Senate panel cuts oil production tax rate from 35% to 17%

The Senate Finance Committee cut Alaska's oil and gas production tax rate from 35 percent to 17 percent Thursday, adopting a new version of Senate Bill 227.

The substitute bill strips out the gross value reduction, per-barrel credits, and sliding scale provisions. It caps the carryforward allowance at 40 percent of annual production tax liability.

Committee staff Liz Harpold walked members through the changes. The new version, labeled O, focuses solely on oil and gas production tax. It cuts the tax rate, removes the gross value reduction and per-barrel credits, eliminates the sliding scale, and limits how much companies can carry forward.

Senator Bert Stedman moved to adopt the substitute. He objected to hear the explanation, then withdrew his objection. The committee adopted the substitute without further objection.

Chair Lyman Hoffman said the committee will take up the bill again Monday, May 18, at 9:00 a.m. Oil and gas industry representatives are invited to testify.

The committee adjourned. Its next meeting is scheduled for 1:30 that afternoon.