Legislature(2005 - 2006)
2006-04-25 Senate Journal
Full Journal pdf2006-04-25 Senate Journal Page 2911 SB 305 Senator French requested that the reconsideration on CS FOR SENATE BILL NO. 305(FIN) am "An Act repealing the oil production tax and the gas production tax and providing for a production tax on oil and gas; relating to the calculation of the gross value at the point of production of oil and gas and to the determination of the value of oil and gas for purposes of the production tax on oil and gas; providing for tax credits against the production tax on oil and gas; relating to the relationship of the production tax on oil and gas to other taxes, to the dates those tax payments and surcharges are due, to interest on overpayments of the tax, and to the treatment of the tax in a producer's settlement with the royalty owners; relating to flared gas, and to oil and gas used in the operation of a lease or property under the production tax; relating to the prevailing value of oil and gas under the production tax; relating to surcharges on oil; relating to statements or other information required to be filed with or furnished to the Department of Revenue, to the penalty for failure to file certain reports for the tax, to the powers of the Department of Revenue, and to the disclosure of certain information required to be furnished to the Department of Revenue as applicable to the administration of the tax; relating to criminal penalties for violating conditions governing access to and use of confidential information relating to the tax, and to the deposit of tax money collected by the Department of Revenue; amending the definitions of 'gas,' 'oil,' and certain other terms for purposes of the production tax, and as the definition of the term 'gas' applies in the Alaska Stranded Gas Development Act, and adding further definitions; making conforming amendments; and providing for an effective date" be taken up. The bill was before the Senate on reconsideration. Senator Wagoner moved that the bill be returned to second reading for the purpose of a specific amendment, that being Amendment No. 7. Without objection, the bill was returned to second reading. Senator Wagoner offered Amendment No. 7 : 2006-04-25 Senate Journal Page 2912 Page 4, line 23: Delete "and gas" Senator Wagoner moved for the adoption of Amendment No. 7. Senator Gary Stevens objected. Senator Wagoner moved and asked unanimous consent for the adoption of the following amendment to Amendment No. 7: Page 4, line 20, following "gross value at the": Insert "point of" Without objection, Amendment No. 7 was amended. Senator Gary Stevens withdrew his objection. There being no further objection, Amendment No. 7 as amended was adopted. CS FOR SENATE BILL NO. 305(FIN) am was automatically in third reading on reconsideration. Senator Guess moved that the bill be returned to second reading for the purpose of a specific amendment, that being Amendment No. 8A. Without objection, the bill was returned to second reading. Senator Guess offered Amendment No. 8 A: Page 3, line 29, following "oil": Delete "that is" Insert "and gas" Page 3, line 30, following "AS 38.05.180(f)(4),": Insert "and in the Bristol Bay, Copper River, and Nenana basins," Page 3, line 31, following "oil": Insert "and gas" Page 4, line 1, following "oil": Insert "and gas" 2006-04-25 Senate Journal Page 2913 Page 5, following line 19: Insert a new subsection to read: "(i) In (e)(1) of this section, (1) "Bristol Bay basin" means the area included within the following subdivisions of the public land rectangular survey system in this state: (A) Township 17 South, Ranges 44 West - 58 West, Seward Meridian; (B) Township 18 South, Ranges 44 West - 58 West, Seward Meridian; (C) Township 19 South, Ranges 44 West - 58 West, Seward Meridian; (D) Township 20 South, Ranges 45 West - 61 West, Seward Meridian; (E) Township 21 South, Ranges 46 West - 54 West, Seward Meridian; (F) Township 21 South, Ranges 