Proposal would raise prevention surcharge

Becky Bohrer

Associated Press

A bill introduced in the Alaska House Feb. 21 would raise the per-barrel surcharge on oil from 4 cents to 7 cents to help bolster a state account used for the cleanup of contaminated sites, non-emergency spill response and other activities.

The bill, from Rep. Cathy Munoz, R-Juneau, also would keep in place a 1-cent-per-barrel surcharge for a separate emergency response account until that account hits $75 million. The 1-cent surcharge is currently suspended when the account hits $50 million. As to why she proposed raising the cap, she said what was considered a feasible amount for a response fund in the 1990s might not be the right amount today.

Earlier in February, Kristin Ryan, director of the state’s Division of Spill Prevention and Response, told a subcommittee chaired by Munoz that the prevention account would soon not have enough money to keep up with costs and would likely need a general fund appropriation as early as fiscal year 2016.

The account gets its money from the 4-cents-per-barrel-of-oil surcharge, but declining oil production means less money generated by the fee. Money from fines, penalties and settlements also go into the fund, which helps pay for inspections, readiness activities and other costs.

Munoz said increasing the surcharge to 7 cents is a good starting point. She said she and her co-sponsors looked at the possibility of a refined products tax but said that idea required further debate and analysis. She said she hoped the House Resources Committee would be able to look at that issue.

She said she decided to introduce the bill because prevention account funding has been a continuing concern. On her subcommittee, she said there’s a “broader awareness and an acceptance that we have to make the operations sustainable, and that this is one option to do that. It might not be what ultimately gets through the process but it’s a good starting point.”