Governor looking at special session for PPT

An attempt to amend last year’s petroleum profits tax moved in both House and Senate, passing in the Senate, but never reached a final vote in the House.

The bills would have added costs resulting from improper maintenance or lack of maintenance to the list of items companies cannot claim as lease expenditures in calculating taxes due under PPT.

House Democrats called for a floor vote May 16 to move Senate Bill 80, the PPT amendment, out of House Finance. The vote failed on party lines, 16 yeas to 23 nays.

House Bill 128, which passed House Oil and Gas, Resources and Judiciary, is also in House Finance.

In the Senate, Tom Wagoner, R-Kenai, moved that the Legislature extend the session by 10 days to deal with remaining issues including PPT. Wagoner, the Senate sponsor of SB 80, is a member of the five-member Republican minority; the vote failed 5 yeas to 14 nays.

SB 80 cleared Senate Finance May 8 and passed the Senate 20 to 0 May 10. The bill was referred to House Finance May 11; a hearing scheduled for May 12 was postponed.

HB 128 was introduced Feb. 12, heard and passed out of Oil and Gas; it went to House Resources early in April where it was heard, held and finally assigned to a subcommittee. A vote to move the bill out of Resources failed in early May; then members agreed to move the bill if a Judiciary Committee referral was added. Judiciary heard the bill and moved it May 8; it has been in Finance since. No hearing has been held.

Special session likely this fall

The subject will likely be taken up in a special session, the governor said.

“We need to revisit PPT. I think we shouldn’t have to ask for anymore evidence to surface that explains why we have to revisit oil taxes. Our oil tax formula was changed under a dark cloud of suspicion. We’re going to clear it up. And the FBI is already clearing some of it up for us.”

The best way to revisit PPT is a special session, the governor said. “It should be in the fall after we have time to fully evaluate the PPT rates … (and) we can present facts, figures, data to the lawmakers.”

Time is also needed to debate a gross tax vs. PPT, she said.

Palin said she’s been told fall is the best time for a special session, “after fishing season but before hunting season.”

—Kristen Nelson