Parnell Introduces Tax Cuts for In-State Refineries

Shaylon Cochran

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     After getting through all of the security clearances and checks, guests were ushered into the fire station at the Tesoro refinery where Governor Parnell put his signature on the dotted line. Parnell sponsored HB 287, which started out simply enough. It was initially written to extend the contract to sell North Slope royalty oil to the Tesoro refinery in Nikiski. Then some amendments were made that included some tax credits for qualified infrastructure expenditures. That credit could be worth up to $10 million per year for five years, for each refinery. House Speaker Mike Chenault represents the Nikiski area. He says the bill was necessary to keep Alaska refineries open.

     “The royalty issue was the issue that concerned folks in this facility," says Chenault. "We were able to add a couple pieces that were able to help refineries up north. We were proud to work on it, so you can continue your jobs and continue to support the community that you live in.”

     The Tesoro plant in Nikiski and the Petro Star refinery in North Pole are the only two left in the state after Flint Hills closed in May. When that happened, some other last minute changes were made, namely a resolution to provide more subsidies to the remaining refineries, sponsored by Representative Tammie Wilson of North Pole.

     “The resolution is really about the Quality Bank, which is a really important part,” says WIlson.

     The Quality Bank is the system by which refiners connected to the Trans-Alaska Pipeline are charged for the crude oil they take out of the line and then process into another product. The subsidies in Wilson’s resolution help offset what refineries are charged by the Quality Bank.

     “But we know the Quality Bank takes a lot of the profit for them," says WIlson. "So, what this does is that it just directs the Department of Natural Resources and the Governor and everybody else, to make it a formula that works better for what we have here.”

     Rather than actually change the formula, which is up to the Federal Energy Commission, the resolution provides real dollars that make up for the Bank charges. Parnell said before he signed the bill that it leveled the playing field for refineries, and would help spur more investment in them.

     “There’s also a royalty provision in here that enhances the ability for producers to sell to refiners as well," says Parnell. "This bill is just a very important step forward in making sure that we have a more healthy in-state refining industry, lots more jobs for Alaskans, and we provide that level playing field for every company to take advantage of.”

     Parnell signed a few other bills while on the Kenai Tuesday. He started off in the morning at the Snow Shoe Gun Club. In front of a soundtrack of target practice at the club, he signed Senate Bill 77. Sponsored by Senator Peter Micciche, that bill lets the state Board of Game create a special hunting season for Alaskans aged 8-17 to take big game.

     The other bill that became law Tuesday was Representative Paul Seaton’s House Bill 75. It deals with the Pick. Click. Give. program, that allows people who receive a PFD from the state to donate a portion to a non-profit organization.

     “There was one part of the program that said if your budget was more than $250,000 a year, you had to have a certified public accountant audit, which meant that for those groups that were just above that range, they had to spend more to get the audit than they would get in donations,” says Seaton.

     Seaton’s bill removed that requirement completely. This year, Alaskans put $2.7 million of their PFD into non-profit coffers, with an average donation of more than $100.

 

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