HB 200: "An Act providing for oil and gas exploration incentive credits for certain activities on certain land in the state; and providing for an effective date."
00HOUSE BILL NO. 200 01 "An Act providing for oil and gas exploration incentive credits for certain 02 activities on certain land in the state; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 41 is amended by adding a new chapter to read: 05 CHAPTER 09. OIL AND GAS EXPLORATION INCENTIVE CREDITS. 06 Sec. 41.09.100. EXPLORATION INCENTIVE CREDITS. (a) Under an 07 incentive program distinct from the exploration incentive credit authorized by 08 AS 38.05.180(i), the commissioner may extend to a qualified applicant an exploration 09 incentive credit for each of the following activities performed on land in the state, 10 regardless of whether the land is state-owned land: 11 (1) geophysical work on land that is not subject to a credit under 12 AS 38.05.180(i); 13 (2) drilling a stratigraphic test well; and 14 (3) drilling an exploratory well.
01 (b) An exploration incentive credit extended under (a) of this section may be 02 applied against 03 (1) a payment or obligation against which a credit authorized by 04 AS 38.05.180(i) may be claimed; 05 (2) taxes payable under AS 43.20; and 06 (3) oil and gas bonus payments due the state under AS 38.05.180(f). 07 (c) An exploration incentive credit may be extended under (a) of this section 08 to a qualified applicant if 09 (1) application for the exploration incentive credit is made by the 10 qualified applicant to the commissioner and is approved before drilling or geophysical 11 work commences; 12 (2) all geophysical work is performed, and all stratigraphic test wells 13 or exploratory wells are drilled, after the effective date of this section and before 14 July 1, 2003; and 15 (3) copies of all raw and processed data derived from drilling a 16 stratigraphic test well or exploratory well or performing geophysical work are provided 17 by the qualified applicant to the commissioner within 30 days after the completion, 18 abandonment, or suspension of the well or completion of the geophysical work. 19 (d) Data derived from drilling a stratigraphic test well or exploratory well that 20 is provided to the commissioner under (c)(3) of this section shall be kept confidential 21 for 24 months after receipt by the commissioner unless the owner of the well gives 22 written permission to the state to release the well data at an earlier date. The 23 provisions of AS 38.05.035(a)(9)(C) apply to other data provided to the commissioner 24 under (c)(3) of this section, except that the commissioner, under appropriate 25 confidentiality provisions and without preference or discrimination, may display to all 26 interested third parties, but may not distribute or transfer in hard copy or electronic 27 form, those data with respect to all land if the commissioner determines that the 28 limited disclosure is necessary to further the interest of the state in evaluating or 29 developing its land. 30 (e) The amount of an exploration incentive credit extended under (a) of this 31 section is determined by the commissioner and must be based on eligible costs,
01 approved by the commissioner, of performing geophysical work, drilling a stratigraphic 02 test well, and drilling an exploratory well. The amount of an exploration incentive 03 credit may not exceed 50 percent of eligible costs relating to activities performed on 04 state-owned land and 25 percent of eligible costs relating to activities performed on 05 land in the state not owned by the state. 06 (f) The amount of an exploration incentive credit extended under (a) of this 07 section may not exceed $5,000,000 per eligible project, as defined by the 08 commissioner by regulation. The total of all credits extended by the commissioner 09 under (a) of this section may not exceed $50,000,000. 10 (g) An exploration incentive credit must be used within five years after it is 11 extended under (a) of this section, and may be assigned by the qualified applicant to 12 any other person for the purposes described in (b) of this section. 13 (h) Amounts due the permanent fund under AS 37.13.010 shall be calculated 14 before the application of a credit extended under (a) of this section. 15 Sec. 41.09.170. REGULATIONS. The commissioner may adopt regulations 16 necessary to implement AS 41.09.100 - 41.09.190. 17 Sec. 41.09.180. RELATIONSHIP TO AS 38.05. Nothing in AS 41.09.100 - 18 41.09.190 affects the exploration incentive credit system provided for in 19 AS 38.05.180(i). 20 Sec. 41.09.190. DEFINITIONS. In AS 41.09.100 - 41.09.190, 21 (1) "eligible costs" means those direct costs incurred for activities in 22 support of an exploration program, based upon the footage drilled or miles surveyed, 23 that are reasonable in amount for the area of the state in which a well is drilled or 24 geophysical activity is conducted; 25 (2) "exploratory well" means a well drilled for the purpose of oil and 26 gas exploration that is 27 (A) located three or more miles from another well drilled for 28 oil and gas, with all distances measured as the horizontal distance between 29 exploration targets (bottom hole distance); or 30 (B) within three miles of a well drilled for oil and gas, but tests 31 potential hydrocarbon traps that the commissioner, after analyzing evidence
01 submitted by the qualified applicant and any other information, determines 02 constitute a distinctly separate exploration target; 03 (3) "geophysical work" 04 (A) means all geophysical data gathering methods used in 05 hydrocarbon exploration; 06 (B) includes seismic, gravity, magnetic, and electromagnetic 07 measurements; 08 (4) "qualified applicant" means 09 (A) a natural person who is at least 18 years of age; 10 (B) a corporation qualified to do business in Alaska; 11 (C) a legal guardian or trustee of a qualified natural person 12 described in (A) of this paragraph; 13 (D) any association of persons listed in (A) - (C) of this 14 paragraph; 15 (5) "stratigraphic test well" means a well that is not intended to 16 encounter an oil or gas accumulation and that is drilled to a sufficient depth to measure 17 the geological, geophysical, and engineering parameters used for determining an area's 18 oil and gas potential. 19 * Sec. 2. REGULATIONS. The commissioner of natural resources may proceed to adopt 20 regulations necessary to implement this Act. The regulations take effect under the 21 Administrative Procedure Act (AS 44.62), but not before the effective date of sec. 1 of this 22 Act. 23 * Sec. 3. Section 2 of this Act takes effect immediately under AS 01.10.070(c).