Legislature(2005 - 2006)
2006-08-05 House Journal
Full Journal pdf2006-08-05 House Journal Page 4304 HB 3001 CSHB 3001(FIN) was before the House in second reading for amendments (page 4292). Amendment No. 2 was offered by Representatives Kerttula, Gara, and Guttenberg: 2006-08-05 House Journal Page 4305 Page 8, line 17: Delete "AS 43.55.023(k)" Insert "AS 43.55.023(l)" Page 12, line 16: Delete "A" Insert "Except as provided in (k) of this section, a" Page 15, line 26, following "section,": Insert "and except as provided in (k) of this section," Page 16, following line 31: Insert a new subsection to read: "(k) A person engaged in the production of gas in the Point Thomson Unit may not take a credit under this section for a qualified capital expenditure upstream from the point of production of gas from the Point Thomson Unit for a gas processing plant or a gas treatment facility. In this subsection, "Point Thomson Unit" means the land identified by the Department of Natural Resources as the "Point Thomson Unit."" Reletter the following subsection accordingly. Page 32, line 29, following "AS 38.05.132": Insert "; (19) costs related to a gas processing plant or a gas treatment facility upstream from the point of production of gas from the Point Thomson Unit" Page 33, following line 25: Insert a new paragraph to read: "(3) "Point Thomson Unit" means the land identified by the Department of Natural Resources as the "Point Thomson Unit";" 2006-08-05 House Journal Page 4306 Renumber the following paragraph accordingly. Representative Kerttula moved and asked unanimous consent that Amendment No. 2 be adopted. Representative Samuels objected. Representative Kerttula placed a call of the House and lifted the call. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: CSHB 3001(FIN) Second Reading Amendment No. 2 YEAS: 13 NAYS: 27 EXCUSED: 0 ABSENT: 0 Yeas: Berkowitz, Cissna, Crawford, Croft, Gara, Gardner, Gruenberg, Guttenberg, Joule, Kapsner, Kerttula, Moses, Salmon Nays: Anderson, Chenault, Coghill, Dahlstrom, Elkins, Foster, Gatto, Harris, Hawker, Holm, Kelly, Kohring, Kott, LeDoux, Lynn, McGuire, Meyer, Neuman, Olson, Ramras, Rokeberg, Samuels, Seaton, Stoltze, Thomas, Weyhrauch, Wilson And so, Amendment No. 2 was not adopted. Amendment No. 3 was offered by Representatives Kerttula, Gara, and Guttenberg: Page 15, line 28, following "expenditures": Insert "made during each April 1 through March 31 12-month period that exceeded the 12-month average expenditures for the two 12-month periods immediately before April 1, 2006, that" 2006-08-05 House Journal Page 4307 Page 15, line 29, following "April 1, 2006,": Insert "and" Page 15, line 30: Delete "the sum" Insert "that portion" Page 15, line 31, following "April 1, 2006,": Insert "during each 12-month period multiplied by a fraction in which the numerator is the amount of transitional investment expenditures during that 12-month period and the denominator is the total expenditures incurred during that 12-month period that would be qualified capital expenditures if they were incurred after March 31, 2006," Page 16, lines 3 - 4: Delete ", that would be qualified capital expenditures, if they were incurred after March 31, 2006" Representative Kerttula moved and asked unanimous consent that Amendment No. 3 be adopted. Representative Kelly objected. Representative Samuels rose to a point of order. The Speaker cautioned members to confine remarks to the amendment. The question being: "Shall Amendment No. 3 be adopted?" The roll was taken with the following result: CSHB 3001(FIN) Second Reading Amendment No. 3 YEAS: 14 NAYS: 26 EXCUSED: 0 ABSENT: 0 Yeas: Berkowitz, Cissna, Crawford, Croft, Gara, Gardner, Gruenberg, Guttenberg, Joule, Kapsner, Kerttula, McGuire, Moses, Salmon 2006-08-05 House Journal Page 4308 Nays: Anderson, Chenault, Coghill, Dahlstrom, Elkins, Foster, Gatto, Harris, Hawker, Holm, Kelly, Kohring, Kott, LeDoux, Lynn, Meyer, Neuman, Olson, Ramras, Rokeberg, Samuels, Seaton, Stoltze, Thomas, Weyhrauch, Wilson And so, Amendment No. 3 was not adopted. Amendment No. 4 was offered by Representatives Kerttula, Gara, and Guttenberg: Page 1, line 1, following "Act" (title amendment): Insert "amending the powers and duties of the Alaska Oil and Gas Conservation Commission;" Page 2, following line 8: Insert a new bill section to read: "* Sec. 2. AS 31.05.030(d) is amended to read: (d) The commission may require (1) identification of ownership of wells, producing