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Originally published March 30, 2009 at 7:55 PM | Page modified March 31, 2009 at 11:35 AM

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Alaska proposes oil surcharge on Washington state

A bill imposing a nearly $16 a barrel surcharge on North Slope crude destined for Washington state was introduced in the Alaska House on Monday.

Associated Press Writer

JUNEAU, Alaska —

A bill imposing a nearly $16 a barrel surcharge on North Slope crude destined for Washington state was introduced in the Alaska House on Monday.

It's a saber rattling response to a bill in the Washington Legislature that would tax fuel that's refined in Washington and exported to other states, including Alaska.

Washington currently exempts fuel exports from its 37.5 cent fuel tax. The measure would lift the exemption on the approximately 2.4 billion gallons of fuel exported annually to eight other states. The measure would raise about $500 million a year for statewide transportation projects, according to a Washington analysis.

Alaska House Speaker Mike Chenault, R-Nikiski, said his bill aims to prevent that bill from passing.

"We've looked at the issue of how can we protect Alaskans from paying for their (Washington's) state government," Chenault said. "This is a counteractive measure to get them to stop."

The bill would credit states that already have a fuel tax. But Alaska rescinded its 8-cent motor fuel tax last year, meaning it would pay the full per gallon tax under the bill, as would Montana.

It would generate about $7.7 million a year from Alaska, according to Washington's analysis.

Chenault's bill has 26 co-sponsors so far in the 40 member House, but the show of force may be unnecessary.

The Washington bill had a single hearing March 17 in the House transportation committee. Rep. Jeff Morris, D-Mount Vernon and the presiding officer of the Washington House, said it was discussed in a mix of revenue generating options but does not stand much of a chance to make it into law.

"It's pretty unlikely that it will move. We would need a two-thirds majority to get a tax increase through, which is tough," Morris said.

Also, the deadline has passed to move fiscal bills out of committee but that doesn't preclude them from being brought up again before the session ends April 26. Still, revenue from the proposed fuel tax was not factored into the House version of the state's transportation budget.

Morris said Alaska is quick to criticize its southern neighbor for raising taxes even though it recently raised its oil production taxes. He said Washington also wants to benefit from its natural resources.

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"We do not have oil reserves, one of our natural resources is our deep water ports," Morris said.

Two years ago, Alaska lawmakers sounded off on another Washington proposal to impose a fee of $100 or more on shipping containers carrying freight in and out of that state.

Both the Alaska House and Senate passed resolutions opposing the measure, saying the added cost of shipping would be economically devastating to Alaska.

Ninety-seven percent of goods shipped to Alaska arrive via shipping containers - almost all of them from Washington state.

The Washington bill never made it into law.

Copyright © 2009 The Seattle Times Company

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