Alaska Gov. Sarah Palin said Friday she will call state lawmakers into special session on Oct. 18 to reconsider the state’s petroleum profits tax (PPT), which she said is not working out as planned and needs revision.

The historic rewrite of the state’s oil and gas taxes was passed in special session following much wrangling between lawmakers and former Gov. Frank Murkowski (see Daily GPI, Aug. 14, 2006). The tax rewrite was seen as key to moving forward with the plans for a gas pipeline to allow commercialization of North Slope reserves (see Daily GPI, July 6).

At the direction of Palin, the state’s Department of Revenue has reviewed the implementation of PPT and found that it is “resulting in far less revenue than was estimated in the fiscal notes prepared in support of the bill,” Palin’s office said. Further, the review found that companies are reporting far greater costs than were predicted, and exploration companies are getting less value from credits included in PPT than was expected due to a limited market for the credits among taxpayers.

Palin has told the Department of Revenue to come up with a proposal to fix PPT’s problems to be released by Sept. 4. “This will provide the legislature and public with more than 40 days to become familiar with the proposal before the special session begins,” Palin’s office said.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.