(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 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.

"This is the beginning of a long process, but I believe we have framed the debate," said Representative Ralph Samuels (R-Anchorage), co-chair of the Resources Committee. "I believe our bill strikes the essential balance between encouraging new investment, and gaining revenue from resources today."

"We think we've drafted a piece of legislation that will fill the pipeline, helping Alaska get the last barrel of oil, in addition to our next. And it will do so by bringing our tax regime into the 21st century and away from the antiquated ELF system," said Representative Jay Ramras (R-Fairbanks), co-chair of the Resources Committee.

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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