Competitive Framework for Alaska: 2012

New "architecture" The PVM Proposal creates a new “architecture” which is not BOE based. The severance feature is simply gross revenue based for oil (after the royalty) and therefore it does not apply to gas. As a result PPT revenues from oil remain the same if also gas is produced. This solves a major deficiency of ACES. Also excessive exploration support is eliminated because: It is proposed to limit tax credits to 20% and not increase tax credits to 40% for certain exploration expenditures, and ● By creating a maximum PPT tax rate of 25% and corporate income tax rate of 41.1%, for a total maximum of 55.75%. 78

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