The Agrium tax credit bill passed the State House last night, initially 27-8 and upon reconsideration passed 30-8 and gained three new cosponsors. We asked Nikiski Speaker Mike Chenault why his bill gained ground during the vote…
Speaker Chenault(R-Nikiski): “Agrium has to produce in order to receive that tax credit and I think that they finally realized that it’s not a giveaway.”
Chenault said the decision to give a tax credit worth roughly $3-4 million is worth the potential return of $12-$15 million.
Speaker Chenault(R-Nikiski): “Their usage of natural gas from a state lease land that’s currently not being used, it would bring money into the state coffers and might give us the opportunity to put hundreds of people back to work on the Kenai.”
Chenault said the natural gas isn’t being used right now and won’t be used for some time unless a long-term user is found.
Managers say the Agrium restart would cost $275 million and, if approved, it could take place as early as 2017.
According to Chenault’s office, the credit cannot be carried forward from year to year and its value cannot exceed the amount the state receives for its royalty share. Operators wouldn’t be able to apply the credit for restarting a facility or any other pre-production purposes. The tax credit would sunset in 2024.
HB100 now moves to the Alaska Senate for consideration.
