“Decoupling” Bill Ready for Hearings

By Dave Donaldson

The first steps toward separating oil taxes from gas taxes are ready for formal consideration — and they’ll begin tomorrow.   Two bills were introduced in the Senate today that will be in front of the Finance Committee for the rest of this week. 

Committee Co-Chair Bert Stedman says he is not trying to do any more than remove the possible negative effects of combining the two revenue streams and incentives.

He says the option to be considered right now is whether to remove what’s called a “progressivity”  element from gas taxes.   That’s the portion of the tax structure that pegs tax rates to prices of the resource,  and Stedman says it is a difficult job to legislate.

The concern for the last several years has been when we get gas injected into our system,  complexity is going to get ratcheted way up — and the confusion level.  So we’re trying to minimize that.   It’s early in the process.

The legislation introduced today removes statutory references that base gas value on the energy equivalent of a barrel of oil.  In that simple change, it does not change the actual tax rates on either resource.

On the gas line, clearly there isn’t the information to set the gas tax available today.  That’ll come in the future when we have more information.

Stedman is looking for quick action in the Senate.  The finance committee has already spent two weeks on the subject — and the state operating budget will be on their table next week.  The bill must also move through the House, where members say it needs consideration quickly.  The abbreviated timing of dealing with the bill hinges on TransCanada’s filing for what’s called an “Open Season” — when possible shippers have an opportunity to bid on terms for the use of the line.  That is expected at the end of April,  meaning Stedman’s bill must be on the governor’s desk by April sixth.


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