Legislature(2011 - 2012)

2011-03-31 House Journal

Full Journal pdf

2011-03-31                     House Journal                      Page 0661
HB 110                                                                                                                        
The following, which was advanced to third reading from the March                                                               
30, 2011, calendar (page 643), was read the third time:                                                                         
                                                                                                                                

2011-03-31                     House Journal                      Page 0662
    CS FOR HOUSE BILL NO. 110(FIN)                                                                                              
    "An Act relating to the interest rate applicable to certain amounts                                                         
    due for fees, taxes, and payments made and property delivered to                                                            
    the Department of Revenue; relating to the oil and gas production                                                           
    tax rate; relating to monthly installment payments of the oil and                                                           
    gas production tax; relating to oil and gas production tax credits,                                                         
    including qualified capital credits for exploration, development,                                                           
    and production; relating to certain additional nontransferable oil                                                          
    and gas production tax credits; relating to the disclosure of certain                                                       
    tax information; making conforming amendments; and providing                                                                
    for an effective date."                                                                                                     
                                                                                                                                
The House Rules Committee submitted the following updated fiscal                                                                
note:                                                                                                                           
                                                                                                                                
6.  Zero, Dept. of Natural Resources                                                                                            
                                                                                                                                
Representative Doogan moved and asked unanimous consent that                                                                    
CSHB 110(FIN) be returned to second reading for the specific purpose                                                            
of considering Amendment No. 1.  There being no objection, it was so                                                            
ordered.                                                                                                                        
                                                                                                                                
The Speaker stated that, without objection, CSHB 110(FIN) would be                                                              
returned to second reading for all amendments.                                                                                  
                                                                                                                                
Amendment No. 1 was offered by Representative Doogan:                                                                           
                                                                                                                                
Page 1, lines 5 - 6 (title amendment):                                                                                          
    Delete "relating to certain additional nontransferable oil and                                                            
gas production tax credits;"                                                                                                  
                                                                                                                                
Page 1, following line 12:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 2. AS 05.15.095(c) is amended to read:                                                                                
         (c)  A delinquent fee bears interest at the rate set by                                                                
    AS 43.05.225 [AS 43.05.225(2)]."                                                                                        
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 2, following line 5:                                                                                                       
    Insert a new bill section to read:                                                                                          

2011-03-31                     House Journal                      Page 0663
"* Sec. 4. AS 34.45.470(a) is amended to read:                                                                                
         (a)  A person who fails to pay or deliver property within the                                                          
    time prescribed by this chapter may be required to pay to the                                                               
    department interest at the annual rate calculated under                                                                     
    AS 43.05.225 [AS 43.05.225(2)] on the property or the value of it                                                       
    from the date the property should have been paid or delivered."                                                            
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 2, following line 17:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 6. AS 43.05.225 is amended to read:                                                                                   
          Sec. 43.05.225. Interest. Unless otherwise provided,                                                               
             (1)  when a tax levied in this title becomes delinquent, it                                                        
    bears interest in a calendar quarter at the rate of five [THREE]                                                        
    percentage points above the annual rate charged member banks for                                                            
    advances by the 12th Federal Reserve District as of the first day of                                                        
    that calendar quarter, or at the annual rate of 11 percent,                                                                 
    whichever is greater [LESSER], compounded quarterly as of the                                                           
    last day of that quarter;                                                                                                   
             (2)  the interest rate is 12 percent a year for                                                                    
                  (A)  delinquent fees payable under AS 05.15.095(c);                                                           
         and                                                                                                                    
                  (B)  unclaimed property that is not timely paid or                                                            
         delivered, as allowed by AS 34.45.470(a)."                                                                             
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 2, following line 25:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 8. AS 43.20.046(i) is amended to read:                                                                                
         (i)  The issuance of a refund under this section does not limit                                                        
    the department's ability to later audit or adjust the claim if the                                                          
    department determines, as a result of the audit, that the person that                                                       
    claimed the credit was not entitled to the amount of the credit. The                                                        
    tax liability of the person receiving the credit under this chapter is                                                      
    increased by the amount of the credit that exceeds that to which                                                            
    the person was entitled. If the tax liability is increased under this                                                       
    subsection, the increase bears interest under AS 43.05.225                                                              
    [AS 43.05.225(1)] from the date the refund was issued."                                                                     
                                                                                                                                

2011-03-31                     House Journal                      Page 0664
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 3, following line 2:                                                                                                       
    Insert a new bill section to read:                                                                                          
"* Sec. 10. AS 43.50.570 is amended to read:                                                                                  
         Sec. 43.50.570. Interest. A licensee who fails to pay an                                                             
     amount due for the purchase of stamps within the time required                                                            
             (1)  is considered to have failed to pay the cigarette taxes                                                       
    due under this chapter; and                                                                                                 
             (2)  shall pay interest at the rate established under                                                              
    AS 43.05.225 [AS 43.05.225(1)] from the date on which the                                                               
    amount became due until the date of payment."                                                                               
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 3, following line 21:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 12. AS 43.55.011(e) is repealed and reenacted to read:                                                                
         (e)  There is levied on the producer of oil or gas a tax for all                                                       
    oil and gas produced each calendar year 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 landowner's royalty                                                          
    interest. Except as otherwise provided under (f), (j), (k), and (o) of                                                      
    this section, the tax is equal to the sum of                                                                                
             (1)  the annual production tax value of the taxable oil and                                                        
    gas as calculated under AS 43.55.160(a)(1) multiplied by 25                                                                 
    percent; and                                                                                                                
             (2)  the sum, over all months of the calendar year, of the                                                         
    tax amounts determined under (g) of this section."                                                                          
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 7, following line 25:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 14. AS 43.55.011(g) is repealed and reenacted to read:                                                                
         (g)  For each month of the calendar year for which the                                                                 
    producer's average monthly production tax value under                                                                       
    AS 43.55.160(a)(2) for each BTU equivalent barrel of the taxable                                                            
    oil and gas is more than $30, the amount of tax for purposes of                                                             
    (e)(2) of this section is determined by multiplying the monthly                                                             

2011-03-31                     House Journal                      Page 0665
    production tax value of the taxable oil and gas produced during                                                             
    the month by the tax rate calculated as follows:                                                                            
             (1)  if the producer's average monthly production tax                                                              
    value for each BTU equivalent barrel of the taxable oil and gas for                                                         
    the month is not more than $92.50, the tax rate is 0.4 percent                                                              
    multiplied by the number that represents the difference between                                                             
    that average monthly production tax value for each BTU                                                                      
    equivalent barrel and $30; or                                                                                               
             (2)  if the producer's average monthly production tax                                                              
    value for each BTU equivalent barrel of the taxable oil and gas for                                                         
    the month is more than $92.50, the tax rate is the sum of 25                                                                
    percent and the product of 0.1 percent multiplied by the number                                                             
    that represents the difference between the average monthly                                                                  
    production tax value for each BTU equivalent barrel and $92.50,                                                             
    except that the sum determined under this paragraph may not                                                                 
    exceed 50 percent."                                                                                                         
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 10, following line 14:                                                                                                     
    Insert a new bill section to read:                                                                                          
"* Sec. 16. AS 43.55.020(a) is amended to read:                                                                               
         (a)  For a calendar year, a producer subject to tax under                                                              
    AS 43.55.011(e) - (i) shall pay the tax as follows:                                                                         
             (1)  an installment payment of the estimated tax levied by                                                         
    AS 43.55.011(e), net of any tax credits applied as allowed by law,                                                          
    is due for each month of the calendar year on the last day of the                                                           
    following month; except as otherwise provided under (2) of this                                                             
    subsection, the amount of the installment payment is the sum of                                                             
    the following amounts, less 1/12 of the tax credits that are allowed                                                        
    by law to be applied against the tax levied by AS 43.55.011(e) for                                                          
    the calendar year, but the amount of the installment payment may                                                            
    not be less than zero:                                                                                                      
                  (A)  for oil and gas produced from leases or                                                                  
         properties in the state outside the Cook Inlet sedimentary                                                             
         basin but not subject to AS 43.55.011(o), other than leases or                                                         
         properties subject to AS 43.55.011(f), the greater of                                                                  
                      (i)  zero; or                                                                                             
                      (ii)  the sum of 25 percent and the tax rate                                                          
             calculated for the month under AS 43.55.011(g)                                                                 

