loss-credit