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Oil tax rewrite comparable impact to Parnell's

Published on NewsOK Modified: February 27, 2013 at 9:27 pm •  Published: February 27, 2013

Estimates are based on a fall forecast for oil prices and production that predicts a continued net decline in North Slope production through 2022. The note looks out until fiscal year 2019, and oil prices during that period are forecast to vary from about $109 a barrel next year to $118 in 2019.

The analysis with Parnell's plan indicated a $900 million fiscal impact next year, dropping to $550 million in fiscal year 2015 and rising to an impact of $1 billion by 2017, according to the analysis.

Democrats, like French, have raised questions about how great an impact the gross revenue exclusion will truly have, among other things. It is listed as indeterminate up to a negative revenue impact of up to $50 million a year, based on the fall forecast, according to the analysis attached to the Senate changes.

Senate Resources advanced the bill with a list of things that members believe merit further review in Senate Finance, including whether the Department of Natural Resources needs broader authority to offer royalty relief and whether there should be a time limit on the gross revenue exclusion.

The committee also sent on a letter of intent, saying, in part, that the Legislature intends, through passage of SB21, to "reflect the policy determination that the Legislature chooses opportunity over decline."

Parnell, in a statement Wednesday, thanked the committee for its work and said the administration would continue to review the changes "and look forward to evaluating the balance it strikes in the Senate Finance Committee."

"Recognizing that the bill has a way to go — we are very pleased with how the bill is progressing," said Parnell's spokeswoman, Sharon Leighow.


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