2011-03-31                     House Journal                      Page 0666
             multiplied by [APPLICABLE TAX RATES IN                                                                         
             AS 43.55.011(e), AS APPLICABLE, AND 43.55.011(g),                                                                  
             AS APPLICABLE, APPLIED TO] the remainder                                                                           
             obtained by subtracting 1/12 of the producer's adjusted                                                            
             lease expenditures for the calendar year of production                                                             
             under AS 43.55.165 and 43.55.170 that are deductible for                                                           
             the leases or properties under AS 43.55.160 from the                                                               
             gross value at the point of production of the oil and gas                                                          
             produced from the leases or properties during the month                                                            
             for which the installment payment is calculated;                                                                   
                  (B)  for oil and gas produced from leases or                                                                  
         properties subject to AS 43.55.011(f), the greatest of                                                                
                      (i)  zero;                                                                                                
                      (ii)  zero percent, one percent, two percent, three                                                       
             percent, or four percent, as applicable, of the gross value                                                        
             at the point of production of the oil and gas produced                                                             
             from all leases or properties during the month for which                                                           
             the installment payment is calculated; or                                                                          
                      (iii)  the sum of 25 percent and the tax rate                                                         
             calculated for the month under AS 43.55.011(g)                                                                 
             multiplied by [APPLICABLE TAX RATES IN                                                                         
             AS 43.55.011(e), AS APPLICABLE, AND 43.55.011(g),                                                                  
             AS APPLICABLE, APPLIED TO] the remainder                                                                           
             obtained by subtracting 1/12 of the producer's adjusted                                                            
             lease expenditures for the calendar year of production                                                             
             under AS 43.55.165 and 43.55.170 that are deductible for                                                           
             those leases or properties under AS 43.55.160 from the                                                             
             gross value at the point of production of the oil and gas                                                          
             produced from those leases or properties during the                                                                
             month for which the installment payment is calculated;                                                             
                  (C)  for oil and gas produced from each lease or                                                              
         property subject to AS 43.55.011(j), (k), or (o), the greater of                                                       
                      (i)  zero; or                                                                                             
                      (ii)  the sum of 25 percent and the tax rate                                                          
             calculated for the month under AS 43.55.011(g)                                                                 
             multiplied by [APPLICABLE TAX RATES IN                                                                         
             AS 43.55.011(e), AS APPLICABLE, AND 43.55.011(g),                                                                  
             AS APPLICABLE, APPLIED TO] the remainder                                                                           
             obtained by subtracting 1/12 of the producer's adjusted                                                            
             lease expenditures for the calendar year of production                                                             

2011-03-31                     House Journal                      Page 0667
             under AS 43.55.165 and 43.55.170 that are deductible                                                               
             under AS 43.55.160 for oil or gas, respectively, produced                                                          
             from the lease or property from the gross value at the                                                             
             point of production of the oil or gas, respectively,                                                               
             produced from the lease or property during the month for                                                           
              which the installment payment is calculated;                                                                     
             (2)  an amount calculated under (1)(C) of this subsection                                                          
    for oil or gas produced from a lease or property subject to                                                                 
    AS 43.55.011(j), (k), or (o) may not exceed the product obtained                                                            
    by carrying out the calculation set out in AS 43.55.011(j)(1) or (2)                                                        
    or 43.55.011(o), as applicable, for gas or set out in                                                                       
    AS 43.55.011(k)(1) or (2), as applicable, for oil, but substituting                                                         
    in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable,                                                          
    the amount of taxable gas produced during the month for the                                                                 
    amount of taxable gas produced during the calendar year and                                                                 
    substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the                                                         
    amount of taxable oil produced during the month for the amount                                                              
    of taxable oil produced during the calendar year;                                                                           
             (3)  an installment payment of the estimated tax levied by                                                         
    AS 43.55.011(i) for each lease or property is due for each month                                                            
    of the calendar year on the last day of the following month; the                                                            
    amount of the installment payment is the sum of                                                                             
                  (A)  the applicable tax rate for oil provided under                                                           
         AS 43.55.011(i), multiplied by the gross value at the point of                                                         
         production of the oil taxable under AS 43.55.011(i) and                                                                
         produced from the lease or property during the month; and                                                              
                  (B)  the applicable tax rate for gas provided under                                                           
         AS 43.55.011(i), multiplied by the gross value at the point of                                                         
         production of the gas taxable under AS 43.55.011(i) and                                                                
         produced from the lease or property during the month;                                                                 
             (4)  any amount of tax levied by AS 43.55.011(e) or (i),                                                           
    net of any credits applied as allowed by law, that exceeds the total                                                        
    of the amounts due as installment payments of estimated tax is                                                              
    due on March 31 of the year following the calendar year of                                                                  
    production."                                                                                                                
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 10, following line 26:                                                                                                     
    Insert a new bill section to read:                                                                                          

2011-03-31                     House Journal                      Page 0668
"* Sec. 18. AS 43.55.020(g) is amended to read:                                                                               
         (g)  Notwithstanding any contrary provision of AS 43.05.225,                                                           
    an unpaid amount of an installment payment required under (a)(1)                                                            
    - (3) of this section that is not paid when due bears interest (1) at                                                       
    the rate provided for an underpayment under 26 U.S.C. 6621                                                                  
    (Internal Revenue Code), as amended, compounded daily, from                                                                 
    the date the installment payment is due until March 31 following                                                            
    the calendar year of production, and (2) as provided for a                                                                  
    delinquent tax under AS 43.05.225 [AS 43.05.225(1)] after that                                                          
    March 31. Interest accrued under (1) of this subsection that                                                                
    remains unpaid after that March 31 is treated as an addition to tax                                                         
    that bears interest under (2) of this subsection. An unpaid amount                                                          
    of tax due under (a)(4) of this section that is not paid when due                                                           
    bears interest as provided for a delinquent tax under AS 43.05.225                                                      
    [AS 43.05.225(1)]."                                                                                                         
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 11, following line 13:                                                                                                     
    Insert a new bill section to read:                                                                                          
"* Sec. 20. AS 43.55.023(a) is amended to read:                                                                               
         (a)  A producer or explorer may take a tax credit for a                                                                
    qualified capital expenditure as follows:                                                                                   
             (1)  notwithstanding that a qualified capital expenditure                                                          
    may be a deductible lease expenditure for purposes of calculating                                                           
    the production tax value of oil and gas under AS 43.55.160(a),                                                              
    unless a credit for that expenditure is taken under AS 38.05.180(i),                                                        
    AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or                                                                  
    explorer that incurs a qualified capital expenditure may also elect                                                         
    to apply a tax credit against a tax levied by AS 43.55.011(e) in the                                                        
    amount of 20 percent of that expenditure; however, not more                                                             
    than half of the tax credit may be applied for a single calendar                                                        
    year;                                                                                                                   
             (2)  a producer or explorer may take a credit for a                                                                
    qualified capital expenditure incurred in connection with                                                                   
    geological or geophysical exploration or in connection with an                                                              
    exploration well only if the producer or explorer                                                                           
                  (A)  agrees, in writing, to the applicable provisions of                                                      
         AS 43.55.025(f)(2);                                                                                                    
                  (B)  submits to the Department of Natural Resources                                                           

