Senate committee takes public testimony Monday on oil tax bill

One of the sensible things the Legislature should do this year is enact SB 114, which would close the Hilcorp loophole and reduce state oil tax credits by $3 a barrel, tying the credits to capital investment. This would be a good step toward a balanced fiscal plan.

Two years ago, Gov. Mike Dunleavy said he would support a reduction in tax credits and closing the Hilcorp loophole if the Legislature sent him a bill with those changes.

There is a great disparity in how the state treats the giant oil companies, giving Hilcorp a immense tax break simply because state law has not been updated to tax the specific corporate structure chosen by company owner Jeff Hildebrand, a Texas billionaire.

As I have written here before, the $8 per barrel credit was never analyzed by the Legislature before SB 21 was enacted and the number appeared out of nowhere overnight shortly before the tax law was approved a decade ago. The credit had been $5 a barrel before the House upped it to a figure that was not vetted.

The bill is up for a public hearing Monday at 1:30 p.m. Details on how to testify are below. The bill would provide about $300 million to $600 million a year, according to the latest fiscal note from the Department of Revenue.

Details on the latest version of the bill can be found here. Here is a slide presentation prepared by attorney Robin Brena about reasons to enact the changes.