Legislature(2025 - 2026)BUTROVICH 205
04/04/2025 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB128 | |
| SB112 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 128 | TELECONFERENCED | |
| += | SB 112 | TELECONFERENCED | |
SB 112-OIL & GAS PRODUCTION TAX
3:54:25 PM
CHAIR GIESSEL announced the consideration of SENATE BILL NO. 112
"An Act relating to credits against the oil and gas production
tax; and providing for an effective date."
[On March 12, 2025 the committee adopted CSSB 112, workorder 34-
LS0566\I as the working document.]
3:55:10 PM
HUNTER LOTTSFELDT, Staff, Senator Bill Wielechowski, Alaska
State Legislature, Juneau, Alaska, paraphrased the sectional
analysis for SB 112, version I:
Senate Bill 112
Oil & Gas Production Tax
Sectional Analysis for Version I
Section 1. Amends AS 43.55.024(i): Adds language to
conform to the new subsection (k) under section 3
limiting the application of the $5 per-barrel
credit for new fields receiving a gross value
reduction.
Section 2. Amends AS 43.55.024(j): Adds both
conforming language for subsection (k) under
section 3 and reduces the per-barrel credit
slider from an $8 to $1 slider to a $5 to $1
slider.
Section 3. Adds a new subsection (k) to AS 43.55.024:
This new subsection will tie the amount of per-
barrel credits a producer may claim to the amount
of qualified capital expenses that producer
incurs on their property or leases. Limits a
producer's ability to carry forward unused per-
barrel credits.
Section 4. Adds an applicability section: This Act
applies to credits from oil production on or
after January 1, 2025.
Section 5. Adds a new uncodified law section: This
section addresses the transition of tax payments
under this Act.
Section 6. Adds a new section of uncodified law: This
section addresses the Department of Revenues
ability to make regulations retroactive.
Section 7. Adds a new section of uncodified law: Sets
a retroactive date of January 1, 2025.
Section 8. Sets an immediate effective date.
3:57:34 PM
CHAIR GIESSEL stated that CSSB 112, workorder 34-LS0566\I was
before the committee.
3:58:16 PM
CHAIR GIESSEL opened public testimony on SB 112.
3:58:52 PM
TIM HINTERBERGER, representing self, Anchorage, Alaska,
testified in support of SB 112. He recalled Senate Bill 21
(2013), which assumed oil prices of above $90/barrel with a ten-
year average forecast of $106/barrel. He stated that those
assumptions have proved inaccurate and offered examples to
illustrate this. He said SB 112 would generate $191 million for
fiscal year (FY) [2026] and approximately $100 million annually
over the next decade. He noted that the administration supports
SB 112. He encouraged members to move SB 112 from committee and
allow the State of Alaska to use its limited revenues on funding
education rather than giving money away to major oil
corporations.
4:00:46 PM
LUANN MCVEY, representing self, Douglas, Alaska, testified in
support of SB 112. She said she is a retired teacher with
several grandchildren under age 5. She expressed an
understanding of how funding deficits impact teachers, children,
and families. She expressed frustration that the State of Alaska
gives money away in tax credits and does not adequately fund
education. She stated that this effectively starves schools and
added that if the state maintains current education funding
levels, schools will experience a large budget deficit. If SB
112 passes, the state savings of $191 million for FY 2026 would
have a sizable positive impact on schools. She offered examples
of possible positive changes. She encouraged support of SB 112.
4:02:33 PM
EMILY KANE, representing self, Juneau, Alaska, testified in
support of SB 112. She said the restructuring of the oil and gas
taxation credit system is long overdue. She said the state has
lost billions of dollars under the current structure and SB 112
is a reasonable adjustment. She emphasized the importance of
taking care of people, who are the most precious resource. She
encouraged keeping Alaska's natural resource revenue in-state.
This would positively impact education funding, transportation
funding, and would allow Alaska to modernize. She encouraged
support of SB 112.
4:04:10 PM
TERRANCE DALTON, representing self, Anchorage, Alaska, testified
in opposition to SB 112. He said he has worked in the oil and
gas industry and has children. He stated that SB 112 appears to
be a short-term budget solution; however, it would be
detrimental in the long-term. He offered examples to illustrate
this, including a decrease in investment and jobs. He emphasized
the negative impact this would have on Alaskan families and on
the state. He said that the current tax structure provides
stability and encourages investment and offered examples.
