New Legislation Would Replenish Permanent Fund in Times of Profit
February 23, 2016
On Monday, Senator Bill Wielechowski (D-Anchorage) introduced SB188, the Protect the Permanent Fund Dividend Act, which would require that any funds appropriated out of the Earnings Reserve Account of the Permanent Fund, with the exception of those used for inflation proofing or issuing PFD checks, must be repaid. This repayment would come from a progressivity surcharge on oil production in times of windfall oil profits.
The next time that per barrel profits exceed $20 per barrel, the surcharge would kick in, increasing the tax rate by .3% for every dollar over the $20 profit. This progressivity surcharge would apply only to the three largest and most profitable fields in Alaska – Prudhoe Bay, Kuparuk, and the Colville River Unit.
“There are many proposals being considered by the legislature that contain provisions for accessing the earnings reserve of the Permanent Fund to balance the budget,” said Senator Wielechowski. “If funds are appropriated from the earnings reserve, future dividends will be diminished. Each time oil prices drop, the Permanent Fund becomes a target. This bill would make sure that when oil companies profit, Alaskans profit too.”
“The Permanent Fund belongs to the people of Alaska.” said Sen. Wielechowski. “We continually hear from Alaskans how much they rely upon and value the Permanent Fund Dividend they receive each year. We must think very hard before taking the dividends that families rely on without some plan to repay the fund when oil prices are up and companies are reaping massive profits in the future.”
Edited by Mary Kauffman, SitNews
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