An audience that filled to capacity Anchorage’s Denaina Center’s main ballroom stood cheering as Governor Sean Parnell signed his name to SB 21.
“Senate bill 21, the More Alaska Production Act, is now the law of Alaksa….. More Alaskan opportunity,” the governor said to cheers from the audience.
Parnell dubbed the bill The More Alaska Production Act, telling the audience that it is his intent that Alaskans who are now 35 or under will benefit from more oil production, now that state law allows producers tax benefits aimed at enticing more investment in Alaska. He asked the thirtyfives or younger to stand and addressed them directly
“I think about the Alaska Constitutional provision that says that Alaska’s resources are for the people’s benefit. That’s not just prior generations, that’s not just my generation, that’s your generation and generations to come. But neither I nor anybody else sitting down believes that we should be satisfied with forty years lighter production from Prudhoe Bay. We think that there is at least another forty years for you to benefit from even when we are gone. This is your chance to claim Alaska’s promise. “
The governor says the bill spurs production by eliminating the changing monthly tax rate calculations under the old tax regime. Alaska’s oil tax system will from now on be built around a 35 percent base rate, with tax incentives tied directly to new oil production. The governor was generous in his praise of the legislature, calling this year’s session the most productive one in decades.
“Lawmakers deliberated and debated, offered improvements and ideas. And then, they acted in good faith and for our future. So I thank the members of the 28 Alaska legislature.”
Parnell alluded to three things the legislature accomplished.: getting the state’s fiscal house in order, approving oil tax reform and creating a corporate structure empowered to carry the state’s interest in a natural gas pipeline with the goal of getting Alaska gas to Alaskans first.
The other energy bill Parnell signed into law Tuesday is HB 4, which creates the Alaska Gasline Development Corporation, an independent state corporation that will represent the state’s interest in an all -Alaska gasline with off takes for local communities.
The governor also outlined his fiscal plan for the next five years which includes cuts in state spending that reflects the possibility that the price of Alaska oil can drop.
“Spending that is more the one billion dollars less than the current fiscal year. Legislators stepped up to the budget reductions with me, and we are on a more sustainable path than just a few months ago. Five years from now, we will have saved more than five billion dollars of the people’s money traversing this new, lower level band of spending.”
Parnell also signed Tuesday two additional bills dealing with permitting. HB 129 streamlines the state’s permitting process, and SB27 sets in motion a process that would allow the state to assume primacy over and manage federal wetlands permitting.