57 West - 61 West, Seward Meridian; (G) Township 22 South, Ranges 47 West - 53 West, Seward Meridian; (H) Township 22 South, Ranges 58 West - 61 West, Seward Meridian; (I) Township 23 South, Ranges 47 West - 52 West, Seward Meridian; (J) Township 24 South, Ranges 47 West - 52 West, Seward Meridian; (K) Township 25 South, Ranges 47 West - 52 West, Seward Meridian; (L) Township 26 South, Ranges 47 West - 53 West, Seward Meridian; (M) Township 27 South, Ranges 47 West - 53 West, Seward Meridian; (N) Township 28 South, Ranges 48 West - 53 West, Seward Meridian; (O) Township 29 South, Ranges 48 West - 54 West, Seward Meridian; (P) Township 30 South, Ranges 48 West - 55 West, Seward Meridian; (Q) Township 31 South, Ranges 49 West - 56 West, Seward Meridian; 2006-04-25 Senate Journal Page 2914 (R) Township 32 South, Ranges 51 West - 57 West, Seward Meridian; (S) Township 33 South, Ranges 52 West - 58 West, Seward Meridian; (T) Township 34 South, Ranges 53 West - 59 West, Seward Meridian; (U) Township 35 South, Ranges 51 West - 59 West, Seward Meridian; (V) Township 36 South, Ranges 51 West - 52 West, Seward Meridian; (W) Township 36 South, Ranges 55 West - 60 West, Seward Meridian; (X) Township 37 South, Ranges 57 West - 62 West, Seward Meridian; (Y) Township 38 South, Ranges 58 West - 63 West, Seward Meridian; (Z) Township 39 South, Ranges 59 West - 64 West, Seward Meridian; (AA) Township 40 South, Ranges 59 West - 65 West, Seward Meridian; (BB) Township 41 South, Ranges 63 West - 68 West, Seward Meridian; (CC) Township 42 South, Ranges 63 West - 69 West, Seward Meridian; (DD) Township 43 South, Ranges 65 West - 70 West, Seward Meridian; (EE) Township 44 South, Ranges 65 West - 71 West, Seward Meridian; (FF) Township 45 South, Ranges 67 West - 72 West, Seward Meridian; (GG) Township 46 South, Ranges 68 West - 73 West, Seward Meridian; (HH) Township 47 South, Ranges 69 West - 78 West, Seward Meridian; (II) Township 48 South, Ranges 70 West - 81 West, Seward Meridian; (JJ) Township 49 South, Ranges 70 West - 83 West, Seward Meridian; (KK) Township 50 South, Ranges 71 West - 84 West, Seward Meridian; 2006-04-25 Senate Journal Page 2915 (LL) Township 51 South, Ranges 71 West - 85 West, Seward Meridian; (MM) Township 52 South, Ranges 74 West - 75 West, Seward Meridian; (NN) Township 52 South, Ranges 79 West - 86 West, Seward Meridian; (OO) Township 53 South, Ranges 85 West - 87 West, Seward Meridian; (PP) Township 54 South, Ranges 85 West - 87 West, Seward Meridian; (2) "Copper River basin" means the Copper River basin oil and gas exploration license study area, as identified in a July 2000 oil and gas exploration license notice issued by the Department of Natural Resources under AS 38.05.945(a), located between Townships 6 North and 1 North, Copper River Meridian, and between the Copper River and the west boundary of Range 9 West, Copper River Meridian; (3) "Nenana basin" means the land that is more specifically described in ADL 0390079, a reference to the file number assigned as an identifier by the division exercising the authority and duties of the division of lands, Department of Natural Resources, under AS 38.05, as that description reads on the effective date of this paragraph, and that is coextensive with or is part of the following subdivisions of the public land rectangular survey system in this state: (A) Township 2 North, Range 6 West, Fairbanks Meridian Sections 13 - 36; (B) Township 2 North, Range 7 West, Fairbanks Meridian Sections 13 - 36; (C) Township 2 North, Range 8 West, Fairbanks Meridian Sections 13 - 36; (D) Township 2 North, Range 9 West, Fairbanks Meridian Sections 13 - 17 and 19 - 36; (E) Township 2 North, Range 10 West, Fairbanks Meridian Sections 25, 26, 35, and 36; 2006-04-25 Senate Journal Page 2916 (F) Township 1 North, Range 7 West, Fairbanks Meridian Sections 1 - 12, 14 - 23, 25 - 36; (G) Township 1 North, Range 8 West, Fairbanks Meridian; (H) Township 1 North, Range 9 West, Fairbanks