Following one of the most productive legislative sessions in recent memory, Governor Sean Parnell today signed into law Senate Bill 21, his More Alaska Production Act to attract new investment and increase oil production on the North Slope. The governor also signed House Bill 129 and Senate Bill 27, both permitting bills to put more Alaskans to work sooner on resource projects.
"Our state is on track for an Alaska oil comeback," Governor Parnell said. "It's been just over a month since the More Alaska Production Act passed, and Alaskans are already seeing the positive effects of a more competitive tax regime with encouraging announcements from several companies. Alaskans now have a tax system in place built on our four principles: it is fair to Alaskans; it encourages new production; it is simple and restores balance to the system; and it is competitive and durable. I commend the Legislature for seeing this through and working with my administration to spur new production and increase opportunities for Alaskans."
The More Alaska Production Act 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. Alaska's treasury will no longer be at risk of paying $1 billion or more in tax credits when oil prices are low, and the state will now be competitively positioned when prices are high.
Senate Bill 27 allows the Department of Natural Resources (DNR), in coordination with the Department of Environmental Conservation, to seek and assume primacy from the federal government to administer the regulatory program for managing certain wetlands. House Bill 129 streamlines the state's permitting process by authorizing DNR to evaluate oil and gas exploration projects in geographical areas, and then define the criteria by which specific projects are evaluated and approved.
"The success of our economy is tied to our ability to responsibly develop our resources," Governor Parnell said. "Today, we have ensured a future of more oil production for Alaskans and a more prosperous economy full of opportunity for generations of Alaskans to come."