2011-03-31                     House Journal                      Page 0669
         all data that would be required to be submitted under                                                                  
         AS 43.55.025(f)(2)."                                                                                                   
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 12, following line 8:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 22. AS 43.55.023(d) is amended to read:                                                                               
         (d)  Except as limited by (i) of this section, a person that is                                                        
    entitled to take a tax credit under this section that wishes to                                                             
    transfer the unused credit to another person or obtain a cash                                                               
    payment under AS 43.55.028 may apply to the department for [A]                                                              
    transferable tax credit certificates [CERTIFICATE]. An                                                                  
    application under this subsection must be in a form prescribed by                                                           
    the department and must include supporting information and                                                                  
    documentation that the department reasonably requires. The                                                                  
    department shall grant or deny an application, or grant an                                                                  
    application as to a lesser amount than that claimed and deny it as                                                          
    to the excess, not later than 120 days after the latest of (1)                                                              
    March 31 of the year following the calendar year in which the                                                               
    qualified capital expenditure [, WELL LEASE EXPENDITURE,]                                                                   
    or carried-forward annual loss for which the credit is claimed was                                                          
    incurred; (2) the date the statement required under                                                                         
    AS 43.55.030(a) or (e) was filed for the calendar year in which the                                                         
    qualified capital expenditure [, WELL LEASE EXPENDITURE,]                                                                   
    or carried-forward annual loss for which the credit is claimed was                                                          
    incurred; or (3) the date the application was received by the                                                               
    department. If, based on the information then available to it, the                                                          
    department is reasonably satisfied that the applicant is entitled to a                                                      
    credit, the department shall issue the applicant two [A]                                                                
    transferable tax credit certificates, each for half of                                                                  
    [CERTIFICATE FOR] the amount of the credit. The credit                                                                  
    shown on one of the two certificates is available for immediate                                                         
    use. The credit shown on the second of the two certificates                                                             
    may not be applied against a tax for a calendar year earlier                                                            
    than the calendar year following the calendar year in which                                                             
    the certificate is issued, and the certificate must contain a                                                           
    conspicuous statement to that effect. A certificate issued under                                                        
    this subsection does not expire."                                                                                           
                                                                                                                                

2011-03-31                     House Journal                      Page 0670
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 13, following line 5:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 25. AS 43.55.023(g) is amended to read:                                                                               
         (g)  The issuance of a transferable tax credit certificate under                                                       
    (d) of this section, [OR] former (m) of this section, or (p) of this                                                
    section, or the purchase of a certificate under AS 43.55.028 does                                                       
    not limit the department's ability to later audit a tax credit claim to                                                     
    which the certificate relates or to adjust the claim if the                                                                 
    department determines, as a result of the audit, that the applicant                                                         
    was not entitled to the amount of the credit for which the                                                                  
    certificate was issued. The tax liability of the applicant under                                                            
    AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased by the                                                               
    amount of the credit that exceeds that to which the applicant was                                                           
    entitled, or the applicant's available valid outstanding credits                                                            
    applicable against the tax levied by AS 43.55.011(e) are reduced                                                            
    by that amount. If the applicant's tax liability is increased under                                                         
    this subsection, the increase bears interest under AS 43.05.225                                                         
    [AS 43.05.225(1)] from the date the transferable tax credit                                                                 
    certificate was issued. For purposes of this subsection, an                                                                 
    applicant that is an explorer is considered a producer subject to the                                                       
    tax levied by AS 43.55.011(e)."                                                                                             
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 13, line 9:                                                                                                                
    Delete "2021"                                                                                                           
    Insert "2015"                                                                                                           
                                                                                                                                
Page 14, line 1:                                                                                                                
    Delete "2020"                                                                                                           
    Insert "2014"                                                                                                           
    Delete "2021"                                                                                                               
    Insert "2015"                                                                                                               
                                                                                                                                
Page 14, line 10, following "expenditure;":                                                                                     
    Insert "a tax credit under this paragraph may be applied for a                                                          
single calendar year;"                                                                                                      
                                                                                                                                

2011-03-31                     House Journal                      Page 0671
Page 15, line 4, following "(l)":                                                                                               
    Insert "and (p)"                                                                                                        
                                                                                                                                
Page 15, following line 16:                                                                                                     
    Insert a new bill section to read:                                                                                          
"* Sec. 30. AS 43.55.023 is amended by adding a new subsection to                                                             
read:                                                                                                                           
         (p)  For a lease expenditure incurred in the state south of 68                                                         
    degrees North latitude after December 31, 2014, that qualifies for                                                          
    tax credits under (a) and (b) of this section, and for a well lease                                                         
    expenditure incurred in the state south of 68 degrees North                                                                 
    latitude that qualifies for a tax credit under (l) of this section, the                                                     
    department shall issue transferable tax credit certificates to the                                                          
    person entitled to the credit for the full amount of the credit. The                                                        
    transferable tax credit certificates do not expire."                                                                        
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 15, line 17, through page 17, line 17:                                                                                     
    Delete all material.                                                                                                        
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 18, following line 7:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 32. AS 43.55.028(e) is amended to read:                                                                               
         (e)  The department, on the written application of a person to                                                         
    whom a transferable tax credit certificate has been issued under                                                            
    AS 43.55.023(d), [OR] former AS 43.55.023(m), or                                                                    
    AS 43.55.023(p), or to whom a production tax credit certificate                                                         
    has been issued under AS 43.55.025(f), may use available money                                                              
    in the oil and gas tax credit fund to purchase, in whole or in part,                                                        
    the certificate if the department finds that                                                                                
             (1)  the calendar year of the purchase is not earlier than                                                         
    the first calendar year for which the credit shown on the certificate                                                       
    would otherwise be allowed to be applied against a tax;                                                                     
             (2)  the applicant does not have an outstanding liability to                                                       
    the state for unpaid delinquent taxes under this title;                                                                     
             (3) the applicant's total tax liability under                                                                      
    AS 43.55.011(e), after application of all available tax credits, for                                                        