Meridian; (I) Township 1 North, Range 10 West, Fairbanks Meridian Sections 1, 2, 11 - 14, 23 - 26, 35, and 36; (J) Township 1 South, Range 7 West, Fairbanks Meridian Sections 2 - 23 and 26 - 35; (K) Township 1 South, Range 8 West, Fairbanks Meridian; (L) Township 1 South, Range 9 West, Fairbanks Meridian; (M) Township 1 South, Range 10 West, Fairbanks Meridian Sections 1 - 3, 10 - 15, 22 - 27, and 34 - 36; (N) Township 2 South, Range 7 West, Fairbanks Meridian Sections 4 - 9, 16 - 21, 29 - 32; (O) Township 2 South, Range 8 West, Fairbanks Meridian; (P) Township 2 South, Range 9 West, Fairbanks Meridian; (Q) Township 2 South, Range 10 West, Fairbanks Meridian Sections 1 - 3, 10 - 15, 22 - 27, and 33 - 36; (R) Township 3 South, Range 8 West, Fairbanks Meridian; (S) Township 3 South, Range 9 West, Fairbanks Meridian; (T) Township 3 South, Range 10 West, Fairbanks Meridian Sections 1 - 4, 9 - 16, 21 - 28, and 33 - 36; (U) Township 4 South, Range 8 West, Fairbanks Meridian Sections 4 - 9, 16 - 21, and 28 - 32; 2006-04-25 Senate Journal Page 2917 (V) Township 4 South, Range 9 West, Fairbanks Meridian; (W) Township 4 South, Range 10 West, Fairbanks Meridian Sections 1 - 4, 9 - 16, and 19 - 36; (X) Township 4 South, Range 11 West, Fairbanks Meridian Sections 19 - 36; (Y) Township 4 South, Range 12 West, Fairbanks Meridian Sections 23 - 26 and 33 - 36; (Z) Township 5 South, Range 9 West, Fairbanks Meridian Sections 2 - 11, 15 - 20, and 29 - 32; (AA) Township 5 South, Range 10 West, Fairbanks Meridian; (BB) Township 5 South, Range 11 West, Fairbanks Meridian; (CC) Township 5 South, Range 12 West, Fairbanks Meridian; (DD) Township 6 South, Range 10 West, Fairbanks Meridian Sections 2 - 11, 14 - 23, and 26 - 35; (EE) Township 6 South, Range 11 West, Fairbanks Meridian; (FF) Township 6 South, Range 12 West, Fairbanks Meridian Sections 1 - 12; (GG) Township 7 South, Range 10 West, Fairbanks Meridian Sections 2 - 11; (HH) Township 7 South, Range 11 West, Fairbanks Meridian Sections 1 - 12" Page 19, line 10 - 11: Delete "one-third of the gross value at the point of production of the" Page 25, line 16, following "oil": Insert "and gas" 2006-04-25 Senate Journal Page 2918 Page 25, line 23, following "oil": Insert "and gas" Senator Guess moved for the adoption of Amendment No. 8A. Senator Gary Stevens objected. The question being: "Shall Amendment No. 8A be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 8A YEAS: 8 NAYS: 12 EXCUSED: 0 ABSENT: 0 Yeas: Davis, Ellis, Elton, French, Guess, Hoffman, Kookesh, Olson Nays: Bunde, Cowdery, Dyson, Green, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken and so, Amendment No. 8A failed. CS FOR SENATE BILL NO. 305(FIN) am was automatically in third reading on reconsideration. Senator French moved that the bill be returned to second reading for the purpose of a specific amendment, that being Amendment No. 8B. Without objection, the bill was returned to second reading. Senator French offered Amendment No. 8 B: Page 1, line 1: Delete "and the gas production tax" Page 1, line 2: Delete "and gas" Page 1, line 3, following "value of oil": Delete "and gas" Page 1, line 4: Delete "and gas" 2006-04-25 Senate Journal Page 2919 Page 1, line 5: Delete "and gas" Page 1, line 6: Delete "and gas" Page 1, line 10: Delete "and gas" Page 3, line 25: Delete "or gas" Delete "and gas" Page 3, line 26: Delete "and gas" Page 4, line 2: Delete "and gas" Page 4, line 3: Delete "or gas" Delete "and gas" Page 4, line 6: Delete "and gas" Page 4, lines 10 - 11: Delete all material. Renumber the following paragraph accordingly. Page 4, line 13: Delete "or (2)" Page 4, lines 16 - 26: Delete all material. Insert "tax paid, notwithstanding (1) of this subsection, the tax is equal to (A) for oil that is produced in the Cook Inlet sedimentary basin, as that term is defined by regulations adopted to implement AS 38.05.180(f)(4), five percent of the gross value at the point of production of the oil; and 