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Action delayed on gas tax break bill

Posted: Tuesday, May 07, 2002

JUNEAU (AP) -- The House delayed action Monday on a bill that would give tax breaks to builders of a proposed North Slope natural gas pipeline.

The bill was returned to the House Rules Committee, a move that generally means there are not enough votes for a bill to pass.

The bill's sponsor, Rep. Pete Kott, R-Eagle River said he believes he had 21 votes to pass the measure Monday, but he wanted to address concerns about access to the pipeline for small producers if it's built.

Some lawmakers fear that smaller companies competing with the major oil and gas companies might not be able to pipe their natural gas through the line.

Kott said he does not plan to change the bill to address concerns that the bill gives away too much in tax breaks.

Rep. Jim Whitaker, R-Fairbanks, has argued that the taxes should be deferred, but not forgiven entirely unless there is evidence that is needed to make the project economically feasible.

The bill would provide a property tax exemption worth about $600 million to state and local governments, according to state Department of Revenue estimates.

Kott said the bill is needed to spur construction of the pipeline.

The three big oil companies in Alaska -- BP Exploration (Alaska) Inc., Phillips Alaska Inc. and Exxon Mobil Corp. -- have said they don't think they can make enough money on the project now to justify the risk.

They have said Kott's bill by itself would not make or break the project.

The bill is on the House calendar again Tuesday. Opponents may use a procedural move to stall a House vote on it until Wednesday. If it passes the House, the measure would still need to go through the Senate.

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The bill is House Bill 519.



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