2011-03-31                     House Journal                      Page 0672
    the calendar year in which the application is made is zero;                                                                 
             (4)the applicant's average daily production of oil and gas                                                         
    taxable under AS 43.55.011(e) during the calendar year preceding                                                            
    the calendar year in which the application is made was not more                                                             
    than 50,000 BTU equivalent barrels; and                                                                                     
             (5)the purchase is consistent with this section and                                                                
    regulations adopted under this section."                                                                                    
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 18, following line 16:                                                                                                     
    Insert a new bill section to read:                                                                                          
"* Sec. 34. AS 43.55.028(g) is amended to read:                                                                               
         (g)  The department may adopt regulations to carry out the                                                             
    purposes of this section, including standards and procedures to                                                             
    allocate available money among applications for purchases under                                                             
    this chapter and claims for refunds under AS 43.20.046 when the                                                             
    total amount of the applications for purchase and claims for refund                                                         
    exceed the amount of available money in the fund. The regulations                                                           
    adopted by the department may not, when allocating available                                                                
    money in the fund under this section, distinguish an application                                                            
    for the purchase of a credit certificate issued under former                                                                
    AS 43.55.023(m) or AS 43.55.023(p) or a claim for refund under                                                          
    AS 43.20.046."                                                                                                              
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 19, following line 13:                                                                                                     
    Insert a new bill section to read:                                                                                          
"* Sec. 36. AS 43.55.890 is amended to read:                                                                                  
         Sec. 43.55.890. Disclosure of tax information.                                                                       
    Notwithstanding any contrary provision of AS 40.25.100, and                                                                 
    regardless of whether the information is considered under                                                                   
    AS 43.05.230(e) to constitute statistics classified to prevent the                                                          
    identification of particular returns or reports, the department may                                                         
    publish the following information under this chapter, if aggregated                                                         
    among three or more producers or explorers, showing, by month                                                               
    or calendar year and by lease or property, unit, or area of the state:                                                      
             (1)  the amount of oil or gas production;                                                                          
             (2)  the amount of taxes levied under this chapter or paid                                                         

2011-03-31                     House Journal                      Page 0673
    under this chapter;                                                                                                         
            (3)  the effective tax rates under this chapter;                                                                   
             (4)  the gross value of oil or gas at the point of                                                                 
    production;                                                                                                                 
             (5)  the transportation costs for oil or gas;                                                                      
             (6)  qualified capital expenditures, as defined in                                                                 
    AS 43.55.023;                                                                                                               
             (7)  exploration expenditures under AS 43.55.025;                                                                  
             (8)  production tax values of oil or gas under                                                                     
    AS 43.55.160;                                                                                                               
              (9)  lease expenditures under AS 43.55.165;                                                                      
             (10)  adjustments to lease expenditures under                                                                      
    AS 43.55.170;                                                                                                               
             (11)  tax credits applicable or potentially applicable                                                             
    against taxes levied by this chapter [; THE INFORMATION                                                                     
    RELATING TO TAX CREDITS UNDER THIS PARAGRAPH,                                                                               
    TO THE EXTENT THE INFORMATION IS AVAILABLE TO                                                                               
    THE DEPARTMENT, MUST INCLUDE THE STATUTORY                                                                                  
    AUTHORITY FOR EACH TYPE OF CREDIT TAKEN, THE                                                                                
    AMOUNT OF CREDITS TAKEN UNDER EACH STATUTE                                                                                  
    AUTHORIZING A TAX CREDIT, AND WHETHER THE                                                                                   
    CREDIT IS FOR AN EXPENDITURE RELATED TO OIL OR                                                                              
    GAS EXPLORATION, DEVELOPMENT, OR PRODUCTION,                                                                                
    INCLUDING THE DRILLING OF WELLS; PERFORMING                                                                                 
    WORK ON EXISTING WELLS; CONDUCTING                                                                                          
    GEOLOGICAL OR GEOPHYSICAL EXPLORATION;                                                                                      
    ACQUIRING, CONSTRUCTING, OR INSTALLING NEW                                                                                  
    FACILITIES OR EQUIPMENT; AND MAINTAINING,                                                                                   
    REPAIRING, OR REPLACING EXISTING FACILITIES OR                                                                              
    EQUIPMENT]."                                                                                                                
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 19, following line 18:                                                                                                     
    Insert a new bill section to read:                                                                                          
"* Sec. 38. AS 43.56.160 is amended to read:                                                                                  
         Sec. 43.56.160. Interest and penalty. When the tax levied by                                                         
    AS 43.56.010(a) becomes delinquent, a penalty of 10 percent shall                                                           
    be added. Interest on the delinquent taxes, exclusive of penalty,                                                           
    shall be assessed at a rate of eight percent a year [THE RATE                                                           

2011-03-31                     House Journal                      Page 0674
    SPECIFIED IN AS 43.05.225(1)]."                                                                                             
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 19, following line 29:                                                                                                     
    Insert a new bill section to read:                                                                                          
"* Sec. 40. AS 43.77.020(d) is amended to read:                                                                               
         (d)  A person subject to the tax under this chapter shall make                                                         
    quarterly payments of the tax estimated to be due for the year, as                                                          
    required under regulations adopted by the department. A taxpayer                                                            
    will be subject to an estimated tax penalty, determined by                                                                  
    applying the interest rate specified in AS 43.05.225                                                                    
    [AS 43.05.225(1)] to the underpayment for each quarter, unless                                                              
    the taxpayer makes estimated tax payments in equal installments                                                             
    that total either                                                                                                           
             (1)  at least 90 percent of the taxpayer's tax liability under                                                     
    this chapter for the tax year; or                                                                                           
             (2)  at least 100 percent of the taxpayer's tax liability                                                          
    under this chapter for the prior tax year."                                                                                 
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 20, following line 2:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 42. AS 43.90.430 is amended to read:                                                                                  
         Sec. 43.90.430. Interest. When a payment due to the state                                                            
    under this chapter becomes delinquent, the payment bears interest                                                           
    at the rate applicable to a delinquent tax under AS 43.05.225                                                           
    [AS 43.05.225(1)]."                                                                                                         
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 20, line 6:                                                                                                                
    Delete "Sections 10 - 12, 14, 16, and 28"                                                                                   
    Insert "Sections 19, 21, 23, 26, 28, and 43"                                                                                
                                                                                                                                
Page 20, line 8:                                                                                                                
    Delete "Sections 6 - 8"                                                                                                     
    Insert "Sections 11, 13, and 15"                                                                                            
                                                                                                                                

2011-03-31                     House Journal                      Page 0675
Page 20, line 9:                                                                                                                
    Delete "Sections 15 and 17"                                                                                                 
    Insert "Sections 20, 22, 25, 27, 29, and 30"                                                                                
                                                                                                                                
Page 20, line 10:                                                                                                               
    Delete "2020"                                                                                                               
    Insert "2014"                                                                                                               
                                                                                                                                
Page 20, following line 10:                                                                                                     
    Insert a new subsection to read:                                                                                            
    "(d)  Sections 12, 14, and 16 of this Act apply to oil and gas                                                              
produced after December 31, 2014."                                                                                              
                                                                                                                                
Page 20, line 19:                                                                                                               
    Delete "Sections 10 - 12, 14, 16, 22, 23, and 28"                                                                           
    Insert "Sections 19, 21, 23, 26, 28, 31, 33, and 43"                                                                        
                                                                                                                                
Page 20, line 21:                                                                                                               
    Delete "Section 24"                                                                                                         
    Insert "Section 35"                                                                                                         
                                                                                                                                
Page 20, line 22:                                                                                                               
    Delete "Sections 6 - 8 and 29(b)"                                                                                           
    Insert "Sections 11, 13, 15, and 44(b)"                                                                                     
                                                                                                                                
Page 20, line 23:                                                                                                               
    Delete "Sections 15, 17, and 29(c)"                                                                                         
    Insert "Sections 2, 4, 6, 8, 10, 12, 14, 16, 18, 20, 22, 25, 27, 29,                                                        
30, 32, 34, 36, 38, 40, 42, and 44(c)"                                                                                          
    Delete "2021"                                                                                                               
    Insert "2015"                                                                                                               
                                                                                                                                