leases, tanks, plants, and drilling structures; (2) the making and filing of reports, well logs, drilling logs, electric logs, lithologic logs, directional surveys, and all other subsurface information on a well drilled for oil or gas, or for the discovery of oil or gas, or for geologic information, and the required reports and information shall be filed within 30 days after the completion, abandonment, or suspension of the well; (3) the drilling, casing, and plugging of wells in a manner that will prevent the escape of oil or gas out of one stratum into another, the intrusion of water into an oil or gas stratum, the pollution of fresh water supplies by oil, gas, or salt water, and prevent blowouts, cavings, seepages and fires; (4) the furnishing of a reasonable bond with sufficient surety conditions for the performance of the duty to plug each dry or abandoned well or the repair of wells causing waste; (5) the operation of wells with efficient gas-oil and water-oil ratios, and may fix these ratios; (6) the gauging or other measuring of oil and gas to determine the quality and quantity of oil and gas; 2006-08-05 House Journal Page 4309 (7) every person who produces oil or gas in the state to keep and maintain for a period of five years in the state complete and accurate records of the quantities of oil and gas produced, which shall be available for examination by the Department of Natural Resources or its agents at all reasonable times; (8) the measuring and monitoring of oil and gas pool pressures; (9) the filing and approval of a plan of development and operation for a field or pool in order to prevent waste, ensure [INSURE] a greater ultimate recovery of oil and gas, and protect the correlative rights of persons owning interests in the tracts of land affected; (10) working interest owners to provide, at cost plus a reasonable rate of return determined under regulations adopted by the commission and without causing substantial injury to the owner, access by or for the benefit of others to production and other facilities whenever necessary; for purposes of this paragraph, the commission's regulations must be consistent with the standards of the Regulatory Commission of Alaska adopted to implement AS 42.05.311(a); the commission may act under this paragraph (A) to (i) maximize the economic and physical recovery of the state's oil and gas resources; (ii) maximize competition among parties seeking to explore and develop the state's oil and gas resources; (iii) minimize the adverse affects of exploration, development, production, and transportation activity; or (iv) otherwise protect the best interest of the state; (B) only if the commission finds that directing the working interest owner to provide access by or for the benefit of others would not materially interfere with the owner's paramount use of the facility; and (C) only if the commission finds that the facility has excess capacity or that it is feasible to expand the facility with the expansion costs and any additional operating costs to be borne by the entities that use the 2006-08-05 House Journal Page 4310 added capacity in proportion to the amount of use by each entity." Renumber the following bill sections accordingly. Renumber internal references to bill sections in accordance with this amendment. Bill sec. 2, added in this amendment, should not be set out in any of the internal bill section references. Below are all internal bill section references in this bill to be renumbered: Page 1, line 9 Page 2, line 5 Page 40, lines 9, 10, 12, 13, 17, 19, 24, and 31 Page 41, lines 3, 9, 11, 18, 21, 27, and 28 Page 42, lines 3, 6, 7, 9, 15, and 16 Page 43, lines 3 and 4 Representative Kerttula moved and asked unanimous consent that Amendment No. 4 be adopted. Representative Chenault objected. The question being: "Shall Amendment No. 4 be adopted?" The roll was taken with the following result: CSHB 3001(FIN) Second Reading Amendment No. 4 YEAS: 14 NAYS: 25 EXCUSED: 0 ABSENT: 1 Yeas: Berkowitz, Cissna, Crawford, Croft, Gara, Gardner, Gruenberg, Guttenberg, Joule, Kapsner, Kerttula, Moses, Salmon, Thomas Nays: Anderson, Chenault, Coghill, Dahlstrom, Elkins, Foster, Gatto, Harris, Hawker, Holm, Kelly, Kohring, Kott, LeDoux, Lynn, McGuire, Neuman, Olson, Ramras, Rokeberg, Samuels, Seaton, Stoltze, Weyhrauch, Wilson Absent: Meyer And so, Amendment No. 4 was not adopted. 