2006-04-25 Senate Journal Page 2920 (B) for oil, except oil described in (A) of this paragraph, 22.5 percent of the gross value at the point of production of the oil." Page 6, line 1: Delete "and gas" Page 6, line 4: Delete "and gas" Page 6, line 17, following "AS 43.55.011": Insert "or AS 43.55.016" Page 6, line 21: Delete "and gas" Page 6, line 22: Delete "and gas" Page 6, line 24: Delete "and gas" Page 6, line 29: Delete "and gas" Page 7, line 22: Delete "and gas" Page 9, line 28: Delete "and gas" Page 12, line 6: Following "production tax": Insert "on oil" Following "AS 43.55.011(e)": Insert "or the production tax on gas due under AS 43.55.016" Page 14, line 22, following "AS 43.55.011(e)": Insert "or 43.55.016" Page 15, line 4, following "AS 43.55.011(e)": Insert "or 43.55.016" 2006-04-25 Senate Journal Page 2921 Page 15, line 13, following "AS 43.55.011(e)": Insert "or 43.55.016" Page 15, line 15, following "AS 43.55.011(e)": Insert "or 43.55.016" Page 15, line 17, following "AS 43.55.011(e)": Insert "or 43.55.016" Page 19, line 7: Delete "and gas" Page 19, line 9: Delete "and gas" Page 19, lines 10 - 11: Delete "and one-third of the gross value at the point of production of the gas that are" Insert "that is" Page 19, line 15: Delete "or gas" Page 19, line 23: Delete "and gas" Page 19, line 28: Delete "and gas" Page 20, line 7: Delete "and gas" Page 20, line 9: Delete "or gas" Page 20, line 12: Delete "or gas" Page 20, line 15: Delete "or gas" Page 21, line 21: Delete "or gas" 2006-04-25 Senate Journal Page 2922 Page 21, line 25: Delete "or gas" Page 22, line 25: Delete "or gas" Page 22, line 27: Delete "or gas" Page 22, line 29: Delete "or gas" Page 23, line 21, following "gathering": Delete ", separating, cleaning, dehydration, compressing," Page 23, line 23: Delete "or gas" Page 24, line 6: Delete "or gas" Page 24, line 10: Delete "or gas" Page 24, line 20: Delete "or gas" Page 24, line 21: Delete "or gas" Page 24, line 22: Delete "or gas" Page 24, line 25: Delete "or gas" Page 25, line 6: Delete "or gas" Page 25, line 12: Delete "and gas" Page 25, line 14: Delete "equivalent" 2006-04-25 Senate Journal Page 2923 Page 25, line 19: Delete "and gas" Page 25, line 22: Delete "equivalent" Page 25, line 26: Delete "and gas expressed as barrels of oil equivalent" Page 25, line 28: Delete "and gas" Page 25, line 31: Delete "and gas expressed as barrels of oil equivalent" Page 26, lines 20 - 22: Delete all material. Page 26, line 26: Delete "and gas" Page 27, line 7: Delete "and gas" Page 30, line 20: Delete "43.55.013, 43.55.016" Insert "43.55.013(b), 43.55.013(d)," Page 30, line 26: Delete "and gas" Page 31, line 1: Delete "and gas" Page 31, line 7: Delete "and gas" Page 31, line 11: Delete "and gas" Page 31, line 17: Delete "and gas" Page 31, line 23: Delete "and gas" 2006-04-25 Senate Journal Page 2924 Page 31, line 26: Delete "and gas" Page 31, line 28: Delete "and gas" in both places Page 31, line 30: Delete "and gas" Page 32, line 4: Delete "and gas" Page 32, line 12: Delete "and gas" Page 33, lines 8 - 9: Delete all material. Renumber the following paragraphs accordingly. Page 33, line 11: Delete "Tax" Insert "Taxes" Page 33, line 12: Delete all material. Renumber the following paragraphs accordingly. Senator French moved for the adoption of Amendment No. 8B. Senator Green objected. The question being: "Shall Amendment No. 8B be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 8B YEAS: 7 NAYS: 13 EXCUSED: 0 ABSENT: 0 Yeas: Davis, Ellis, Elton, French, Guess, Kookesh, Olson Nays: Bunde, Cowdery, Dyson, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken and so, Amendment No. 8B failed. 