With Alaska oil production declining at roughly six percent each year, Governor Parnell saw a brighter future for Alaska. He envisioned a future of more oil production, more opportunity, and more economic growth that generations of Alaskans would benefit from. He sought to spur an Alaskan comeback to attract new investment to Alaska’s oil patch, and also rebalance the tax credit system to ensure Alaska’s treasury was protected at low oil prices.
Governor Parnell signed the More Alaska Production Act into law on May 21, 2013.
The MAP Act uses these four guiding principles:
It is Fair to present and future generations of Alaskans.
- Increase in base rate provides fair and stable revenue stream for Alaskans.
- Cuts the billion dollar risk to Alaskans’ treasury by reducing capital tax credit payments.
- Creates real minimum tax on legacy oil production.
It Drives New Production, growing economic opportunity for Alaskans.
- Ties tax relief to new oil production, not merely to an increase in company spending.
- The MAP Act incentivizes more production with a per barrel credit and a Gross Revenue Exclusion (GRE) for new oil.
It is Simple with a Balanced fiscal impact across all oil prices.
- Generates more revenues for the State treasury at low oil prices, while keeping Alaska competitive at high prices.
- Tax credit system is now based on the production of oil, not simply on company spending.
It is Competitive, benefiting Alaskans for the Long Term.
- The MAP Act already benefits Alaskans with recently announced new investments.
- Eliminates excessive progressivity, making Alaska competitive with other oil-producing jurisdictions.
- Investments today will lead to more production, jobs and revenues tomorrow, benefiting generations to come.