2006-08-05 House Journal Page 4311 Amendment No. 5 was offered by Representatives Kerttula, Gara, Berkowitz, Guttenberg, and Crawford: Page 32, lines 21 - 27: Delete all material and insert: "(17) costs incurred for containment, control, cleanup, or removal in connection with any unpermitted release of oil or a hazardous substance; any liability for damages, fines, and penalties imposed on the producer or explorer; or the cost of developing and maintaining an oil discharge prevention and contingency plan under AS 46.04.030;" Representative Kerttula moved and asked unanimous consent that Amendment No. 5 be adopted. Representative Weyhrauch objected. Representative Croft placed a call of the House on the calendar. The call was satisfied. The question being: "Shall Amendment No. 5 be adopted?" The roll was taken with the following result: CSHB 3001(FIN) Second Reading Amendment No. 5 YEAS: 14 NAYS: 26 EXCUSED: 0 ABSENT: 0 Yeas: Berkowitz, Cissna, Crawford, Croft, Gara, Gardner, Gruenberg, Guttenberg, Joule, Kapsner, Kerttula, Moses, Salmon, Thomas Nays: Anderson, Chenault, Coghill, Dahlstrom, Elkins, Foster, Gatto, Harris, Hawker, Holm, Kelly, Kohring, Kott, LeDoux, Lynn, McGuire, Meyer, Neuman, Olson, Ramras, Rokeberg, Samuels, Seaton, Stoltze, Weyhrauch, Wilson And so, Amendment No. 5 was not adopted. Amendment No. 6 was offered by Representatives Gardner and Crawford: 2006-08-05 House Journal Page 4312 Page 2, following line 8: Insert a new subsection to read: "(c) It is the intent of the legislature that all provisions in this bill sunset on June 30, 2009 unless reenacted by law between January 1 and June 30, 2009. Upon the sunset of this law, statutory language shall revert to that which was in place prior to passage of the law, and be replaced with the following:" ""An Act relating to the oil and gas properties production tax; providing for a reduction in the amount of taxable production; providing for an increase in the tax rate when the average Alaska North Slope crude oil West Coast price per barrel exceeds $40; providing for tax credits based on expenditures for oil and gas exploration, gas only exploration, and development wells; and providing for an effective date." BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: * Section 1. AS 43.55.011(a) is amended to read: (a) There is levied upon the producer of oil a tax for all oil produced from each lease or property in the Cook Inlet sedimentary basin [STATE], less any oil the ownership or right to which is exempt from taxation or constitutes a land owner's royalty interest. The tax is equal to either the percentage-of-value amount calculated under (b) of this section or the cents-per-barrel amount calculated under (c) of this section, whichever is greater, multiplied by the economic limit factor determined for the oil production of the lease or property under AS 43.55.013. If the amounts calculated under (b) and (c) of this section are equal, the amount calculated under (b) of this section shall be treated as if it were the greater for purposes of this section. * Sec. 2. AS 43.55.011(b) is amended to read: (b) The percentage-of-value amount equals [12.25 PERCENT OF THE GROSS VALUE AT THE POINT OF PRODUCTION OF TAXABLE OIL PRODUCED ON OR BEFORE JUNE 30, 1981, FROM THE LEASE OR PROPERTY AND] 15 percent of the gross value at the point of production of taxable oil produced from the lease or property in the Cook Inlet sedimentary basin, [AFTER JUNE 30, 1981;] except that [FOR A LEASE OR PROPERTY COMING INTO COMMERCIAL OIL PRODUCTION AFTER JUNE 30, 1981,] the percentage-of- 2006-08-05 House Journal Page 4313 value amount equals 12.25 percent of the gross value at the point of production of taxable oil produced from the lease or property in the Cook Inlet sedimentary basin in the first five years after the start of commercial oil production [AND EQUALS 15 PERCENT OF THE GROSS VALUE AT THE POINT OF PRODUCTION OF TAXABLE OIL PRODUCED THEREAFTER FROM THE LEASE OR PROPERTY]. * Sec. 3. AS 43.55.011(c) is amended to read: (c) The cents-per-barrel amount equals [$0.60 PER BARREL OF TAXABLE OLD CRUDE OIL PRODUCED FROM THE LEASE OR PROPERTY, AND] $0.80 per barrel for all [OTHER] taxable oil produced from the lease or property, [BOTH] as adjusted by AS 43.55.012. * Sec. 4. AS 43.55.011 is amended by adding new subsections to read: (e) There is levied upon the producer of oil a tax for all oil produced from each lease or property in the state outside of the Cook Inlet sedimentary basin, less any oil the ownership or right to which is exempt from taxation or constitutes a land