4:06:03 PM
KELLY DROOP, representing self, Anchorage, Alaska, testified in
opposition to SB 112. She briefly discussed the importance of
Alaska's natural resource industry. She referenced Senate Bill
21 (2013) and briefly discussed the positive impact of that
legislation. She said that critics do not take external factors
into account. She opined that changing the terms after companies
have made investment decisions creates a sense of instability.
She indicated that stability is needed for companies to invest
in, maintain, and grow oil production in Alaska.
4:07:59 PM
JIM HILL, representing self, Anchorage, Alaska, testified in
opposition to SB 112. He said he has a small business with 20
employees. He shared his belief that all companies rely on a
robust oil and gas sector. North Slope development has benefited
his business. He credited North Slope development to Senate Bill
21 (2013) and the stability of the current tax structure. He
said tax policy should not target a single industry,
particularly when other industries are lagging. He said SB 112
discourages future investment. He stated the current tax policy
is working and emphasized the economic and social importance of
increased production.
4:09:42 PM
AURORA ROTH, representing self, Anchorage, Alaska, testified in
support of SB 112. She said oil prices have rarely exceeded
$80/barrel since 2013. She said oil companies are receiving the
maximum credit possible. She opined that this is a very good
deal for oil companies. She further opined that it is reasonable
- particularly in the face of a budget crisis and school
closures - to lower the tax credit cap to reflect the current
economic reality. She shared her understanding that companies
would remain profitable with a lower tax credit cap. She
rejected the idea that any tax on oil and gas (or reducing the
tax credit for oil companies) would be the downfall of Alaska.
She shared her understanding that SB 112 would restructure the
tax credit to benefit Alaskans in a time of economic difficulty.
She urged support of SB 112.
4:11:38 PM
GARY DIXSON, representative, Keep Alaska Competitive, Anchorage,
Alaska, testified in opposition to SB 112. He said he is the
Secretary-Treasurer of Teamsters Local 959. He gave a brief
overview of that organization. He stated that industry jobs are
not limited to the work done on the North Slope. He explained
how supplies are transported from the Lower 48 to Alaska through
the Port of Anchorage and on to Deadhorse. He emphasized that
many Alaskans benefit from the oil and gas industry, which is a
cornerstone of the state's economy. He offered examples to
illustrate the various benefits. He said consistency is needed
to ensure future development. He stated that SB 112 creates a
risk for the future of the oil and gas industry and the jobs it
provides. He reiterated that North Slope development is
important to economic growth in Alaska.
4:14:09 PM
RACHAEL POSEY, representing self, Anchorage, Alaska, testified
in support of SB 112. She said SB 112 reduces the tax credit,
which she opined is a reasonable and prudent decision
considering the state's current fiscal crisis. She emphasized
the importance of a strong education system. She said reducing
the tax credit for oil companies would provide additional
revenues that could fund education.
4:15:11 PM
JESSE CARLSTROM, representing self, Anchorage, Alaska, testified
in opposition to SB 112. He referenced Senate Bill 21 (2013) and
emphasized the importance of the per barrel tax credit. He
stated that companies made long-term, multibillion dollar
investments in the state based on the stability of that policy.
While oil prices and production levels are beyond the
legislature's control, it does control policy. He opined that
changing the rules after companies have invested sends the
message that Alaska is unstable and unreliable. He said this
impacts all Alaskans. He shared that he has two young children
and would like the economy to support opportunities for them in
the future. He encouraged a no vote on SB 112.
4:16:56 PM
CAROLINE STORM, Executive Director, Coalition for Education
Equity, Anchorage, Alaska, testified in support of SB 112. She
said the state is in a fiscal crisis. She recalled that Senate
Bill 21 (2013) originally contained a $5/barrel tax credit, and
the $8/barrel tax credit was a last-minute addition. She opined
that oil companies are making an absurd profit in Alaska and can
afford to receive a lower tax credit. In contrast, the State of
Alaska needs revenue to support schools, Medicaid, and Alaskans
in general. She stated that industry would not make Alaska more
livable - schools, roads, and government services will. The
State of Alaska must find adequate funding for these. She said
SB 112 is the mechanism by which the state can provide programs
and fulfill its constitutional obligations. She read from art.
