The House Finance Committee has proposed a tax on the oil industry that could be worth more than $700 million to the state’s treasury.

It comes with just a few days left in the 90-day session, though the state’s constitution still permits lawmakers to work through May 16.

The proposal, first heard Tuesday night, reflects an ongoing effort by the House majority to generate new revenue while the state faces a $2.3 billion budget deficit.

So far, those two-year efforts have been met with staunch Senate resistance.

House Finance Committee Co-chair Paul Seaton (R-Homer) says the state cannot rely just on budget cuts and tapping into savings each year.

“It’s one of those things where you need to have revenue,” Seaton said. “Balancing revenue and expenditure is balancing the budget. If you don’t want to balance the budget-- other than taking out from a different savings account-- you might not like this.

“Most people realize that the lowest taxation on oil companies on the North Slope in the history of our state-- I mean that’s when we started producing oil-- is not a good system.”

Senate Finance Co-Chair Anna MacKinnon (R-Eagle River) says there is hardly enough time for such review.

“I just think it’s too late in this process,” she said Monday. “I believe the administration has said this is not the time for another discussion on oil and gas taxes.

“We need some certainty, and right now, that certainty is around a fiscal plan and how we manage the resources that we have currently.”

Hearings on House Bill 411 began on Tuesday when Seaton presented his ideas, which are carve-outs from last year’s bill that ultimately eliminated a different tax credit program.

Seaton wants to lower the rate on oil profits from 35 percent to 25 percent but also eliminate certain credits.

Alaska has made changes to its tax system seven times since 2005 when Gov. Frank Murkowski shifted to a net profits tax system.

The state’s tax director, Ken Alper, warned the panel Tuesday night that tax stability is an issue for companies looking to invest in Alaska’s oil patch.

Alper also told the committee late Tuesday that it “may be premature” to pursue a substantial revision.

Hearings are scheduled to continue throughout the week.

Copyright 2018 KTVA. All rights reserved.