owner's royalty interest. The tax is equal to the greater of (1) the cents-per-barrel amount calculated under (c) of this section; or (2) the percentage-of-value amount calculated under (f) of this section plus the tax determined under (g) of this section. (f) The percentage-of-value amount equals 15 percent of the gross value at the point of production of taxable oil produced from the lease or property in the state outside of the Cook Inlet sedimentary basin, as adjusted under AS 43.55.022. (g) In addition to the taxes levied using the percentage-of- value amount under (e) of this section, if the average ANS West Coast price per barrel of oil during a month exceeds $40, there is levied on the producer of oil a tax for oil produced during that month from each lease or property in the state outside of the Cook Inlet sedimentary basin, less any oil the ownership or right to which is exempt from taxation. The tax levied under this subsection is equal to [([ANS West Coast price - 40] x .003) x (ANS wellhead price x .85)] x (total taxable barrels of oil at the point of production) where "ANS wellhead price" means the prevailing value for oil 2006-08-05 House Journal Page 4314 produced in the Alaska North Slope area. (h) For purposes of (g) of this section, the department may calculate the average price or may, by regulation, specify the method by which the average price shall be calculated with reference to one or more published sources of price information. If, in the department's judgment, reliable published sources of price information on Alaska North Slope crude oil cease, or appear likely to soon cease, to be available, or if, in the department's judgment, the price of Alaska North Slope crude oil ceases, or appears likely to soon cease, to be a reliable indicator of the general price level of crude oils, the department shall, by regulation, specify a substitute formula for computing the oil price index. The substitute formula specified by the department under this subsection must bear, as nearly as is reasonably possible, the same relationship to the general price level of crude oils as did the price of Alaska North Slope crude oil. (i) There is levied on the producer of oil or gas a tax for all oil and gas produced each month from each lease or property in the state the ownership or right to which constitutes a landowner's royalty interest, except for oil and gas the ownership or right to which is exempt from taxation. The provisions of this subsection apply to a landowner's royalty interest as follows: (1) the rate of tax levied on oil is equal to five percent of the gross value at the point of production of the oil; (2) the rate of tax levied on gas is equal to 1.667 percent of the gross value at the point of production of the gas; (3) if the department determines that, for purposes of reducing the producer's tax liability under (1) or (2) of this subsection, the producer has received or will receive consideration from the royalty owner offsetting all or a part of the producer's royalty obligation, other than a deduction under AS 43.55.020(d) of the amount of a tax paid, (A) notwithstanding (1) of this subsection, the tax is equal to (i) for oil that is produced from a lease or property in the Cook Inlet sedimentary basin, five percent of the gross value at the point of production of the oil; (ii) for oil, except oil described in (i) of this subparagraph, 22.8 percent of the gross value at the point of production of the oil; and 2006-08-05 House Journal Page 4315 (B) notwithstanding (2) of this subsection, for gas the tax is equal to 11.25 percent of the gross value at the point of production of the gas. * Sec. 5. AS 43.55.013(j) is amended to read: (j) The department may aggregate two or more leases or properties (or portions of them), for purposes of determining economic limit factors under this section and applying them to AS 43.55.011(a) and 43.55.016(a) [AS 43.55.011 OR AS 43.55.016], when economically interdependent oil or gas production operations are not confined to a single lease or property. The department may also segregate a lease or property into two or more parts, for purposes of determining economic limit factors under this section and applying them under AS 43.55.011(a) and 43.55.016(a) [AS 43.55.011 OR AS 43.55.016], when two or more economically independent oil or gas production operations are being conducted on it, or when old crude oil is produced from the same lease or property as other