Alaska's minority Democrats unveil oil tax plan

Published on NewsOK Modified: February 24, 2014 at 10:57 pm •  Published: February 24, 2014
Advertisement
;

JUNEAU, Alaska (AP) — Minority Democrats in the Legislature on Monday unveiled their vision of an oil tax system should voters this summer roll back the tax structure lawmakers approved last year.

It's similar to a proposal aimed at increasing production that they put forth last year as an alternative to the plan pushed by Gov. Sean Parnell that ultimately passed. Democrats say their plan also is aimed at ensuring Alaska gets its "fair share" for its oil.

Senate Minority Leader Hollis French, D-Anchorage, called the Democrats' plan a fair alternative. "Or, as we say, there's a better way than the giveaway," he said.

The Democrats' proposal would, among other things, provide time-limited tax breaks for oil from newer fields and new developments in legacy fields. It would provide tax breaks for future production of heavy oil and for future production in legacy fields over 2012 levels. It also would require minimum work commitments as part of lease terms and allow the Alaska Industrial Development and Export Authority to issue loans to build or improve North Slope oil processing facilities and other infrastructure.

Voters in August will decide whether to keep or repeal the oil tax structure passed by lawmakers in 2013. If the referendum is successful, the system will revert to what was in place before the change.

The Democrats' proposal builds off the old system, known as Alaska's Clear and Equitable Share, or ACES. That system featured a 25 percent base tax rate and a progressive surcharge triggered when a company's production tax value hit $30 a barrel, which industry representatives said ate too deeply into profits, discouraging new investment. The surcharge also was credited with helping fatten the state's coffers when prices climbed in recent years.

Continue reading this story on the...