Signed by Governor Sean Parnell

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that authorizes tax credits for in-state refineries.

Highlights:

• Authorizes an individual who owns an in-state oil refinery to claim a tax credit for a tax year between December 31, 2014 and January 1, 2020 of the lesser of the following amounts (Sec. 3):
• A tax credit of 40 percent of the individual’s “qualified infrastructure expenditures” incurred in the state during the tax year; or
• A tax credit of $10 million for each in-state refinery for which “qualified infrastructure expenditures” are incurred.

• Defines “qualified infrastructure expenditure” as an expenditure for the in-state purchase, installation, or modification of tangible personal property for the in-state manufacture or transport of refined petroleum products, or petroleum-based feedstock (Sec. 3).

• Authorizes an individual whose tax credit is greater than his or her tax liability to request a refund in the amount of the unused tax credit, or carry forward any unused portion of the tax credit to the next 5 tax years (Sec. 3).

• Specifies that the tax liability of an individual who claims the tax credit and whose oil refinery ceases commercial operation during the 9 years after the tax credit is claimed will increase to the total amount of credit taken multiplied by a fraction based on the number of years the refinery continued to operate (Sec. 3).

• Authorizes the Commissioner of the Department of Natural Resources to enter into an agreement with a state oil lessee in which the commissioner will accept, in the place of royalties, an alternative amount that is not less than the price established in a contract between the lessee and an in-state refiner but not greater than the amount that would otherwise be due under the lease (Sec. 2). 

• Approves and ratifies the agreement for the sale of royalty oil to Tesoro Corporation and Tesoro Refining and Marketing Company LLC (Sec. 6).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that authorizes tax credits for in-state oil refineries.

Highlights:

• Authorizes an individual who owns an in-state oil refinery to claim a tax credit for a tax year between December 31, 2014 and January 1, 2020 of the lesser of the following amounts (Sec. 3):
• A tax credit of 40 percent of the individual’s “qualified infrastructure expenditures” incurred in the state during the tax year; or
• A tax credit of $10 million for each in-state refinery for which “qualified infrastructure expenditures” are incurred.

• Defines “qualified infrastructure expenditure” as an expenditure for the in-state purchase, installation, or modification of tangible personal property for the in-state manufacture or transport of refined petroleum products, or petroleum-based feedstock (Sec. 3).

• Authorizes an individual whose tax credit is greater than his or her tax liability to request a refund in the amount of the unused tax credit, or carry forward any unused portion of the tax credit to the next 5 tax years (Sec. 3).

• Specifies that the tax liability of an individual who claims the tax credit and whose oil refinery ceases commercial operation during the 9 years after the tax credit is claimed will increase to the total amount of credit taken multiplied by a fraction based on the number of years the refinery continued to operate (Sec. 3).

• Authorizes the Commissioner of the Department of Natural Resources to enter into an agreement with a state oil lessee in which the commissioner will accept, in the place of royalties, an alternative amount that is not less than the price established in a contract between the lessee and an in-state refiner but not greater than the amount that would otherwise be due under the lease (Sec. 2). 

• Approves and ratifies the agreement for the sale of royalty oil to Tesoro Corporation and Tesoro Refining and Marketing Company LLC (Sec. 6).

Full Bill Text