oil. * Sec. 6. AS 43.55.016(a) is amended to read: (a) There is levied upon the producer of gas a tax for all gas produced from each lease or property in the Cook Inlet sedimentary basin [STATE], less any gas the ownership or right to which is exempt from taxation. The tax is equal to either the percentage-of-value amount calculated under (b) of this section or the cents-per-Mcf amount calculated under (c) of this section, whichever is greater, multiplied by the economic limit factor determined for gas production of the lease or property under AS 43.55.013. If the amounts calculated under (b) and (c) of this section are equal, the amount calculated under (b) of this section shall be treated as if it were the greater for purposes of this section. * Sec. 7. AS 43.55.016(b) is amended to read: (b) The percentage-of-value amount equals 10 percent of the gross value at the point of production of the taxable gas produced from the lease or property in the Cook Inlet sedimentary basin. * Sec. 8. AS 43.55.016 is amended by adding new subsections to read: (d) There is levied upon the producer of gas a tax for all gas produced from each lease or property in the state outside of the Cook Inlet sedimentary basin, less any gas the ownership or right 2006-08-05 House Journal Page 4316 to which is exempt from taxation. The tax is equal to either the cents-per-Mcf amount calculated under (c) of this section or the percentage-of-value amount calculated under (e) of this section, whichever is greater. If the amounts calculated under (c) and (e) of this section are equal, the amount calculated under (e) of this section shall be treated as if it were the greater for purposes of this section. (e) The percentage-of-value amount equals 10 percent of the gross value at the point of production of the taxable gas produced from the lease or property in the state outside of the Cook Inlet sedimentary basin, as adjusted under AS 43.55.022. * Sec. 9. AS 43.55 is amended by adding a new section to read: Sec. 43.55.022. Production deduction. (a) A producer of oil subject to tax using the percentage-of-value amount in AS 43.55.011(f) and a producer of gas using the percentage-of- value amount in AS 43.55.016(e) may take a deduction against the gross value at the point of production as provided in this section before applying the percentage-of-value tax rate. (b) Each operating unit in the state may reduce the volume of taxable oil and gas produced from the operating unit by 7,500 barrels of oil equivalent for each day during which oil or gas is produced from the operating unit. The lessees who are producers having leases within an operating unit shall allocate the reduction proportionately to the production in barrels of oil equivalent of oil and gas produced from the unit and to each producer of oil and gas in proportion to the interest of the producer in the oil and gas produced from the unit. (c) Each producer of oil and each producer of gas may deduct the value of the producer's pro rata share of the reduction provided for in (b) of this section from the gross value at the point of production of oil and the gross value at the point of production of gas produced from the unit before applying the applicable percentage-of-value tax rate. (d) The department may adopt regulations providing for the allocation of the barrels of oil equivalent production deduction within an operating unit between the oil and gas produced and between producers having an interest in the oil and gas produced from the operating unit. (e) In this section, (1) "barrel of oil equivalent" means, 2006-08-05 House Journal Page 4317 (A) one barrel, in the case of oil; (B) the amount of gas that has an energy content of 6,000,000 British thermal units, in the case of gas; (2) "operating unit" means all or part of an oil or gas pool, field, or like area that is the subject of a cooperative or unit plan adopted or operated that is approved by the commissioner of natural resources under AS 38.05.180(p). * Sec. 10. AS 43.55.025(a) is amended to read: (a) Subject to the terms and conditions of this section, on oil and gas produced on or after July 1, 2004, from an oil and gas lease, or on gas produced from a gas only lease, a credit against the production tax due under this chapter is allowed for (1) exploration expenditures that qualify under (b) of this section in an amount equal to one of the following: (A) 50 [(1) 20] percent of the total exploration expenditures that qualify