State Senate Passes Oil Tax Reform

Sen. Fairclough(R-E. Anchorage): Many people stood up on the floor tonight, in a courageous move for Alaska’s future, not taking benefits today, in turn for delivering services tomorrow for our kids, is why I pushed the green button.”

 

Senator Anna Fairclough, following last night’s passage of Governor Sean Parnell’s oil tax reform legislation, SB 21 following a lengthily floor session.

The bill, as we’ve reported, includes a 35 and 5 plan which includes a 35% base tax with a $5 per barrel deduction.

 

Senator Cathy Giessel, chair of the Senate Resource committee called Senate bill 21, innovative legislation….

 

Sen. Giessel(R-S. Anchorage): “In covering all of those aspects that Alaska needs, we need new production, and that’s exactly what we addressed with the Gross Revenue Exclusion. That 20% is only earned when the oil is produced; it’s not like the capital credits that we’re giving right now where we could, next year, spend $1billion in capital credits. And as we look at where those capital credits go, it looks like about 50% of that billion dollars goes to companies that are not producing oil right not. They do not have a tax liability, that’s not where we want to be putting our money. We want to incentivize new oil, and you can only get the Gross Revenue Exclusion, the GRE, on oil that is produced.”

 

Senator Peter Micciche noted that the senate spent hundreds of hours to determine the right line of competitiveness with this oil tax reform…

 

Sen. Micciche(R-Soldotna): “If you think about that, the most damaging aspects of ACES passed on the floor with no evaluation. We ended up with a very punitive level of progressivity on the floor without evaluation as we’ve paid for that for years. How’ve we paid for it? 2005, when the rest of the world started a party on increasing their production, our direct competitors, the great American energy reset, we weren’t invited to that party. That was before unconventional oil.

 

SB 21 passed on an 11-9 margin.

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