Public Testimony on HB111 – Oil & Gas Tax Bill
House Resources Committee will take public testimony at 6 p.m. Wednesday, March 1, on HB 111, which would increase oil taxes again and make fundamental changes to SB 21.
Tell them the proposed bill goes too far and raises the basic oil tax rate to the detriment of investment in Alaska. While some adjustment to the tax credits may be appropriate, we must quit threatening our resource industries with increased taxes. We need to attract investment in Alaska, not chase it away.
Our oil industry already accounts for 67% of Alaska’s unrestricted General Fund revenues – and many in it are still struggling to survive. As Jeff Hastings, CEO and managing partner of SAE Exploration, testified last week: “Many of us are working at cost because of the low commodity price. …The only thing that’s important, that we don’t do, is create a tax environment that eliminates the ability for us to make sound decisions to invest in Alaska.”
POINTS to consider for your testimony:
- Alaska cannot increase oil production by increasing taxes. Alaska cannot tax away the industry’s incentive to invest and still expect to have a sustainable economy.
- While it is tempting to collect every dollar possible from the oil industry through increased taxation, doing so makes Alaska projects less competitive with those elsewhere and robs the companies of the investment capital they require to expand existing fields and discover new ones. In the long run, increasing taxes on the industry will do more harm to Alaska’s economy. Conversely, more investment means more production, more revenue for the state and more jobs for Alaskans.
- Alaska cannot control the price of oil, but it can control what kind of business climate we create here – one that encourages continued investment and more oil for TAPS.
- Oil tax reform in 2013 made Alaska more competitive and a more attractive place to invest. Oil companies have responded with over $5 billion in new projects. Alaska saw no production decline in 2014, a slight dip in 2015, followed by the first production uptick in 14 years in 2016.
- The new 2017 oil tax policy proposal, HB 111, represents the seventh major tax change in the last 12 years. Imposing significant tax increases and eliminating access to critical incentives will do nothing to increase production. It creates more harm to Alaska’s largest industry and the state’s economy as a whole.