Proposal would raise Alaska's oil-tax minimum to 6% for five years and add $15-per-barrel corridor fee

The Senate Resources Committee heard the Department of Revenue's oil and gas tax presentation as part of the governor's House Bill 284.

Dan Stickel, chief economist for the Department of Revenue, summarized the production-tax proposal: the bill would increase the minimum gross-value tax floor from 4% to 6% for five years and then revert it to 4% in 2032. He said there is also a provision allowing an earlier reversion if Trans-Alaska Pipeline System (TAPS) throughput averages 650,000 barrels per day or more by 2030. Stickel also described a new infrastructure fee of $15 per taxable barrel that would be paid alongside the production tax and could not be offset by credits, with proceeds dedicated to maintenance of the Alyeska pipeline corridor and related public roads such as the Dalton Highway.

Stickel presented modeled revenue impacts of the floor increase plus the $15-per-barrel fee, saying the department's modeling showed "impacts ranging from about $150 to $200,000,000 of additional revenue, per year" during the period the higher minimum applies, and roughly $25 to $30 million per year after the floor reverts. He emphasized that impacts vary by oil price and company circumstances: as oil prices rise, more companies pay above the minimum and the relative impact of raising the floor falls.

Committee members asked for details about how much production would be taxed below the floor and how carried-forward lease expenditures interact with the minimum. Stickel pointed the committee to table 6-8 in the department's fall 2025 revenue book for GVR-eligible production forecasts and said the appendix and corrected slides would be provided. He also explained that lease expenditures are statutory deductions for direct production costs and that the department applies a 4.5% overhead allowance rather than itemizing all administrative costs.

Senators asked how narrowly the $15-per-barrel infrastructure fee would be applied. Stickel said the administration's intent is to support maintenance and infrastructure along the Alyeska corridor and that implementation and appropriation details would be coordinated with the Office of Management and Budget.

The committee did not take any formal votes on the production tax changes during this meeting. The department committed to supplying corrected slides and the appendix to the committee for further review; the hearing concluded without immediate committee action on the bill.

Next step: the committee requested the updated appendix and slides and scheduled further hearings (the committee adjourned and listed Feb. 9 as the next meeting time).