only under (b) and (c) of this section; (B) 50 [(2) 20] percent of the total exploration expenditures for work performed before July 1, 2007, and that qualify only under (b) and (d) of this section; (C) 60 [(3) 40] percent of the total exploration expenditures that qualify under (b), (c), and (d) of this section; or (D) 60 [(4) 40] percent of the total exploration expenditures that qualify only under (b) and (e) of this section; and (2) 25 percent of the actual expenditures directly related to the drilling of a development well, excluding expenditures related to corporate overhead or for facilities other than the development well. * Sec. 11. AS 43.55.025(b) is amended to read: (b) To qualify for the production tax credit under (a) of this section, an exploration expenditure must be incurred for work performed on or after July 1, 2003, and before July 1, 2016 [2007], except that an exploration expenditure for a Cook Inlet prospect must be incurred for work performed on or after July 1, 2005, [AND BEFORE JULY 1, 2010, AND EXCEPT THAT AN EXPLORATION EXPENDITURE, IN WHOLE OR IN PART, SOUTH OF 68 DEGREES, 15 MINUTES, NORTH LATITUDE, AND NOT PART OF A COOK INLET PROSPECT MUST BE 2006-08-05 House Journal Page 4318 INCURRED FOR WORK PERFORMED ON OR AFTER JULY 1, 2003, AND BEFORE JULY 1, 2010,] and (1) may be for seismic or geophysical exploration costs not connected with a specific well; (2) if for an exploration well, (A) must be incurred by an explorer that holds an interest in the exploration well for which the production tax credit is claimed; (B) may be for either an oil or gas discovery well or a dry hole; and (C) must be for goods, services, or rentals of personal property reasonably required for the surface preparation, drilling, casing, cementing, and logging of an exploration well, and, in the case of a dry hole, for the expenses required for abandonment if the well is abandoned within 18 months after the date the well was spudded; (3) may not be for testing, stimulation, or completion costs; administration, supervision, engineering, or lease operating costs; geological or management costs; community relations or environmental costs; bonuses, taxes, or other payments to governments related to the well; or other costs that are generally recognized as indirect costs or financing costs; and (4) may not be incurred for an exploration well or seismic exploration that is included in a plan of exploration or a plan of development for any unit on May 13, 2003. * Sec. 12. AS 43.55.025(c) is amended to read: (c) To be eligible for the 50 [20] percent production tax credit authorized by (a)(1)(A) [(a)(1)] of this section or the 60 [40] percent production tax credit authorized by (a)(1)(C) [(a)(3)] of this section, exploration expenditures must (1) qualify under (b) of this section; and (2) be for an exploration well, subject to the following: (A) for an exploration well other than a well that is described in (B) of this paragraph, the well must be located and drilled in such a manner that the bottom hole is located not less than three miles away from the bottom hole of a preexisting suspended, completed, or abandoned oil or gas well; in this subparagraph, "preexisting" means a well that was spudded more than 150 days but less than 35 years before the exploration well was spudded; 2006-08-05 House Journal Page 4319 (B) for an exploration well that explores a Cook Inlet prospect, the well must be located at least three miles from any other well drilled for oil and gas with all distances measured as the horizontal distance between exploration targets, except that the exploration well that is located within three miles of a well drilled for oil and gas qualifies for the tax credit authorized by this subsection if the exploration well tests potential hydrocarbon traps that the commissioner of natural resources determines, after analyzing evidence submitted by the explorer and from other information that the commissioner of natural resources determines relevant, constitute a distinctly separate exploration target. * Sec. 13. AS 43.55.025(d) is amended to read: (d) To be eligible for the 50 [20] percent production tax credit authorized by (a)(1)(B) [(a)(2)] of this section or the 60 [40] percent production tax credit authorized by (a)(1)(C) [(a)(3)] of this section, an exploration expenditure must (1) qualify under (b) of this section; and (2) be for an exploration well that is located not less than 25 miles outside of the outer