Alaska Senate passes oil tax revamp

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March 21, 2013

Alaska

By Alex Murray

JUNEAU, Alaska: After a long day of debate and numerous amendment proposals, the Alaska State Senate narrowly passed a bill to change the state's oil tax structure Wednesday night.

Around 9 p.m. local time, Senate Bill 21 passed 11-9; Republicans Bert Stedman and Gary Stevens joined all seven Democrats in opposition. Although Democrats had hoped to convert Click Bishop in time for a reconsideration vote, the Senate passed the bill again today by the same margin.[1]

The bill would end the current Alaska's Clear and Equitable Share (ACES) system, which taxes progressively when profits per barrel are greater than $30. After several versions were proposed, the bill that reached the floor would have increased the base tax rate for oil producers from 25 to 35 percent through 2016, with a 33 percent rate thereafter. Out of over a dozen proposed, the only amendment to pass yesterday set the rate at 35 percent with no automatic adjustments, matching the Senate Resources Committee's proposal and exceeding Governor Sean Parnell's original plan by ten percent.[2]

Proponents argue that the plan will attract more development with more stable rates and expanded incentives, but opponents are skeptical as to whether this will happen.[3]

Following the first vote, Parnell issued a statement that spoke positively of the bill's passage. The bill now moves on to the Alaska House of Representatives.[4] Alaska is one of 24 Republican state government trifectas.

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