Senate Acts to End Cash Oil Credits
JUNEAU – A final compromise reached today between the Senate and the House will end cash payments for oil and gas tax credits beginning July 1, 2017, a move expected to save the state $200 million through the end of this year and up to $200 million each year in the future.
House Bill 111, the reform measure ending the cash credit program, was the result of several weeks of negotiations. Senate Majority members supporting the legislation consider it in the best interest of Alaskans, balancing the state’s need to reduce cash exposure in challenging fiscal times with protecting a competitive oil tax regime that encourages investment and production. Oil production creates jobs, delivers tax revenue and deposits royalty proceeds into the Alaska Permanent Fund.
“The Senate initiated credit reform in 2015. Tonight’s action is the culmination of that work and sets the state on a responsible, sustainable course,” said Sen. Cathy Giessel, R-Anchorage, chair of the Senate Resources Committee. “Our Senate Majority’s highest priorities are the needs of Alaska’s families, protecting jobs and keeping Alaskan business thriving. We’re committed to maintaining a fair, competitive oil tax regime that secures these private-sector opportunities.”
“Today the Senate has prioritized critical services for Alaskans by ending our cash tax credit program,” Senate President Pete Kelly, R-Fairbanks, said. “We do not believe this cash payment reform will significantly curtail investment or endanger jobs.”
The Senate stands ready to continue work with the House on a capital budget that leverages more than $1 billion in federal funding and keeps Alaskans at work.