boundary, as delineated on July 1, 2003, of any unit that is under a plan of development, except that for an exploration well for a Cook Inlet prospect to qualify under this paragraph, the exploration well must be located not less than 10 miles outside the outer boundary, as delineated on July 1, 2003, of any unit that is under a plan of development. * Sec. 14. AS 43.55.025(e) is amended to read: (e) To be eligible for the 60 [40] percent production tax credit authorized by (a)(1)(D) [(a)(4)] of this section, the exploration expenditure must (1) qualify under (b) of this section; (2) be for seismic exploration; and (3) have been conducted outside the boundaries of a production unit or an exploration unit; however, the amount of the expenditure that is otherwise eligible under this subsection is reduced proportionately by the portion of the seismic exploration activity that crossed into a production unit or an exploration unit. * Sec. 15. AS 43.55.025(f) is amended to read: (f) For a production tax credit under this section, (1) an explorer or person drilling a development well shall, in a form prescribed by the department and within six 2006-08-05 House Journal Page 4320 months of the completion of the exploration activity or the development well, claim the credit and submit information sufficient to demonstrate to the department's satisfaction that the claimed exploration expenditures and development well expenditures qualify under this section; (2) an explorer shall agree, in writing, (A) to notify the Department of Natural Resources, within 30 days after completion of seismic or geophysical data processing, completion of a well, or filing of a claim for credit, whichever is the latest, for which exploration costs are claimed, of the date of completion and submit a report to that department describing the processing sequence and providing a list of data sets available; if, under (c)(2)(B) of this section, an explorer submits a claim for a credit for expenditures for an exploration well that is located within three miles of a well already drilled for oil and gas, in addition to the submissions required under (1) of this subsection, the explorer shall submit the information necessary for the commissioner of natural resources to evaluate the validity of the explorer's claim that the well is directed at a distinctly separate exploration target, and the commissioner of natural resources shall, upon receipt of all evidence sufficient for the commissioner to evaluate the explorer's claim, make that determination within 60 days; (B) to provide to the Department of Natural Resources, within 30 days after the date of a request, specific data sets, ancillary data, and reports identified in (A) of this paragraph; (C) that, notwithstanding any provision of AS 38, information provided under this paragraph will be held confidential by the Department of Natural Resources for 10 years following the completion date, at which time that department will release the information after 30 days' public notice; (3) if more than one person [EXPLORER] holds an interest in a well, [OR] seismic exploration, or development well each person [EXPLORER] may claim an amount of credit that is proportional to the [EXPLORER'S] cost incurred by that person; (4) the department may exercise the full extent of its powers as though the explorer or the person drilling a development well were a taxpayer under this title, in order to 2006-08-05 House Journal Page 4321 verify that the claimed expenditures are qualified exploration expenditures or development well expenditures under this section; and (5) if the department is satisfied that the [EXPLORER'S] claimed expenditures are qualified under this section, the department shall issue to the explorer or person drilling a development well a production tax credit certificate for the amount of credit to be allowed against production taxes due under this chapter; however, notwithstanding any other provision of this section, the department may not issue [TO AN EXPLORER] a production tax credit certificate under this section if the total of production tax credits submitted for Cook Inlet production, based on exploration expenditures and development well expenditures for work performed during the period described in (b) of this section for that production, that have been approved by the department exceeds $20,000,000. * Sec. 16. AS 43.55.025(g) is amended to read: (g) A person receiving a production tax credit