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Click Bishop: 'If voting No doesn't work, I'll lead the charge for changes'

Click Bishop
OPINION: When I cast my key Senate vote in favor of SB 21, I had to take a leap of faith. But the burden of proof is not on me or any other Alaskan -- it's on the industry. If I don't see promised results in the next three years, I'll take action. Pictured: Sen. Click Bishop, R-Fairbanks, in his Capitol office. March 27, 2013. Richard Mauer

I know in these last days before the primary election, and the major decision Alaskans have in front of them regarding oil tax reform, you are being bombarded with numbers, graphs, arguments, slick ads, and a social media campaign that seems to fill up all of our feeds. I am not here to preach any of that to you, only to ask you to give SB 21 a chance and vote no on 1 this Tuesday.

As everyone pretty much knows, my decision to vote in favor of Senate Bill 21 was incredibly difficult.

While I campaigned to become a senator, I consistently told voters the bills offered by Gov. Parnell in the two years previous to my joining the Legislature were far too much of a risk to the state. I felt giving the oil companies an estimated tax break of $2 billion was far too big of a hit on our treasury.

On the other hand, I also said that the Senate’s competing bill at the time, which would have offered about $500 million in tax cuts, wouldn’t be enough to create the kind of change we needed to spur more production from the oil companies.

I said there has to be a number, somewhere south of $1 billion dollars, which would hit the sweet spot and stop the drop in production while keeping our economy, our jobs, and our state services intact.

SB 21 does just that. It incentivizes new production without approaching the $1 billion mark; in fact, the numbers show for this year, the state is taking in roughly the same amount under SB 21 as it did under ACES. In the next two to three years, I’m going to watch closely to see if that trend continues.

I also wanted a system that requires more actual oil production to receive tax credits from the state -- not unrelated spending. This is one of the big failings of ACES -- while it incentivized exploration and development through qualified capital expenditures (QCEs) it did not give incentives to increase production.

The QCEs turned out to build up quite a liability for the state, paying the producers for repaving parking lots and airstrips, and other expenses not directly related to increasing oil production. SB 21 repeals the QCEs and provides an incentive to produce more oil.

But here’s the hardest part -- when I went to push the green button to give my approval for Senate Bill 21 in March of 2013, I had to take a leap of faith. At that time, I was unhappy the oil companies had not given us any assurances, public or otherwise.

Here’s how my concerns were reported on the night I voted in favor of SB 21: "Bishop was cautiously optimistic the cuts would result in a change on the North Slope, but was adamant that he needs to see a ‘marked investment’ of billions of dollars per year if the industry hopes to hold onto SB 21’s changes. 'Do I trust the oil industry? No, they haven’t proven it to me yet,’ he said. ‘I’m just putting them on notice, right here and right now. They got one free pass with me tonight, and if I don’t see increased production, I’ll be the first one to file a bill to put it back on them, end of story.’ When asked when he would make that determination, he said three years."'

I have since seen what appears to be investment returning to Alaska. When I started work out of high school, building the Trans-Alaska Pipeline System (TAPS), the rail yards in Fairbanks were brimming with business. Over the past 20 years, I noticed those yards felt almost abandoned. But, sure enough, this year I visited those rail yards again and it is beginning to feel like the boom is getting started. I certainly hope that’s the case.

But I want to stress -- the burden of proof is not on me or any other Alaskan -- it's on the industry. I want to see increased spending and I want to see increased production. So, I am on the record, just as I was on the record during my campaign and my time in the Legislature. I will take this leap of faith, but if it's not producing the promised results within three years, I will lead the charge to change it.

I will also note that if we have to return to ACES or something like it because the producers have not produced, I will be leading the charge for that too, including a claw-back provision to return those dollars to Alaska.

That’s why I will be voting no on 1 this Tuesday and I hope you’ll join me in holding these oil companies accountable and putting Alaska back on the right path to a future filled with jobs and a great economy.

Click Bishop represents Senate District C in the Alaska Senate, which includes parts of Fairbanks, Delta Junction, Glennallen, Valdez and the Palmer area.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.