- Associated Press - Thursday, April 14, 2016

JUNEAU, Alaska (AP) - The Alaska House has kicked back to committee a rewrite of Gov. Bill Walker’s oil and gas tax credit bill, a wrinkle in an effort to put together a state fiscal plan in the waning days of the legislative session.

Speaker Mike Chenault announced on the House floor Wednesday night that the bill would be sent to the House Rules Committee. Bills scheduled for a floor vote that do not have enough votes to pass sometimes are sent to Rules to keep them alive.

In an interview Thursday, Chenault, R-Nikiski, said he didn’t think the bill had the support to pass.

“I think there was something in there that everybody disliked and probably disliked enough to not support it,” he said, adding later: “It would have probably been a pretty red board up there.”

Red on the vote board denotes a “no.”



Credits have become a major spending item at a time when the oil-dependent state faces an estimated $4 billion budget deficit. But some are concerned about the impacts changes will have on an industry also hit by low oil prices. Members of the House - including within its Republican-led majority - have been split on how far to push changes to the system.

“We hope we can come to some solution, but we don’t have any answers yet,” Chenault said.

House Minority Leader Chris Tuck, D-Anchorage, has said that if his caucus isn’t satisfied with changes to the tax credit program, it will be hard to justify going into a major state savings account to help cover state costs, asking people to pay taxes or to make changes to the Alaska Permanent Fund dividends. To meet the threshold generally needed to tap the constitutional budget reserve, 30 votes are needed in the House, meaning support from the Democratic-led minority would be needed.

“I think all of us realize that we need to address the tax credit issue before we can go much farther on some of the other revenue measures or even the budget bill,” Chenault said. “It’s a key piece that needs to be addressed.”

The Senate has been working on its own version of the bill while awaiting action by the House.

“We need to know what their tolerance level for that particular issue is,” said Senate Majority Leader John Coghill, R-North Pole.

Walker said pulling the bill back from the House floor and putting it in Rules until the votes are there was the right thing to do. The bill is a critical piece to the administration’s overall fiscal proposal, he said.

“For that to have failed would have been challenging,” Walker said.

The administration has offered to sit down with lawmakers on the credits issue, Walker said. “We’ve offered to weigh in as much or little as they want us to,” he said.

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