Committee Passes Revised Oil Tax Plan After Careful Consideration
Revision to Senate Bill 21 creates fair, balanced and simple approach to oil & gas taxes
JUNEAU-Today, the Senate Resources Committee passed a revised version of Senate Bill 21 out of Committee. The amended bill was the result of five and half weeks of deliberation beginning in the Senate Special Committee on Trans-Alaska Pipeline System Throughput (TAPS), followed by work in the Senate Resources Committee. In order to arrive at the new changes, the committees held a combined total of 14 meetings featuring testimony from consultants, experts, the Administration, industry members, current producers and the public on how to put more oil in the pipeline while remaining fair to Alaskans.
“I am proud of our hard work to help establish an oil and gas tax system which is fair, balanced and simple across a wide range of oil prices,” said Senate Resources Chair Cathy Giessel, R-Turnagain Arm/North Kenai. “Using the Governor’s guiding principles we strived to create an attractive investment climate by virtually flattening government take at a level that is competitive with other similar oil basins around the world.”
The Senate Resources Committee took an innovative approach by adding the following ideas to the bill:
- Create a fair, predictable tax structure with a flat tax of 35%
- Expand incentives by increasing the Gross Revenue Exclusion from 20 to 30% for “new oil”. For example, oil like heavy and viscous oil that could be accessible using horizontal drilling or new technologies
- Promote Alaska employment and economic development through a corporate income tax credit for Alaska manufacture of oil and gas equipment
- Continue to evaluate Alaska’s oil and gas tax laws in light of changes in the global economy through an Alaskan Competitiveness Review Board
“After introducing the changes on Friday, the amended bill received favorable support from Alaskan business, the public and oil and gas industry representatives,” said Senate Resource Committee Vice-Chair Fred Dyson, R-Eagle River.
“I think what is most important to note is that this plan really does foster new production before any tax liability reduction,” said Senator Giessel. To see the EconOne analysis, please click here.
“Although we are very proud of the changes we have made to this bill, there is still work to be done,” said Senator Giessel. “There were many issues with fiscal implications that arose during our discussions more of the purview of the Senate Finance Committee to which we are referring those issues.”
The Senate Finance Committee plans to start work immediately on Senate Bill 21 with a meeting already scheduled for Thursday Afternoon.
For more information, please contact Margaret Dowling in Senator Giessel’s office at 907-465-4843
Posted: February 28, 2013