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HB 386: "An Act making uniform throughout the state the deadline for certain exploration expenditures used as credits against the production tax on oil and gas produced from a lease or property in the state by extending to July 1, 2010, the deadline for those expenditures on leases or properties located north of 68 degrees, 15 minutes, North latitude."

00                             HOUSE BILL NO. 386                                                                          
01 "An Act making uniform throughout the state the deadline for certain exploration                                        
02 expenditures used as credits against the production tax on oil and gas produced from a                                  
03 lease or property in the state by extending to July 1, 2010, the deadline for those                                     
04 expenditures on leases or properties located north of 68 degrees, 15 minutes, North                                     
05 latitude."                                                                                                              
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. AS 43.55.025(b) is amended to read:                                                                   
08            (b)  To qualify for the production tax credit under (a) of this section, an                                  
09       exploration expenditure must be incurred for work performed on or after July 1, 2003,                             
10       and before July 1, 2010 [2007], except that an exploration expenditure for a Cook Inlet                       
11       prospect must be incurred for work performed on or after July 1, 2005, [AND                                       
12       BEFORE JULY 1, 2010, AND EXCEPT THAT AN EXPLORATION                                                               
13       EXPENDITURE, IN WHOLE OR IN PART, SOUTH OF 68 DEGREES, 15                                                         
01       MINUTES, NORTH LATITUDE, AND NOT PART OF A COOK INLET                                                             
02       PROSPECT MUST BE INCURRED FOR WORK PERFORMED ON OR AFTER                                                          
03       JULY 1, 2003, AND BEFORE JULY 1, 2010,] and                                                                       
04                 (1)  may be for seismic or geophysical exploration costs not connected                                  
05       with a specific well;                                                                                             
06                 (2)  if for an exploration well,                                                                        
07                      (A)  must be incurred by an explorer that holds an interest in the                                 
08            exploration well for which the production tax credit is claimed;                                             
09                      (B)  may be for either an oil or gas discovery well or a dry hole;                                 
10            and                                                                                                          
11                      (C)  must be for goods, services, or rentals of personal property                                  
12            reasonably required for the surface preparation, drilling, casing, cementing,                                
13            and logging of an exploration well, and, in the case of a dry hole, for the                                  
14            expenses required for abandonment if the well is abandoned within 18 months                                  
15            after the date the well was spudded;                                                                         
16                 (3)  may not be for testing, stimulation, or completion costs;                                          
17       administration, supervision, engineering, or lease operating costs; geological or                                 
18       management costs; community relations or environmental costs; bonuses, taxes, or                                  
19       other payments to governments related to the well; or other costs that are generally                              
20       recognized as indirect costs or financing costs; and                                                              
21                 (4)  may not be incurred for an exploration well or seismic exploration                                 
22       that is included in a plan of exploration or a plan of development for any unit on                                
23       May 13, 2003.