Governor Sean Parnell is applauding the State Legislature for passing his oil tax reform legislation, designed to increase opportunity for Alaskans and grow Alaska’s economy. Following years of study, public debate and testimony, the governor’s legislation to spur oil production and attract new investment passed the Alaska Legislature Sunday.
Parnell said that Alaska’s below-ground resources are world class, and above-ground, we have now set the stage for a future of growth and opportunity for Alaskans. We are signaling to the world that Alaska is back, ready to compete, and ready to supply more energy once again.
Parnell said that Senate Bill 21, eliminates the complicated “progressivity” feature of the current tax system and replaces it with a simple 35 percent base rate and a per barrel tax credit tied directly to the production of oil.
By ensuring Alaska’s treasury is not exposed to the risk of paying $1 billion and more in tax credits when oil prices are low, and keeping the state competitively positioned when prices are high, Senate Bill 21 is fairer to Alaskans regardless of the price of oil. The legislation restructures the tax credit system so the state is not on the hook for billions of dollars in tax credits not specifically tied to production. This legislation replaces those credits with tax incentives that are applied based on actual oil production.
Governor Parnell added that the legislature passed legislation that meets his four guiding principles…
Gov Parnell: “One, that any change must be fair to Alaskans; two, it must encourage new production; three, it’s got to be simple so it restores balance to the system; and four, it must be competitive and durable. Alaskans deserve to reap the benefits of our oil and not passively accept status quo decline. Any legislation that meets my four guiding principles will not only have my support, it will get my signature.”