Friday, 18 March 2011 09:10
Rep. Mike Doogan asked Department of Revenue Commissioner Bryan Butcher on Thursday for a list of names of all the people he and other state officials consulted with in coming up with the bill. Doogan and other lawmakers have grown more and more frustrated with administration officials because they can't seem to address questions relating to the bill to the lawmakers' satisfaction.
Some legislators had begun to suspect that the bill might have been drafted by oil company executives, rather than by staff for Gov. Sean Parnell.
Rep. Les Gara sent out a newsletter to constituents this week saying as much.
"Credible rumors (we'll work on substantiating them) are that the Governor's Office sat down with oil company representatives to craft his oil legislation. Not members of the public outside the industry. Just the companies that will enjoy the $2 billion the bill proposes to shave off the share Alaskans get for their oil revenue every year," he wrote. "Which leads you to ask, who's running this state? These are the same companies that, when asked, have refused to commit to produce a single new field, or single extra drop of oil, if we give them this huge dose of corporate welfare."
DNR: Oil industry had 'lots of input' in tax revision bill
Doogan and Gara double-teamed Butcher and other revenue officials at Thursday's House Finance Committee hearing on House Bill 110.
"While I've got you gentleman at the table I'm going to ask a question I've asked before: did you guys write this bill?" Doogan asked Butcher, who was sitting at the witness table along with Deputy Revenue Commissioner Bruce Tangeman and master auditor Lennie Dees.
"Yes, we did," Butcher replied, adding that the bill was specifically written by the three of them and Joe Balash, now deputy commissioner of the Department of Natural Resources and a top Parnell aide.
Butcher hastened to add that they "certainly had lots of input" from the industry, especially to find out what sort of "game changers" there might be in any proposed restructuring of the current tax regime, known as Alaska's Clear and Equitable Share, or ACES.
"But ultimately, when we rolled the bill out in January they didn't see it one second before anyone else," Butcher said, adding that the oil industry has testified that it doesn't support some parts of the bill.
Gara followed up by reiterating his uneasiness about what he sees as a lack of information about the measure and what it would do, especially when it comes to what it could cost the state treasury. He pointed out that Pat Galvin, the former revenue commissioner, seemed to know more about oil industry, taxes and credits than Butcher.
Gara specifically asked which companies Butcher and the others worked with in writing the bill.
Butcher ticked off most of those doing business on the North Slope -- ConocoPhillips, BP, Exxon Mobil, Armstrong, Pioneer -- "virtually every company that's operating up there we talked to," he said.
Gara asked whether the companies had asked the administration to include what he characterized as the two major provisions of the bill -- the reduction in the progressivity provision and a change that would allow companies to average the price of oil over the entire year instead of basing the tax on a monthly average. The reduction in taxes is estimated to cost the state $2 billion a year and revenue officials recently said the change in accounting from monthly to annual oil price cost the state about $200 million a year.
Butcher said the companies did not make specific requests and that "from the very beginning we had talked about doing something about progressivity." Butcher did not say how the switch from a monthly accounting to an annual accounting came into the discussion.
Doogan decided to request a list of meetings involving oil company representatives and state officials relating to the tax proposal, including people who might have since left the administration.
"I want to know who was talking about stuff and when they were talking about it," Doogan told Butcher.