2006-04-25 Senate Journal Page 2925 CS FOR SENATE BILL NO. 305(FIN) am was automatically in third reading on reconsideration. Senator French moved that the bill be returned to second reading for the purpose of a specific amendment, that being Amendment No. 9. Without objection, the bill was returned to second reading. Senator French offered Amendment No. 9 : Page 4, line 28: Delete "$50" Insert "$45" Page 5, lines 1 - 2: Delete all material and insert: "[((ANS West Coast price - $45) x .0025) x [ANS wellhead price x (1 - PPT rate)]] x (total taxable barrels of oil at the point of production)" Senator French moved for the adoption of Amendment No. 9. Senator Gary Stevens objected. The question being: "Shall Amendment No. 9 be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 9 YEAS: 7 NAYS: 13 EXCUSED: 0 ABSENT: 0 Yeas: Davis, Ellis, Elton, French, Guess, Kookesh, Olson Nays: Bunde, Cowdery, Dyson, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken and so, Amendment No. 9 failed. CS FOR SENATE BILL NO. 305(FIN) am was automatically in third reading on reconsideration. Senator Ellis called the Senate. The call was satisfied. 2006-04-25 Senate Journal Page 2926 Senator French moved that the bill be returned to second reading for the purpose of a specific amendment, that being Amendment No. 10. Without objection, the bill was returned to second reading. Senator French offered Amendment No. 10 : Page 3, line 25, through page 4, line 2: Delete all material and insert: "(e) 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, less any oil and gas the ownership or right to which is exempt from taxation or constitutes a lessor's royalty interest under an oil and gas lease, as follows: (1) for oil that is produced from the Prudhoe Bay field or Kuparuk reservoir, the tax is equal to 30 percent of the production tax value of the taxable oil as calculated under AS 43.55.160; (2) for oil that is produced from the area north of 68 degrees North latitude, except for production described in (1) of this subsection, the tax is equal to 20 percent of the production tax value of the taxable oil as calculated under AS 43.55.160; (3) for oil that is produced in the Cook Inlet sedimentary basin, as that term is defined by regulations adopted to implement AS 38.05.180(f)(4), the tax is equal to five percent of the production tax value of the taxable oil as calculated under AS 43.55.160; and (4) except as to oil described in (1) - (3) of this subsection, the tax is equal to 20 percent of the production tax value of the taxable oil and gas as calculated under AS 43.55.160." Page 7, line 24, through page 8, line 4: Delete all material and insert: "(A) a producer or explorer that incurs a qualified capital expenditure may also elect to take a tax credit against (i) a tax due under AS 43.55.011(e)(1), (e)(2), or (e)(4) in the amount of 20 percent of that expenditure; 2006-04-25 Senate Journal Page 2927 (ii) a tax due under AS 43.55.011(e)(3) in the amount of 25 percent of that expenditure; (B) for a calendar year for which the producer makes an election under AS 43.55.160(f), instead of taking a tax credit at a rate authorized by (A) of this paragraph as to each separate qualified capital expenditure after it has been incurred, a producer that incurs a qualified capital expenditure during that year and that wishes to apply a credit based on that expenditure against a tax due (i) under AS 43.55.011(e)(1), (e)(2), or (e)(4) shall calculate and apply every month an annualized tax credit in an amount equal to 1 2/3 percent of the total qualified capital expenditures incurred during that year and for which the tax credit is taken for that year; (ii) under AS 43.55.011(e)(3) shall calculate and apply every month an annualized tax credit in an amount equal to 2 1/12 percent of the total qualified capital expenditures incurred during that year and for which the tax credit is taken for that year;" Page 25, line 14, through page 26, line 1: Delete all material and insert: "(1) not more than 5,000 barrels of oil equivalent, the amount of the credit (A) for oil subject to tax (i) under AS 43.55.011(e)(1) is 30 percent of the producer's production tax value for that month under AS 43.55.160(a); (ii) under AS 43.55.011(e)(2) is 