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Image courtesy of Roger H. Goun/Flickr.

Voters in Alaska will have a chance next Tuesday to keep a new law that cuts taxes on oil production in the state.

The tax breaks could be worth as much as $1 billion annually to producers including Conoco Phillips, BP and Exxon Mobil depending on prices, Reuters said Wednesday.

The law, called the More Alaska Production Act (MAPA), repealed the progressive tax implemented by former Governor Sarah Palin.

Palin’s tax started at 25 percent and rose to as much as 75 percent as oil prices increased.

MAPA replaced that system with a 35 percent flat tax.

Supporters and lawmakers say that MAPA will increase revenues by encouraging investment and new drilling projects.

Opponents argue that the state will lose revenues in the long run.

Oil revenues make up about 90 percent of the state’s unrestricted general fund revenues, the Alaska Journal of Commerce said.

If MAPA is repealed lawmakers said they will draft a new version of the law to put the tax breaks back in place.

“We believe it’s important for continued oil and gas development in Alaska, where we have identified and are actively developing opportunities for growth,” Conoco’s Executive Vice President for Exploration and Production Matt Fox told analysts last month.

The vote will be held on August 19 along with the state’s primary elections.