VIII, sec. 2 of the Constitution of the State of Alaska, which
states, "The legislature shall provide for the utilization,
development, and conservation of all natural resources belonging
to the State, including land and waters, for the maximum benefit
of its people." She emphasized that the benefit should not be
given to oil companies and added that oil companies make
billions of dollars of profit from Alaskan resources.
4:19:13 PM
MARGI DASHEVSKY, representing self, Anchorage, Alaska, testified
in support of SB 112. She said it is important to stop giving
money away to oil companies who should pay a fair share of
taxes. She opined that SB 112 is an important step in reducing
the per barrel oil tax credit. She noted that the per barrel oil
tax credit is projected to cost the State of Alaska $6.5 billion
over the next 8 years. She said education funding is critical at
this time. She added that the additional funding SB 112 would
create is vital. She briefly discussed the importance of
creating social and economic stability for future generations of
Alaskans.
4:21:13 PM
LEON LYNCH, representing self, Ester, Alaska, testified in
support of SB 112. He briefly discussed the history of oil tax
legislation in Alaska. He emphasized that legislators with
conflicts of interest voted in favor of Senate Bill 21 (2013),
which passed by a single vote. He briefly discussed how the tax
structure created by Senate Bill 21 (2013) negatively impacted
the State of Alaska. He opined that SB 112 is a modest effort to
provide additional income to the State of Alaska. He
acknowledged that oil companies oppose this change but argued
that it would not deter investment.
4:23:48 PM
KEN HUCKABA, representing self, Wasilla, Alaska, testified in
opposition to SB 112. He stated that this would strangle the oil
industry and the future of Alaska. He noted that the oil
industry funds many state programs, including education. He said
he would like to see lobbyists and non-governmental
organizations (NGO) taxed, as they are stakeholders. He observed
that the state's budget has increased over the past decade and
surmised that SB 112 would add to that growth. He said Alaska
has neglected the private sector and offered examples. He stated
that fiscal crises increase the likelihood for bad decision-
making. This hurts the private sector. He said the State of
Alaska needs to encourage investment in the state but opined
that many decisions do not reflect this.
4:26:32 PM
JANE ANGVIK, representing self, Anchorage, Alaska, testified in
support of SB 112. She said all Alaskans are stakeholders. She
suggested that the state should reduce the per-barrel oil tax
credit from $8/barrel to $5/barrel and use the excess funds for
education. She shared that she has been working to make this
change. She opined that it is a modest change that would create
an opportunity for Alaskans to gain strength and independence in
education. She shared a brief anecdote to illustrate her
connection to Senate Bill 21 (2013) and support of SB 121.
4:28:08 PM
JANELL GRENIER, representing self, Nikiski, Alaska, testified in
support of SB 112. She noted that previous testimony has touched
on her reasons for supporting this legislation and emphasized
that she supports SB 112.
4:28:49 PM
DANIELLE REDMOND, representing self, Juneau, Alaska, testified
in support of SB 112. She briefly shared about her education and
work history and connected this timeline to the passage of
Senate Bill 21 in 2013. She pointed out that, while Senate Bill
21 (2013) projected that oil prices would remain above
$90/barrel, oil prices have remained low. As a result, oil
producers have benefitted from the per-barrel oil tax credit and
the legislature has sought ineffective short-term solutions to
the state's fiscal crisis. She shared that she has three
children in school. She emphasized that the short-term fiscal
solutions have negatively impacted Alaskans. She expressed
disgust that those with conflicts of interest are able to impact
discussions and outcomes.
4:30:54 PM
CHAIR GIESSEL left public testimony on SB 112 open and held SB
112 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 112 Public Testimony.pdf |
SRES 4/4/2025 3:30:00 PM |
SB 112 |
| SB 128 Public Testimony.pdf |
SRES 4/4/2025 3:30:00 PM |
SB 128 |
| SB128 DNR Response to SRES 4-4-25 meeting.pdf |
SRES 4/4/2025 3:30:00 PM |
SB 128 |