Representative Matt Claman's Alaska Matters
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Protecting Your Rights: Serving Sand Lake, Spenard, and Turnagain
July 17, 2017
In this issue:
• House Bill 111: Oil & Gas Tax Bill
• Floatplane Accident in West Anchorage
• Community Events

Dear Friends and Neighbors,

On Saturday, July 15, the legislature agreed to a compromise version of House Bill 111, the bill that eliminated oil and gas cash subsidies. On June 30, the Governor signed the FY18 operating budget. With an operating budget approved before the start of the new fiscal year, the legislature still has more work to do for a long-term solution.

House Bill 111: Oil & Gas Tax Subsidy Reform Bill

During the legislative session, the House and Senate passed competing versions of House Bill 111, but were unable to reach a compromise. On Saturday night, after days of negotiations, the House and Senate approved a compromise proposal to eliminate the unaffordable cash subsidies to oil companies. The compromise is estimated to save the state $200 million per year within three years.

The compromise version of HB 111 will replace Alaska’s existing subsidy program and includes important reforms:

·         Cash subsidies — Eliminates cashable subsidies effective July 1, 2017, while allowing companies to recover their costs through lower production tax payments once a project is producing oil or gas.
·         Hardened floor — Strengthens the 4% minimum tax to ensure Alaska receives some production tax revenue in times of low oil prices.
·         Carry-forward losses — Companies may write-off their drilling expenses on future production taxes, but it will not be able to write-off drilling expenses if the company does not produce oil from the field. And to encourage oil production, the deduction will eventually lose value: 10 percent per year after seven years (if the field is producing oil) or 10 years (if the field is not producing oil).
·         Ring-fencing — Losses incurred from fields that are not producing oil cannot be written-off against fields that are producing oil. Companies can only deduct ring-fenced losses when the field where they were incurred comes into production.

By reforming the oil and gas subsidy program to better incentivize actual production, the HB 111 compromise creates a more fair oil and gas tax policy that protects the State of Alaska from the future liability of covering losses from a non-producing project—something Alaska can no longer afford.

According to the Alaska Department of Revenue, Alaska will realize savings after the current fiscal year. In FY19, the state will save $95 million, and in FY20, the savings will rise to $185 million. Between now and fiscal year 2027, Alaska will save more than $1.5 billion.

Passage of HB 111 puts us one step closer to a responsible action plan for Alaska. I am hopeful that moving forward, the House and the Senate can compromise on the four pillars of a comprehensive financial plan, including a capital budget, that will help support a strong economic future for Alaska.

Floatplane Accident in West Anchorage

I was relieved to learn that no one was injured during the floatplane crash that recently occurred near Balto Seppala Park. The NTSB has released their preliminary report on the incident:

During an on-scene interview on July 9 with the National Transportation Safety Board (NTSB) investigator-in-charge (IIC), the pilot stated that after a takeoff from the north water lane, and during climb out, he was unable to retract the airplane's wing flaps. He then requested to return for landing, and the Lake Hood Air Traffic Control Tower (ATCT) specialist on duty granted his request. He said that he then turned right and entered a right downwind leg to return to Lake Hood Seaplane Base. The pilot reported that while on the downwind leg, at an altitude of 600 feet, all engine power was lost. He then selected an open field that was surrounded by a residential neighborhood as a forced landing site. Unable to reach the field, the airplane subsequently landed in the adjacent neighborhood, and just short of his intended forced landing site. During the forced landing, the airplane collided with a tree, various structures, a light pole, and a vehicle before coming to rest in a residential street. The airplane sustained substantial damage to the wings, fuselage, engine firewall and empennage.

West Anchorage, and specifically the area near Lake Hood, is a very heavily traveled area with multiple takeoff and landing routes. We do not know what caused the plane’s engine to fail, but the NTSB will likely release its factual report on the crash in early 2018. Following the factual report, the agency will release a probable cause report.

We will keep you advised if the airport or the Lake Hood Seaplane Base provide new or updated safety recommendations for our community.

Community Events

Mark your calendar for these upcoming events:

Turnagain Block Party

Join friends and neighbors this Thursday evening for the annual Turnagain Block Party!
When: Thursday, July 20th at 6:00 pm - 9:00 pm
Where: Corner of Lord Baranof Dr. and Illiamna Ave.
Admission - $5/individual, $20/family

Yarducopia Bike Tour

As always, please let us know if you have any question or concerns.


signed: Matt Claman

    Rep. Matt Claman

    P.S. follow me on Facebook and Twitter

Contact Information

(907) 465-4919

State Capitol Bldg. Rm 405
Juneau, Alaska 99801

Contact the Governor

550 West 7th Avenue, Suite 1700
Anchorage, AK 99501
T (907) 269-7450 F (907) 269-7461
EMAIL: Governor Bill Walker


State Info (907) 269-5111

Serving the Anchorage Neighborhoods of
Sand Lake, Spenard, and Turnagain

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