Page 20, line 24:                                                                                                               
    Delete "Sections 10 - 12, 14, 16, 22, 23, 28, 29(a), and 31"                                                                
    Insert "Sections 19, 21, 23, 26, 28, 31, 33, 43, 44(a), and 46"                                                            
                                                                                                                                
Page 20, line 26:                                                                                                               
    Delete "secs. 32 - 35"                                                                                                      
    Insert "secs. 47 - 50"                                                                                                      
                                                                                                                                

2011-03-31                     House Journal                      Page 0676
Representative Doogan moved and asked unanimous consent that                                                                    
Amendment No. 1 be adopted.                                                                                                     
                                                                                                                                
Representative Fairclough objected.                                                                                             
                                                                                                                                
The question being:  "Shall Amendment No. 1 be adopted?"  The roll                                                              
was taken with the following result:                                                                                            
                                                                                                                                
CSHB 110(FIN)                                                                                                                   
Second Reading                                                                                                                  
Amendment No. 1                                                                                                                 
                                                                                                                                
YEAS:  11   NAYS:  26   EXCUSED:  2   ABSENT:  1                                                                              
                                                                                                                                
Yeas:  Doogan, Gara, Gardner, Gruenberg, Guttenberg, Holmes,                                                                    
Kawasaki, Kerttula, Miller, Petersen, Tuck                                                                                      
                                                                                                                                
Nays:  Austerman, Chenault, Costello, Dick, Edgmon, Fairclough,                                                                 
Feige, Foster, Gatto, Hawker, Herron, Johansen, Johnson, Joule, Lynn,                                                           
Millett, Munoz, Olson, Pruitt, Saddler, Seaton, Stoltze, Thomas,                                                                
Thompson, P.Wilson, T.Wilson                                                                                                    
                                                                                                                                
Excused:  Cissna, Neuman                                                                                                        
                                                                                                                                
Absent:  Keller                                                                                                                 
                                                                                                                                
And so, Amendment No. 1 was not adopted.                                                                                        
                                                                                                                                
Amendment No. 2 was offered by Representative Miller:                                                                           
                                                                                                                                
Page 3, lines 3 - 21:                                                                                                           
    Delete all material and insert:                                                                                             
"* Sec. 6. AS 43.55.011(e) is amended to read:                                                                                
         (e)  There is levied on the producer of oil or gas a tax for all                                                       
    oil and gas produced each calendar year 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 landowner's royalty                                                          
    interest. Except as otherwise provided under (f), (j), (k), and (o) of                                                      
    this section,                                                                                                               
             (1)  and except as provided in (2) of this subsection, the                                                     
    tax is equal to the sum of [(1)] the annual production tax value of                                                         
    the taxable oil and gas                                                                                                     
                  (A)  produced from a lease or property not                                                                

2011-03-31                     House Journal                      Page 0677
         described in (B) of this paragraph as calculated under AS                                                          
         43.55.160(a)(1) multiplied by 25 percent, and the sum, over                                                        
         all months of the calendar year, of the tax amounts                                                                
         determined under (g)(1) of this section; and                                                                       
                  (B)  produced during the first seven consecutive                                                          
         years after the start of sustained production or produced                                                          
         during the first seven years after the effective date of this                                                      
         bill section, whichever is later, from a lease or property                                                         
         containing land that was not or previously had not been                                                            
         within a unit or in commercial production as of December                                                           
         31, 2008, as calculated under AS 43.55.160(a)(1) multiplied                                                        
         by 15 percent, and [(2)] the sum, over all months of the                                                           
         calendar year, of the tax amounts determined under (g)(2)                                                          
         [(g)] of this section;                                                                                             
             (2)  the tax is equal to the annual production tax value                                                       
    of the taxable oil and gas as calculated under AS                                                                       
    43.55.160(a)(1) multiplied by 25 percent added to the sum,                                                              
    over all months of the calendar year, of the tax amounts                                                                
      determined under (g)(3) of this section, for a producer that                                                         
                  (A)  produces oil or gas after December 31, 2016,                                                         
         and before January 1, 2018, and produced or whose                                                                  
         predecessor produced oil or gas after December 31, 2009,                                                           
         and before January 1, 2011, but produced less than 10                                                              
         percent more oil or gas during the period after December                                                           
         31, 2016, and before January 1, 2018, than the producer                                                            
         or the predecessor to the producer produced after                                                                  
           December 31, 2009, and before January 1, 2011; or                                                               
                  (B)  is not included in (A) of this paragraph and                                                         
         produces oil or gas after December 31, 2016, or a                                                                  
         producer described in (A) of this paragraph that produces                                                          
         oil or gas after December 31, 2017, but fails to produce                                                           
         two percent more oil or gas than the person or the                                                                 
         predecessor to the person produced during the                                                                      
         immediately preceding calendar year."                                                                              
                                                                                                                                
                                                                                                                                
Page 3, line 26:                                                                                                                
    Delete "(e)(1)"                                                                                                             
    Insert "(e)(1)(A)"                                                                                                          
                                                                                                                                

2011-03-31                     House Journal                      Page 0678
Page 5, line 26:                                                                                                                
    Delete "(e)(2)"                                                                                                             
    Insert "(e)(1)(B)"                                                                                                          
                                                                                                                                
Page 7, line 25, following "$92.50":                                                                                            
    Insert ";                                                                                                                   
             (3)  of (e)(2) of this section is determined by multiplying                                                        
    the monthly production tax value of the taxable oil and gas                                                                 
    produced during the month by the tax rate calculated as follows:                                                           
                  (A)  if the producer's average monthly production tax                                                         
         value of a BTU equivalent barrel of the taxable oil and gas for                                                        
         the month is not more than $92.50, the tax rate is 0.4 percent                                                         
         multiplied by the number that represents the difference                                                                
         between that average monthly production tax value of a BTU                                                             
         equivalent barrel and $30; or                                                                                          
                  (B)  if the producer's average monthly production tax                                                         
         value of a BTU equivalent barrel of the taxable oil and gas for                                                        
         the month is more than $92.50, the tax rate is the sum of 25                                                           
         percent and the product of 0.1 percent multiplied by the                                                               
         number that represents the difference between the average                                                              
         monthly production tax value of a BTU equivalent barrel and                                                            
         $92.50, except that the sum determined under this                                                                      
         subparagraph may not exceed 50 percent"                                                                                
                                                                                                                                
Page 7, following line 25:                                                                                                      
    Insert a new bill section to read:                                                                                          
"* Sec. 8. AS 43.55.011 is amended by adding a new subsection to                                                              
read:                                                                                                                           
         (p)  For purposes of (e) of this section,                                                                              
             (1)  "sustained production" has the meaning given in AS                                                            
    43.55.025(l); and                                                                                                           
             (2)  production during the applicable periods is measured                                                          
    in BTU equivalent barrels."                                                                                                 
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 20, line 6:                                                                                                                
    Delete "Sections 10 - 12, 14, 16, and 28"                                                                                   
    Insert "Sections 11 - 13, 15, 17, and 29"                                                                                   
                                                                                                                                