20 percent of the producer's production tax value for that month under AS 43.55.160(a); (iii) under AS 43.55.011(e)(3) is five percent of the producer's production tax value for that month under AS 43.55.160(a); and (B) for oil and gas subject to tax under AS 43.55.011(e)(4) is 20 percent of the producer's production tax value for that month under AS 43.55.160(a); and 2006-04-25 Senate Journal Page 2928 (2) more than 5,000 barrels of oil equivalent, the amount of the credit (A) for oil subject to tax (i) under AS 43.55.011(e)(1) is 30 percent of the producer's production tax value for that month under AS 43.55.160(a) multiplied by the quotient of 5,000 divided by the average amount of oil and gas expressed as barrels of oil equivalent, produced a day during that month and taxable under AS 43.55.011(e)(1); (ii) under AS 43.55.011(e)(2) is 20 percent of the producer's production tax value for that month under AS 43.55.160(a) multiplied by the quotient of 5,000 divided by the average amount of oil and gas expressed as barrels of oil equivalent, produced a day during that month and taxable under AS 43.55.011(e)(2); (iii) under AS 43.55.011(e)(3) is five percent of the producer's production tax value for that month under AS 43.55.160(a) multiplied by the quotient of 5,000 divided by the average amount of oil and gas expressed as barrels of oil equivalent, produced a day during that month and taxable under AS 43.55.011(e)(3); and (B) for oil and gas subject to tax under AS 43.55.011(e)(4) is 20 percent of the producer's production tax value for that month under AS 43.55.160(a) multiplied by the quotient of 5,000 divided by the average amount of oil and gas expressed as barrels of oil equivalent, produced a day during that month and taxable under AS 43.55.011(e)(4)." Page 31, lines 1 - 5: Delete all material. Insert "AS 43.55.024(a), enacted by sec. 12 of this Act, for oil and gas produced on or after April 1, 2006, and before January 1, 2007, (1) the phrase "every month an annualized tax credit in an amount equal to 1 2/3 percent" in AS 43.55.024(a)(1)(B)(i), enacted by sec. 12 of this Act, shall be replaced by the phrase "every month during the period April 1, 2006, through December 31, 2006, an annualized tax credit in an amount equal to 2 2/9 percent"; and 2006-04-25 Senate Journal Page 2929 (2) the phrase "every month an annualized tax credit in an amount equal to 2 1/12 percent" in AS 43.55.024(a)(1)(B)(ii), enacted by sec. 12 of this Act, shall be replaced by the phrase "every month during the period April 1, 2006, through December 31, 2006, an annualized tax credit in an amount equal to 2 7/9 percent." Senator French moved for the adoption of Amendment No. 10. Senator Green objected. The question being: "Shall Amendment No. 10 be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 10 YEAS: 7 NAYS: 13 EXCUSED: 0 ABSENT: 0 Yeas: Davis, Ellis, Elton, French, Guess, Kookesh, Olson Nays: Bunde, Cowdery, Dyson, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken and so, Amendment No. 10 failed. CS FOR SENATE BILL NO. 305(FIN) am was automatically in third reading on reconsideration. Senator French moved that the bill be returned to second reading for the purpose of a specific amendment, that being Amendment No. 11. Without objection, the bill was returned to second reading. Senator French offered Amendment No. 11 : Page 3, line 25, through page 4, line 2: Delete all material and insert: "(e) 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, less any oil and gas the ownership or right to which is exempt from taxation or constitutes a lessor's royalty interest under an oil and gas lease. The tax 2006-04-25 Senate Journal Page 2930 (1) for oil that is produced in the Cook Inlet sedimentary basin, as that term is defined by regulations adopted to implement AS 38.05.180(f)(4), is equal to five percent of the production tax value of the taxable oil as calculated under AS 43.55.160; (2) for oil, except