|The 27th Alaska State Legislature, 2011 - 2012|
Oil/ Gas Prod. Tax Credits/ Rates/ Value
|Sponsored by Rep. Thompson, Rep. Dick, Rep. Millett, Rep. Tuck, Rep. Miller|
Co-Sponsors: Rep. Wilson, Rep. Kawasaki, Rep. Feige, Rep. Joule, Rep. Edgmon, Rep. Guttenberg, Rep. Johnson, Rep. Thomas, Rep. Olson, 0, Sen. Meyer, Sen. Paskvan, Sen. McGuire, Sen. Wagoner, Sen. Wielechowski, Sen. French, Sen. Kookesh, Sen. Ellis
“An Act relating to the oil and gas production tax; providing for a reduction in the production tax value of a producer in the amount of 30 percent of the gross value at the point of production for oil and gas produced from certain leases or properties north of 68 degrees North latitude that were not, as of January 1, 2008, in commercial production or within a unit; providing for a credit against the oil and gas production tax for costs incurred for conducting seismic exploration and drilling certain oil or natural gas exploration wells in certain basins; relating to the determination of the production tax value of oil and gas production; providing that the tax rate for new oil or gas production south of 68 degrees North latitude and outside of the Cook Inlet sedimentary basin may not exceed four percent of the gross value at the point of production; and providing for an effective date.”
Posted: March 23, 2012 : v27-LS1193-E
HB 276 is designed to attract exploration drilling and seismic exploration in certain remote areas of Alaska that show a promise of holding hydrocarbons, but are underexplored yet located in close proximity to communities in need of a local energy source. Due to complications and costs associated with accessing and developing these remote locations, they have remained unexplored or underexplored and provided scant geological information to either the state or possible investors. At a time when economic growth and development in many regions of Alaska are crippled by high energy prices and the lack of reliable energy supplies, this legislation will provide needed encouragement to independent companies and landowners otherwise hesitant to invest in exploration projects near energy challenged communities. For example, the Fairbanks community spends over $660 million per year on space heating, yet is located just 50 miles away from the Nenana Basin, a geologic basin that has shown strong potential to be a source for oil and gas. All that is needed to develop this potential resource is investors. Like tax credits use in other regions in the state, HB 276 tax credits for frontier basins will attract those needed investors.
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