2011-03-31                     House Journal                      Page 0679
Page 20, line 8:                                                                                                                
    Delete "Sections 6 - 8"                                                                                                     
    Insert "AS 43.55.011(e)(1), as enacted by sec. 6 of this Act, and                                                           
secs. 7 - 9"                                                                                                                    
                                                                                                                                
Page 20, following line 8:                                                                                                      
    Insert a new subsection to read:                                                                                            
         "(c)  AS 43.55.011(e)(2), enacted by sec. 6 of this Act, applies                                                       
    to oil and gas produced after December 31, 2016."                                                                           
                                                                                                                                
Reletter the following subsection accordingly.                                                                                  
                                                                                                                                
Page 20, line 9:                                                                                                                
    Delete "Sections 15 and 17"                                                                                                 
    Insert "Sections 16 and 18"                                                                                                 
                                                                                                                                
Page 20, line 19:                                                                                                               
    Delete "Sections 10 - 12, 14, 16, 22, 23, and 28"                                                                           
    Insert "Sections 11 - 13, 15, 17, 23, 24, and 29"                                                                           
                                                                                                                                
Page 20, line 21:                                                                                                               
    Delete "Section 24"                                                                                                         
    Insert "Section 25"                                                                                                         
                                                                                                                                
Page 20, line 22:                                                                                                               
    Delete "Sections 6 - 8 and 29(b)"                                                                                           
    Insert "Sections 6 - 9, 30(b), and 30(c)"                                                                                   
                                                                                                                                
Page 20, line 23:                                                                                                               
    Delete "Sections 15, 17, and 29(c)"                                                                                         
    Insert "Sections 16, 18, and 30(d)"                                                                                         
                                                                                                                                
Page 20, line 24:                                                                                                               
    Delete "Sections 10 - 12, 14, 16, 22, 23, 28, 29(a), and 31"                                                                
    Insert "Sections 11 - 13, 15, 17, 23, 24, 29, 30(a), and 32"                                                                
                                                                                                                                
Page 20, line 26:                                                                                                               
    Delete "secs. 32 - 35"                                                                                                      
    Insert "secs. 33 - 36"                                                                                                      
                                                                                                                                

2011-03-31                     House Journal                      Page 0680
Representative Miller moved and asked unanimous consent that                                                                    
Amendment No. 2 be adopted.                                                                                                     
                                                                                                                                
Representative Fairclough objected.                                                                                             
                                                                                                                                
The question being:  "Shall Amendment No. 2 be adopted?"  The roll                                                              
was taken with the following result:                                                                                            
                                                                                                                                
CSHB 110(FIN)                                                                                                                   
Second Reading                                                                                                                  
Amendment No. 2                                                                                                                 
                                                                                                                                
YEAS:  13   NAYS:  24   EXCUSED:  2   ABSENT:  1                                                                              
                                                                                                                                
Yeas:  Doogan, Gara, Gardner, Gruenberg, Guttenberg, Holmes,                                                                    
Kawasaki, Kerttula, Miller, Munoz, Petersen, Seaton, Tuck                                                                       
                                                                                                                                
Nays:  Austerman, Chenault, Costello, Dick, Edgmon, Fairclough,                                                                 
Feige, Foster, Gatto, Hawker, Herron, Johansen, Johnson, Joule, Lynn,                                                           
Millett, Olson, Pruitt, Saddler, Stoltze, Thomas, Thompson, P.Wilson,                                                           
T.Wilson                                                                                                                        
                                                                                                                                
Excused:  Cissna, Neuman                                                                                                        
                                                                                                                                
Absent:  Keller                                                                                                                 
                                                                                                                                
And so, Amendment No. 2 was not adopted.                                                                                        
                                                                                                                                
Amendment No. 3 was offered by Representative Gardner:                                                                          
                                                                                                                                
Page 18, following line 16:                                                                                                     
    Insert new bill sections to read:                                                                                           
"* Sec. 24. AS 43.55.030(a) is amended to read:                                                                               
         (a)  A producer that produces oil or gas from a lease or                                                               
    property in the state during a calendar year, whether or not any tax                                                        
    payment is due under AS 43.55.020(a) for that oil or gas, shall file                                                        
    with the department on March 31 of the following year a                                                                     
    statement, under oath, in a form prescribed by the department,                                                              
    giving, with other information required by the department under                                                         
    a regulation adopted by the department, the following:                                                                  
             (1)  a description of each lease or property from which oil                                                        
    or gas was produced, by name, legal description, lease number, or                                                           
    accounting codes assigned by the department;                                                                                

2011-03-31                     House Journal                      Page 0681
             (2)  the names of the producer and, if different, the person                                                       
    paying the tax, if any;                                                                                                     
             (3)  the gross amount of oil and the gross amount of gas                                                           
    produced from each lease or property, and the percentage of the                                                             
    gross amount of oil and gas owned by the producer;                                                                          
             (4)  the gross value at the point of production of the oil                                                         
    and of the gas produced from each lease or property owned by the                                                            
    producer and the costs of transportation of the oil and gas;                                                                
             (5)  the name of the first purchaser and the price received                                                        
    for the oil and for the gas, unless relieved from this requirement in                                                       
    whole or in part by the department;                                                                                         
             (6)  the producer's qualified capital expenditures, as                                                             
    defined in AS 43.55.023, other lease expenditures under                                                                     
    AS 43.55.165, and adjustments or other payments or credits under                                                            
    AS 43.55.170;                                                                                                               
             (7)  the production tax values of the oil and gas under                                                            
    AS 43.55.160;                                                                                                               
             (8)  any claims for tax credits to be applied; [AND]                                                               
             (9)  calculations showing the amounts, if any, that were or                                                        
    are due under AS 43.55.020(a) and interest on any underpayment                                                              
    or overpayment; and                                                                                                     
             (10)  for each expenditure that is the basis for a credit                                                      
    claimed under AS 43.55.023 or 43.55.025, a description of the                                                           
    expenditure, a detailed description of the purpose of the                                                               
    expenditure, and a description of the lease or property for                                                             
    which the expenditure was incurred; notwithstanding                                                                     
    AS 43.05.230(a), information submitted under this paragraph                                                             
    may be disclosed to the public and shall be disclosed to the                                                            
    legislature in a report submitted within 10 days after the                                                              
    convening of the next regular legislative session following the                                                         
    date a statement is filed under this section.                                                                           
   * Sec. 25. AS 43.55.030(e) is amended to read:                                                                             
         (e)  An explorer or producer that incurs a lease expenditure                                                           
    under AS 43.55.165 or receives a payment or credit under                                                                    
    AS 43.55.170 during a calendar year but does not produce oil or                                                             
    gas from a lease or property in the state during the calendar year                                                          
    shall file with the department on March 31 of the following year a                                                          
    statement, under oath, in a form prescribed by the department,                                                              
    giving, with other information required by the department under                                                         
    a regulation adopted by the department, the following:                                                                  

