Representatives of the North Slope's three major players are scheduled to testify Tuesday before a House committee on proposed changes to Alaska's oil tax structure.
The House Resources Committee is working on SB21, which is aimed at making Alaska more competitive for investment dollars and increasing production.
The existing system, passed in 2007, features a 25 percent base tax rate, plus a progressive surcharge that's triggered when a company's production tax value hits $30 a barrel. The idea when it passed was that the state would help oil companies on the front end with things such as tax credits and then share profits on the back end when oil flowed and prices were high.
Companies have complained that the surcharge — credited with helping fatten state coffers in recent years — eats too deeply into their profits when prices are high, discouraging new investment. Alaska's revenue commissioner has said he's seen no evidence that tax credits to oil companies — which could top $1 billion next year under the system — have led to increased production.
SB21, which narrowly passed the Senate last week, would eliminate the surcharge, prompting critics to call it a giveaway. The latest version of the bill would raise the base tax rate to 35 percent, provide a $5 credit for each taxable barrel of oil produced and provide a 20 percent tax break for oil from new fields and new oil from legacy fields, long the mainstays of Alaska's oil industry.
Representatives of BP PLC, ConocoPhillips and Exxon Mobil Corp. are expected to testify Tuesday evening, while the committee plans to hear from smaller producers and explorers Wednesday.
Committee co-chair Eric Feige has said he hopes to advance a bill sometime next week. The bill would then go to the House Finance Committee.
The Legislature is scheduled to adjourn April 14.