The House Special Committee on Oil and Gas will begin hearings on Gov. Sarah Palin's proposal to review and rewrite the Petroleum Production Tax, the subject of a special session of the legislature scheduled to begin Thursday.
Thursday, Rep. Kurt Olson, R-Kenai, released a plan for those hearings, saying the committee that he chairs would start hearings on Friday to hear the Palin's bill meant to replace the PPT.
"We will hold hearings daily until a bill moves from the committee," he said in a press release. "Once the administration has presented the bill, we will ask the stakeholders in Alaska's oil and gas industry to speak to the proposed changes. We will then listen to the consultants retained by the Legislature for their take on these hearings. The final step prior to action by the committee will be public testimony."
Palin's proposal, called Alaska's Clear and Equitable Share, or ACES, was developed after a Department of Revenue review of the performance of the PPT showed revenues from the Murkowski administration's revamp of the state's oil and gas taxing regime will fall hundreds of millions of dollars short of expectations.
That, and what the administration called the "cloud of unethical and illegal activities" surrounding passage of the PPT, led the governor to order the upcoming special session to look at possible changes to ensure Alaska would "get its fair share" out of the resources being pumped out of the ground.
As written, ACES would include a gross tax-based safety net for revenues when prices dip, or costs rise, while maintaining the full benefit of a net profits-based system to provide a greater share of revenues to the state while spurring new development, the administration said.
Whether the special session will go so far as to replace the PPT with some form of ACES, or make such moves during the regular session starting in January remains to be seen.
What ever is decided could impact Alaska's long-term future, Olson said.
"We need to give these revisions serious consideration, whatever direction the Legislature takes," he said. "Alaska must get its fair share while not strangling our economy."
The special committee will hold its hearings in Juneau.
Meanwhile, Palin's oil and gas tax team is hosting a series of community briefings on the ACES plan, including one scheduled for Monday, Oct. 15, at the Challenger Learning Center in Kenai beginning at 6 p.m.
Hal Spence can be reached at email@example.com.
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