Legislature Is Looking At Potentially Borrowing 1 Billion To Pay Oil Debt

first_imgStory as aired: Audio PlayerJennifer-on-oil-tax-lending-bill.mp3VmJennifer-on-oil-tax-lending-bill.mp300:00RPd Facebook0TwitterEmailPrintFriendly分享The Alaska Legislature is considering a proposal that would allow the state to borrow up to $1 billion from global markets in order to cover the debt it owes to oil and gas companies. According to BlueCrest CEO Benjamin Johnson the $525 million project for BlueCrest has spent roughly $400 million and is expecting the other $125 million back from the state. But, the company has only received $27 million back in tax credits, and caused the company to take an ‘operational pause’ in order to obtain additional funding. Senate Bill 176; “An Act establishing the Alaska Tax Credit Certificate Bond Corporation; relating to purchases of tax credit certificates; relating to overriding royalty interest agreements; and providing for an effective date.” Companies like BlueCrest who started their Cosmopolitan project out in Anchor Point based on a partnership proposed by the state in 2014. The state promised billions of dollars in tax credits to smaller oil and gas companies between 2003 and 2017. But when petroleum prices plunged, the state could no longer afford to pay the credits. According to text written within the bill the debt is estimated to be be closer to $1 billion once the expected applications are submitted this year. SB 176 remains in the Senate Resources Committee as of this morning. Governor Walker signed HB111, a bill ending cash credits, into law at the end of July in 2017. The state has been paying only the minimum amount on what it owes in tax credits to companies for the past several years, but as of December 31, the state owes $806 million in credits.last_img