Legislature(2011 - 2012)

2011-01-19 Senate Journal

Full Journal pdf

2011-01-19                     Senate Journal                      Page 0046
SB 49                                                                                                                         
SENATE BILL NO. 49 BY THE SENATE RULES COMMITTEE                                                                                
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
          "An Act relating to the interest rate applicable to                                                                   
          certain amounts due for fees, taxes, and payments                                                                     
          made and property delivered to the Department of                                                                      
          Revenue; relating to the oil and gas production tax                                                                   
          rate; relating to monthly installment payments of                                                                     
          estimated oil and gas production tax; relating to oil                                                                 
          and gas production tax credits for certain                                                                            
          expenditures, including qualified capital credits for                                                                 
          exploration, development, and production; relating to                                                                 
          the limitation on assessment of oil and gas production                                                                
          taxes; relating to the determination of oil and gas                                                                   
          production tax values; making conforming                                                                              
          amendments; and providing for an effective date."                                                                     
was read the first time and referred to the Resources and Finance                                                               
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, Department of Revenue                                                                                       
 Fiscal Note No. 2, zero, Department of Natural Resources                                                                       
Governor's transmittal letter dated January 17:                                                                                 
Dear President Stevens:                                                                                                         
Oil production in Alaska remains the backbone of our economy. As oil                                                            
production declines and as the federal government forbids multiple                                                              
development opportunities we must better incentivize development of                                                             

2011-01-19                     Senate Journal                      Page 0047
state lands. To that end, under the authority of Article III, Section 18,                                                       
of the Alaska Constitution, I am transmitting a bill to make Alaska                                                             
more competitive as an oil producing state by proposing amendments                                                              
to Alaska's oil and gas production tax.                                                                                         
The bill would provide tax incentives and credits for the oil and gas                                                           
industry to increase exploration for, and development of, Alaska's oil                                                          
and gas resources at any price range. We must remain focused on                                                                 
getting more oil into the pipeline, and creating jobs for Alaskans.                                                             
The bill accomplishes six primary goals: (1) encourages development                                                             
of new, currently undeveloped leases or properties; (2) encourages                                                              
investment in exploration, development, and production at all price                                                             
ranges; (3) strengthens the minimum tax; (4) extends tax incentives to                                                          
North Slope activities and allows producers to apply tax credits in one                                                         
year; (5) limits the time for assessment of additional production taxes;                                                        
and (6) reduces the interest rate on delinquent taxes and refunds. These                                                        
changes would ensure the State continues to receive reasonable                                                                  
revenue and establish a more competitive investment climate for job                                                             
These amendments to Alaska's oil tax regime will foster new                                                                     
production sources to stem the decline in North Slope production.                                                               
More oil means more jobs for Alaskans, more long-term revenue to                                                                
the State, and lower Trans-Alaska Pipeline System tariffs per barrel.                                                           
I urge your prompt and favorable action on this measure.                                                                        
Sean Parnell