2011-03-31                     House Journal                      Page 0682
             (1)  the producer's qualified capital expenditures, as                                                             
    defined in AS 43.55.023, other lease expenditures under                                                                     
    AS 43.55.165, and adjustments or other payments or credits under                                                            
    AS 43.55.170; [AND]                                                                                                         
             (2)  if the explorer or producer receives a payment or                                                             
    credit under AS 43.55.170, calculations showing whether the                                                                 
    explorer or producer is liable for a tax under AS 43.55.160(d) or                                                           
    43.55.170(b) and, if so, the amount; and                                                                                
             (3)  for each expenditure that is the basis for a credit                                                       
    claimed under this chapter, a description of the expenditure, a                                                         
    detailed description of the purpose of the expenditure, and a                                                           
    description of the lease or property for which the expenditure                                                          
    was incurred; notwithstanding AS 43.05.230(a), information                                                              
    submitted under this paragraph may be disclosed to the public                                                           
    and shall be disclosed to the legislature in a report submitted                                                         
    within 10 days after the convening of the next regular                                                                  
    legislative session following the date a statement is filed under                                                       
    this section."                                                                                                          
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 20, line 6:                                                                                                                
    Delete "Sections 10 - 12, 14, 16, and 28"                                                                                   
    Insert "Sections 10 - 12, 14, 16, and 30"                                                                                   
                                                                                                                                
Page 20, line 19:                                                                                                               
    Delete "Sections 10 - 12, 14, 16, 22, 23, and 28"                                                                           
    Insert "Sections 10 - 12, 14, 16, 22, 23, and 30"                                                                           
                                                                                                                                
Page 20, line 21:                                                                                                               
    Delete "Section 24"                                                                                                         
    Insert "Section 26"                                                                                                         
                                                                                                                                
Page 20, line 22:                                                                                                               
    Delete "Sections 6 - 8 and 29(b)"                                                                                           
    Insert "Sections 6 - 8 and 31(b)"                                                                                           
                                                                                                                                
Page 20, line 23:                                                                                                               
    Delete "Sections 15, 17, and 29(c)"                                                                                         
    Insert "Sections 15, 17, and 31(c)"                                                                                         
                                                                                                                                

2011-03-31                     House Journal                      Page 0683
Page 20, line 24:                                                                                                               
    Delete "Sections 10 - 12, 14, 16, 22, 23, 28, 29(a), and 31"                                                                
    Insert "Sections 10 - 12, 14, 16, 22, 23, 30, 31(a), and 33"                                                                
                                                                                                                                
Page 20, line 26:                                                                                                               
    Delete "secs. 32 - 35"                                                                                                      
    Insert "secs. 34 - 37"                                                                                                      
                                                                                                                                
Representative Gardner moved and asked unanimous consent that                                                                   
Amendment No. 3 be adopted.                                                                                                     
                                                                                                                                
Representative Hawker objected.                                                                                                 
                                                                                                                                
The question being:  "Shall Amendment No. 3 be adopted?"  The roll                                                              
was taken with the following result:                                                                                            
                                                                                                                                
CSHB 110(FIN)                                                                                                                   
Second Reading                                                                                                                  
Amendment No. 3                                                                                                                 
                                                                                                                                
YEAS:  11   NAYS:  26   EXCUSED:  2   ABSENT:  1                                                                              
                                                                                                                                
Yeas:  Doogan, Gara, Gardner, Gruenberg, Guttenberg, Holmes,                                                                    
Kawasaki, Kerttula, Miller, Petersen, Tuck                                                                                      
                                                                                                                                
Nays:  Austerman, Chenault, Costello, Dick, Edgmon, Fairclough,                                                                 
Feige, Foster, Gatto, Hawker, Herron, Johansen, Johnson, Joule, Lynn,                                                           
Millett, Munoz, Olson, Pruitt, Saddler, Seaton, Stoltze, Thomas,                                                                
Thompson, P.Wilson, T.Wilson                                                                                                    
                                                                                                                                
Excused:  Cissna, Neuman                                                                                                        
                                                                                                                                
Absent:  Keller                                                                                                                 
                                                                                                                                
And so, Amendment No. 3 was not adopted.                                                                                        
                                                                                                                                
                                                                                                                                
Amendment No. 4 was offered by Representative Gara:                                                                             
                                                                                                                                
Page 1, lines 1 - 8 (title amendment):                                                                                          
    Delete all material and insert:                                                                                             
    ""An Act relating to a tax credit applicable to the oil and gas                                                           
production tax based on capital expenditures; relating to the                                                                 

2011-03-31                     House Journal                      Page 0684
alternative tax credit for oil and gas exploration; and providing                                                             
for an effective date.""                                                                                                      
                                                                                                                                
Page 1, line 10, through page 20, line 26:                                                                                      
    Delete all material and insert:                                                                                             
"* Section 1.  AS 43.55.023(a) is amended to read:                                                                            
         (a)  A producer or explorer may take a tax credit for a                                                                
    qualified capital expenditure as follows:                                                                                   
             (1)  except as limited by (p) of this section,                                                                 
    notwithstanding that a qualified capital expenditure may be a                                                               
    deductible lease expenditure for purposes of calculating the                                                                
    production tax value of oil and gas under AS 43.55.160(a), unless                                                           
    a credit for that expenditure is taken under AS 38.05.180(i),                                                               
    AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or                                                                  
    explorer that incurs a qualified capital expenditure may also elect                                                         
    to apply a tax credit against a tax levied by AS 43.55.011(e) in the                                                        
    amount of 20 percent of that expenditure; however, not more than                                                            
   half of the tax credit may be applied for a single calendar year;                                                           
             (2)  a producer or explorer may take a credit for a                                                                
    qualified capital expenditure incurred in connection with                                                                   
    geological or geophysical exploration or in connection with an                                                              
    exploration well only if the producer or explorer                                                                           
                  (A)  agrees, in writing, to the applicable provisions of                                                      
         AS 43.55.025(f)(2);                                                                                                    
                  (B)  submits to the Department of Natural Resources                                                           
         all data that would be required to be submitted under                                                                  
         AS 43.55.025(f)(2).                                                                                                    
   * Sec. 2. AS 43.55.023(d) is amended to read:                                                                              
         (d)  Except as limited by (i) and (p) of this section, a person                                                    
    that is entitled to take a tax credit under this section that wishes to                                                     
    transfer the unused credit to another person or obtain a cash                                                               
    payment under AS 43.55.028 may apply to the department for                                                                  
    transferable tax credit certificates. An application under this                                                             
    subsection must be in a form prescribed by the department and                                                               
    must include supporting information and documentation that the                                                              
    department reasonably requires. The department shall grant or                                                               
    deny an application, or grant an application as to a lesser amount                                                          
    than that claimed and deny it as to the excess, not later than 120                                                          
    days after the latest of (1) March 31 of the year following the                                                             
    calendar year in which the qualified capital expenditure or carried-                                                        

