Alaska Gov. Sean Parnell signed legislation Friday reducing Alaska's cruise passenger head tax from $46 per head to $34.50.

In return, the Alaska Cruise Association will drop its lawsuit against the state calling for a reversal of the tax.

In support of Parnell's decision, Carnival Corp. Chairman Micky Arison wrote a letter to Parnell thanking him for signing the bill, and calling it "an important step in your pledge to improve the climate for cruise line business in Alaska. I am certain that it would not have been approved by the legislature without your direct involvement."

Arison added that the industry recognizes and appreciates establishing regulations that protect the environment of Alaska "but don’t single out cruise ships for unreasonable standards that don’t apply to any others."

He also wrote that the industry was "encouraged that you were successful in increasing the budget for marketing Alaska as a travel destination."

"We are hopeful that this, combined with increased marketing will stimulate a return to growth in cruising in Alaska," Arison said.

A statement on the governor's website said that Senate Bill 312 would reverse the decline in visitor travel that has been a focus of the Parnell administration.

"I remain committed to helping Alaska regain its former position as a growing and vibrant destination," Parnell said. "Passage of this bill sends a clear message that Alaska values visitors and tourism investment. Alaska’s families, businesses and communities are better positioned now for tourism growth."

The statement noted that after many years of growth, Alaska experienced a sharp decline in visitation in 2009 and again in 2010, when the state lost more than 260,000 visitors, $420 million in direct and indirect spending, and up to 5,000 Alaska jobs.

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