as to oil described in (1) of this subsection, is equal to the amount that is the greater of (A) 22.5 percent of the production tax value of the taxable oil and gas as calculated under AS 43.55.160; or (B) $1 per barrel of oil produced during any month; tax is due and payable under this subparagraph only if (i) the producer's oil production from all leases or properties in the state exceeds 5,000 barrels a day; (ii) the producer does not owe tax under (A) of this paragraph on oil produced from the leases or properties in the state subject to the tax set out in that subparagraph; and (iii) the prevailing value for oil produced in the Alaska North Slope area during the month exceeds $20 per barrel; (3) for gas is equal to 22.5 percent of the production tax value of the taxable gas as calculated under AS 43.55.160." Page 25, line 16, following "AS 43.55.011(e)(1)": Insert "or (e)(2)(B)" Page 25, line 19: Delete "AS 43.55.011(e)(2)" Insert "AS 43.55.011(e)(2)(A)" Page 25, line 23, following "AS 43.55.011(e)(1)": Insert "or (e)(2)(B)" Page 25, line 27, following "AS 43.55.011(e)(1)": Insert "or (e)(2)(B)" 2006-04-25 Senate Journal Page 2931 Page 25, line 28: Delete "AS 43.55.011(e)(2)" Insert "AS 43.55.011(e)(2)(A)" Page 26, line 1: Delete "AS 43.55.011(e)(2)" Insert "AS 43.55.011(e)(2)(A)" Senator French moved for the adoption of Amendment No. 11. Senator Gary Stevens objected. The question being: "Shall Amendment No. 11 be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 11 YEAS: 7 NAYS: 13 EXCUSED: 0 ABSENT: 0 Yeas: Davis, Ellis, Elton, French, Guess, Kookesh, Olson Nays: Bunde, Cowdery, Dyson, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken and so, Amendment No. 11 failed. CS FOR SENATE BILL NO. 305(FIN) am was automatically in third reading on reconsideration. Senator Elton moved that the bill be returned to second reading for the purpose of a specific amendment, that being Amendment No. 12. Without objection, the bill was returned to second reading. Senator Elton offered Amendment No. 12 : Page 4, line 1: Delete "22.5 percent" Insert "25 percent" Page 4, line 23: Delete "22.5 percent" Insert "25 percent" 2006-04-25 Senate Journal Page 2932 Page 7, line 26: Delete "25 percent" Insert "20 percent" Page 8, line 2: Delete "2 1/12 percent" Insert "1 2/3 percent" Page 8, line 23: Delete "22.5 percent" Insert "20 percent" Page 25, line 20: Delete "22.5 percent" Insert "25 percent" Page 25, line 29: Delete "22.5 percent" Insert "25 percent" Page 31, line 3: Delete "2 1/12 percent" Insert "1 2/3 percent" Page 31, line 5: Delete "2 7/9 percent" Insert "2 2/9 percent" Senator Elton moved for the adoption of Amendment No. 12. Senator Green objected. The question being: "Shall Amendment No. 12 be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 12 YEAS: 7 NAYS: 13 EXCUSED: 0 ABSENT: 0 Yeas: Davis, Ellis, Elton, French, Guess, Kookesh, Olson Nays: Bunde, Cowdery, Dyson, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken 2006-04-25 Senate Journal Page 2933 and so, Amendment No. 12 failed. CS FOR SENATE BILL NO. 305(FIN) am was automatically in third reading on reconsideration. Senator Elton moved that the bill be returned to second reading for the purpose of a specific amendment, that being Amendment No. 13. Without objection, the bill was returned to second reading. Senator Elton offered Amendment No. 13 : Page 5, following line 19: Insert a new subsection to read: "(i) Tax may not be levied under (e) - (h) of this section on production of oil and gas after June 30, 2013." Page 12, line 20: Delete "2016" Insert "2013" Page 25, line 9: Delete "April 1, 2016" Insert "July 1, 2013" Page 26, line 11: Delete "during 2016 to exceed $3,500,000" Insert "during 2013 to exceed $7,000,000" Page 26, line 30: Delete "2013" Insert "2011" Page 27, line 9: Delete "2015" Insert "2013" Page 27, line 10, following "subsection": Delete ", and shall include with the report a recommendation as to whether the legislature