(Juneau) - The House Natural Resources Committee has passed a committee substitute for HB 488, Governor Frank Murkowski's petroleum production tax bill.

HB 488 will revise the state's severance tax structure on the oil and gas industry. The bill replaces the Economic Limit Factor (ELF) formula, with a profits-based structure. Chief among the bill's provisions is capturing for the State of Alaska a greater share of the market price when oil is above historic averages. This "progressivity" feature should realize an extra billion dollars for the state treasury, annually, at current high market prices.

Among the amendments to HB 488 was one to protect the gas production in the Cook Inlet.

"One of my concerns with this bill was how it may adversely affect the Cook Inlet," said Representative Olson. "This amendment helps to protect production in the Inlet by holding the tax rate steady by removing gas from the progressivity portion of the bill."

The House Resources version also provides the industry with credits and other incentives for renewed exploration activity statewide. HB 488 now moves to the House Finance Committee for consideration.

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