Rep. Scott Kawasaki

Share on Facebook   June 8, 2016

Flawed Oil and Gas Bill, What's Ahead for the PFD?

Dear Neighbors,

Legislature Advances Flawed Oil & Gas Tax Credit Bill

Rep. Kawasaki & Colleagues working on Oil & Gas Subsidy Reform Options
Rep. Kawasaki & Colleagues working on Oil & Gas Subsidy Reform Options

On Monday, the Conference Committee on HB 247, the Oil & Gas Tax Credit Reform bill, was advanced and passed by both the House and the Senate.

As introduced by the Governor, the bill was originally an aggressive reform to scale back costly subsidies by $500 million. The bill was dramatically changed through the Republican-controlled committee process to strip away nearly all savings and continue the unsustainable oil industry subsidies.

As I wrote last month, I joined a bipartisan group of lawmakers to pass a version of the bill that would have protected Alaska from being overwhelmed by these subsidies for the oil industry. As passed by the House, this bill would’ve added back $590 million in state savings over the next 3 years.

However, after all our efforts working across party lines, the Senate Majority gutted that version in favor of continuing the unsustainable oil tax credit system.  The Republican-controlled Conference Committee waited until Day 15 of the Special Session to meet, providing just over 12 hours’ notice. In a meeting that lasted just over an hour, they forwarded a new version of HB 247 closely aligned with the Senate version that includes subsidies estimated to be about $400 million, plus the $200 million still owed, while the state is forecasted to only take in $54 million in production taxes. This will be the third year in a row the state will pay out more to oil companies than it brings in to help fund essential government services. 

My colleagues and I in the Alaska Independent Democratic Coalition think this bill is far from a compromise and only a shadow of what we first had hope to pass. I stood strong with my colleagues and six majority members and voted against this bill, 21-19.

Despite working across party lines and the Governor, I fear the Governor has been backed into a corner by the Senate Majority because of his primary goal to pass a Permanent Fund restructure bill that will dig into the pockets of Alaska’s families. We can’t kick the can down the road when our children, seniors and University community will have to bear the brunt of these subsidies to wealthy corporations.

Still Ahead: Permanent Fund Restructure?

Even during “breaks,” Rep. Kawasaki is working with colleagues to find solutions.
Even during “breaks,” Rep. Kawasaki is working with colleagues to find solutions.

After HB 247 moved from the Legislature, my colleagues and I on the House Finance Committeetook yet another look at the Permanent Fund restructure plan, HB 245.  This bill has changed a number of times since January, and now includes a spending limit trigged by fuel prices that gives me concern it will lead us on a path to austerity. The Senate version, SB 128, passed the same day by a vote of 14-5.

Unless we find other sources of cash flow, our savings accounts will be depleted, no matter how we restructure our investments. We must agree on a sustainable way to save money before we ask regular Alaskans and their families for their hard-earned dollar or the dividend that is part of fueling our economy.

A Short “Break”

Because of a four-day biannual event that will displace nearly all legislators and staff from their housing in Juneau, the House and Senate have been forced to take a short break while running down the Special Session clock. I look forward to continuing conversations about a sustainable fiscal plan in the meantime and will be glad to get back to committee work next week.

As always, please feel free to contact me anytime if you have any questions about these bills or if there’s any way I can be of service to you.

Working Hard for Fairbanks Families,


Representative Scott Kawasaki
Alaska State Representative
City of Fairbanks

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As your Representative,
I am here to listen and help. Contact me anytime.
Phone: (907) 465-3466
FAX: (907) 465-2937
State Capitol Building
Juneau, AK 99801

Phone: (907) 456-7423
1292 Sadler Way
(AlaskaUSA Credit Building)
Fairbanks, AK 99701
Toll Free: (866) 465-3466

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