should extend the availability of the credits under AS 43.55.025 and 43.55.170 beyond April 30, 2016" 2006-04-25 Senate Journal Page 2934 Page 33, following line 3: Insert a new bill section to read: "* Sec. 39. The uncodified law of the State of Alaska is amended by adding a new section to read: REPORT REGARDING PRODUCTION TAX ON OIL AND GAS. The Legislative Audit Division shall (1) study the effects of the tax rates under AS 43.55.011, as that section is amended by this Act, and of potential changes in those tax rates on state revenue; and (2) prepare a report on or before the first day of each of the 2009 and 2011 regular sessions of the legislature on the results of the study made under (1) of this subsection; the division shall notify the legislature that the report prepared under this paragraph is available." Renumber the following bill sections accordingly. Senator Elton moved for the adoption of Amendment No. 13. Senator Gary Stevens objected. The question being: "Shall Amendment No. 13 be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 13 YEAS: 2 NAYS: 18 EXCUSED: 0 ABSENT: 0 Yeas: Ellis, Elton Nays: Bunde, Cowdery, Davis, Dyson, French, Green, Guess, Hoffman, Huggins, Kookesh, Olson, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken Olson changed from "Yea" to "Nay". and so, Amendment No. 13 failed. CS FOR SENATE BILL NO. 305(FIN) am was automatically in third reading on reconsideration. 2006-04-25 Senate Journal Page 2935 The question to be reconsidered: "Shall CS FOR SENATE BILL NO. 305(FIN) am "An Act repealing the oil production tax and the gas production tax and providing for a production tax on oil and gas; relating to the calculation of the gross value at the point of production of oil and gas and to the determination of the value of oil and gas for purposes of the production tax on oil and gas; providing for tax credits against the production tax on oil and gas; relating to the relationship of the production tax on oil and gas to other taxes, to the dates those tax payments and surcharges are due, to interest on overpayments of the tax, and to the treatment of the tax in a producer's settlement with the royalty owners; relating to flared gas, and to oil and gas used in the operation of a lease or property under the production tax; relating to the prevailing value of oil and gas under the production tax; relating to surcharges on oil; relating to statements or other information required to be filed with or furnished to the Department of Revenue, to the penalty for failure to file certain reports for the tax, to the powers of the Department of Revenue, and to the disclosure of certain information required to be furnished to the Department of Revenue as applicable to the administration of the tax; relating to criminal penalties for violating conditions governing access to and use of confidential information relating to the tax, and to the deposit of tax money collected by the Department of Revenue; amending the definitions of 'gas,' 'oil,' and certain other terms for purposes of the production tax, and as the definition of the term 'gas' applies in the Alaska Stranded Gas Development Act, and adding further definitions; making conforming amendments; and providing for an effective date" pass the Senate?" The roll was taken with the following result: CSSB 305(FIN) am Third Reading - On Reconsideration Effective Date YEAS: 16 NAYS: 4 EXCUSED: 0 ABSENT: 0 Yeas: Bunde, Cowdery, Davis, Dyson, Green, Hoffman, Huggins, Kookesh, Olson, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken Nays: Ellis, Elton, French, Guess and so, CS FOR SENATE BILL NO. 305(FIN) am passed the Senate on reconsideration. 2006-04-25 Senate Journal Page 2936 Senator Gary Stevens moved and asked unanimous consent that the vote on the passage of the bill be considered the vote on the effective date clause. Without objection, it was so ordered and the bill was referred to the Secretary for engrossment.