Bill would change tax on lease transfers

Petroleum News

An Anchorage representative believes the state should get a cut of any profit when an oil and gas explorer or producer sells or transfers any interest in a lease to another developer. Rep. Ethan Berkowitz has introduced legislation that would impose a new 1 percent state tax on any increase in value of transferred leases.

House Bill 446, as proposed by the fourth-term Democrat, would take effect immediately, if adopted in its current form. The bill’s passage, however, is not likely, considering the Alaska Legislature’s strong dislike for new oil and gas taxes.

The House speaker assigned the bill Feb. 9 to three committees, likely to bury it for this session. The measure would assess the 1 percent tax “for the transfer of a right, title or interest” in a lease. It would apply to the increased value in a working interest, royalty interest, net profit or any other agreement for oil and gas exploration or production.