certificate under this section [AN EXPLORER] may transfer, convey, or sell its production tax credit certificate to any person, and any person who receives a production tax credit certificate may also transfer, convey, or sell the certificate. * Sec. 17. AS 43.55.025(j) is amended to read: (j) Notwithstanding any other provision of this title, of AS 31.05, or of AS 40.25.100, the department shall provide to the Department of Natural Resources information submitted with a claim under this section to support the eligibility of an exploration expenditure or development well expenditure, including seismic exploration data and well data, and any information described in (f)(2) of this section received by the department. * Sec. 18. AS 43.55.025(k) is amended by adding a new paragraph to read: (4) "development well" means a well drilled to a known producing formation in a previously discovered field. * Sec. 19. AS 43.55.900 is amended by adding a new paragraph to read: (17) "Cook Inlet sedimentary basin" has the meaning given in regulations to implement AS 38.05.180(f)(4). * Sec. 20. This Act takes effect on July 1, 2009." 2006-08-05 House Journal Page 4322 Representative Gardner moved and asked unanimous consent that Amendment No. 6 be adopted. There was objection. The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: CSHB 3001(FIN) Second Reading Amendment No. 6 YEAS: 13 NAYS: 27 EXCUSED: 0 ABSENT: 0 Yeas: Berkowitz, Cissna, Crawford, Croft, Gara, Gardner, Gruenberg, Guttenberg, Joule, Kapsner, Kerttula, Moses, Salmon Nays: Anderson, Chenault, Coghill, Dahlstrom, Elkins, Foster, Gatto, Harris, Hawker, Holm, Kelly, Kohring, Kott, LeDoux, Lynn, McGuire, Meyer, Neuman, Olson, Ramras, Rokeberg, Samuels, Seaton, Stoltze, Thomas, Weyhrauch, Wilson And so, Amendment No. 6 was not adopted. Amendment No. 7 was offered by Representatives Croft and Crawford: Page 13, lines 20 - 23: Delete all material and insert: "(c) A credit or portion of a credit under this section (1) may not be used to reduce a person's tax liability under AS 43.55.011(e) for any calendar year below (A) four percent of the gross value at the point of production for oil and gas produced in the state lying north of 68 degrees North latitude for producer of more than 75,000 barrels of oil equivalent a day; or (B) zero for all regions and producers other than those described in (A) of this paragraph; and (2) not used under (1) of this subsection may be applied in a later calendar year." 2006-08-05 House Journal Page 4323 Page 27, line 19: Delete "zero" Insert "four percent of the gross value at the point of production for oil and gas produced in the state north of 68 degrees North latitude of more than 75,000 barrels of oil equivalent a day, or less than zero for all other regions and producers in the state" Representative Croft moved and asked unanimous consent that Amendment No. 7 be adopted. There was objection. The question being: "Shall Amendment No. 7 be adopted?" The roll was taken with the following result: CSHB 3001(FIN) Second Reading Amendment No. 7 YEAS: 13 NAYS: 27 EXCUSED: 0 ABSENT: 0 Yeas: Berkowitz, Cissna, Crawford, Croft, Gara, Gardner, Gruenberg, Guttenberg, Joule, Kapsner, Kerttula, Moses, Salmon Nays: Anderson, Chenault, Coghill, Dahlstrom, Elkins, Foster, Gatto, Harris, Hawker, Holm, Kelly, Kohring, Kott, LeDoux, Lynn, McGuire, Meyer, Neuman, Olson, Ramras, Rokeberg, Samuels, Seaton, Stoltze, Thomas, Weyhrauch, Wilson And so, Amendment No. 7 was not adopted. Amendment No. 8 was offered by Representative Berkowitz: Page 32, line 29, following "AS 38.05.132": Delete "." Insert ";" Page 32, following line 29: Insert a new paragraph to read: "(19) costs of lobbying and advertising." 2006-08-05 House Journal Page 4324 Representative Berkowitz moved and asked unanimous consent that Amendment No. 8 be adopted. Representative Hawker objected. The question being: "Shall Amendment No. 8 be adopted?" The roll was taken with the following result: CSHB 3001(FIN) Second Reading Amendment No. 8 YEAS: 14 NAYS: 26 EXCUSED: 0 ABSENT: 0 Yeas: Berkowitz, Cissna, Crawford, Croft, Gara, Gardner, Gatto, Gruenberg, Guttenberg, Joule, Kapsner, Kerttula, Moses, Salmon Nays: Anderson, Chenault, Coghill, Dahlstrom, Elkins, Foster, Harris, Hawker, Holm, Kelly, Kohring, Kott, LeDoux, Lynn, McGuire, Meyer, Neuman, Olson, Ramras, Rokeberg, Samuels, Seaton, Stoltze, Thomas, Weyhrauch, Wilson And so, Amendment No. 8 was not adopted. Representative Croft lifted the call.