2011-03-31                     House Journal                      Page 0685
    forward annual loss for which the credit is claimed was incurred;                                                           
    (2) the date the statement required under AS 43.55.030(a) or (e)                                                            
    was filed for the calendar year in which the qualified capital                                                              
    expenditure or carried-forward annual loss for which the credit is                                                          
    claimed was incurred; or (3) the date the application was received                                                          
    by the department. If, based on the information then available to                                                           
    it, the department is reasonably satisfied that the applicant is                                                            
    entitled to a credit, the department shall issue the applicant two                                                          
    transferable tax credit certificates, each for half of the amount of                                                        
    the credit. The credit shown on one of the two certificates is                                                              
    available for immediate use. The credit shown on the second of                                                              
    the two certificates may not be applied against a tax for a calendar                                                        
    year earlier than the calendar year following the calendar year in                                                          
    which the certificate is issued, and the certificate must contain a                                                         
    conspicuous statement to that effect. A certificate issued under                                                            
    this subsection does not expire.                                                                                            
   * Sec. 3. AS 43.55.023 is amended by adding a new subsection to                                                            
read:                                                                                                                           
         (p)  The amount of credit for a capital expenditure under (a)                                                          
    of this section for an expenditure that is also a lease expenditure                                                         
    under AS 43.55.165 is reduced by the amount necessary so that                                                               
    the tax benefit percentage is not more than 85 percent of the                                                               
    capital expenditure. The amount of credit for a capital expenditure                                                         
    under (a) of this section that may not be taken because of the                                                              
    limitation in this subsection may not be applied in a later calendar                                                        
    year under (c) of this section and may not be included in an                                                                
    application for a tax credit certificate under (d) of this section. In                                                      
    this subsection, "tax benefit percentage" means the sum of the                                                              
    average monthly tax rate under AS 43.55.011(e) for the calendar                                                             
    year in which the credit is taken and the percentage of the capital                                                         
    expenditure that may be taken as a credit under (a) of this section.                                                        
   * Sec. 4. AS 43.55.025(a) is amended to read:                                                                              
         (a)  Subject to the terms and conditions of this section and                                                       
    except as limited by (n) of this section, a credit against the                                                          
    production tax levied by AS 43.55.011(e) is allowed for                                                                     
    exploration expenditures that qualify under (b) of this section in                                                          
    an amount equal to 50 [ONE OF THE FOLLOWING:                                                                            
             (1)  30] percent of the total exploration expenditures                                                             
    except that the amount of the credit is [THAT QUALIFY                                                                   
    ONLY UNDER (b) AND (c) OF THIS SECTION;                                                                                     

2011-03-31                     House Journal                      Page 0686
             (2)  30 PERCENT OF THE TOTAL EXPLORATION                                                                           
    EXPENDITURES THAT QUALIFY ONLY UNDER (b) AND                                                                                
    (d) OF THIS SECTION;                                                                                                        
             (3)  40 PERCENT OF THE TOTAL EXPLORATION                                                                           
    EXPENDITURES THAT QUALIFY UNDER (b), (c), AND (d)                                                                           
    OF THIS SECTION;                                                                                                            
             (4)  40 PERCENT OF THE TOTAL EXPLORATION                                                                           
    EXPENDITURES THAT QUALIFY ONLY UNDER (b) AND                                                                                
    (e) OF THIS SECTION; OR                                                                                                     
             (5)]  80, 90, or 100 percent, or a lesser amount described                                                         
    in (l) of this section, of the total exploration expenditures                                                               
    described in (b)(1) and (2) of this section and not excluded by                                                             
    (b)(3) and (4) of this section that qualify only under (l) of this                                                          
    section.                                                                                                                    
   * Sec. 5. 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 after June 30, 2008, and before July 1, 2021 [2016],                                                          
    and                                                                                                                         
             (1)  may be for seismic or other 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 a well that encounters an oil or                                                       
         gas deposit or a dry hole;                                                                                             
                  (C)  must be for a well that has been completed,                                                              
         suspended, or abandoned at the time the explorer claims the                                                            
         tax credit under (f) of this section; and                                                                              
                  (D)  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 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; costs,                                                                

2011-03-31                     House Journal                      Page 0687
    including repairs and replacements, arising from or associated                                                              
    with fraud, wilful misconduct, gross negligence, criminal                                                                   
    negligence, or violation of law, including a violation of 33 U.S.C.                                                         
    1319(c)(1) or 1321(b)(3) (Clean Water Act); 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 before May 14, 2003.                                                                       
   * Sec. 6. AS 43.55.025(k) is amended to read:                                                                              
         (k)  Subject to the terms and conditions of this section, if a                                                         
    claim is filed under (f)(1) of this section before January 1, 2021                                                      
    [2016], a credit against the production tax levied by                                                                       
    AS 43.55.011(e) is allowed in an amount equal to five percent of                                                            
    an eligible expenditure under this subsection incurred for seismic                                                          
    exploration performed before July 1, 2003. To be eligible under                                                             
    this subsection, an expenditure must                                                                                        
             (1)  have been for seismic exploration that                                                                        
                  (A)  obtained data that the commissioner of natural                                                           
         resources considers to be in the best interest of the state to                                                         
         acquire for public distribution; and                                                                                   
                  (B)  was conducted outside the boundaries of a                                                                
         production unit; however, the amount of the expenditure that                                                           
         is otherwise eligible under this section is reduced                                                                    
         proportionately by the portion of the seismic exploration                                                              
         activity that crossed into a production unit; and                                                                      
             (2)  qualify under (b)(3) of this section.                                                                         
   * Sec. 7. AS 43.55.025 is amended by adding a new subsection to                                                            
read:                                                                                                                           
         (n)  Except for a credit for an exploration expenditure                                                                
    described in (l) of this section, the amount of credit for an                                                               
    exploration expenditure under (a) of this section for an                                                                    
    expenditure that is also a lease expenditure under AS 43.55.165 is                                                          
    reduced by the amount necessary so that the tax benefit percentage                                                          
    is not more than 85 percent of the exploration expenditure. Except                                                          
    for a credit, other than a credit for an exploration expenditure                                                            
    described in (l) of this section, the amount of credit for an                                                               
    exploration expenditure under (a) of this section that may not be                                                           
    taken because of the limitation in this subsection may not be                                                               
    transferred, conveyed, or sold under (g) of this section. In this                                                           
    subsection, "tax benefit percentage" means the sum of the average                                                           

2011-03-31                     House Journal                      Page 0688
    monthly tax rate under AS 43.55.011(e) for the calendar year in                                                             
    which the credit is taken and the percentage of the exploration                                                             
    expenditure, other than an exploration expenditure described in (l)                                                         
    of this section, that may be taken as a credit under (a) of this                                                            
    section.                                                                                                                    
   * Sec. 8. AS 43.55.025(d), 43.55.025(e), and 43.55.025(m) are                                                              
repealed.                                                                                                                       
   * Sec. 9. This Act takes effect January 1, 2012."                                                                          
                                                                                                                                
Representative Gara moved and asked unanimous consent that                                                                      
Amendment No. 4 be adopted.                                                                                                     
                                                                                                                                
Representative Millett objected.                                                                                                
HB 110                                                                                                                        
The following was before the House with Amendment No. 4 (page                                                                   
683) moved and pending:                                                                                                         
                                                                                                                                
    CS FOR HOUSE BILL NO. 110(FIN)                                                                                              
    "An Act relating to the interest rate applicable to certain amounts                                                         
    due for fees, taxes, and payments made and property delivered to                                                            
    the Department of Revenue; relating to the oil and gas production                                                           
    tax rate; relating to monthly installment payments of the oil and                                                           
    gas production tax; relating to oil and gas production tax credits,                                                         
    including qualified capital credits for exploration, development,                                                           
    and production; relating to certain additional nontransferable oil                                                          
    and gas production tax credits; relating to the disclosure of certain                                                       
    tax information; making conforming amendments; and providing                                                                
    for an effective date."                                                                                                     
                                                                                                                                

2011-03-31                     House Journal                      Page 0689
The question being:  "Shall Amendment No. 4 be adopted?"  The roll                                                              
was taken with the following result:                                                                                            
                                                                                                                                
CSHB 110(FIN)                                                                                                                   
Second Reading                                                                                                                  
Amendment No. 4                                                                                                                 
                                                                                                                                
YEAS:  11   NAYS:  27   EXCUSED:  2   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Doogan, Gara, Gardner, Gruenberg, Guttenberg, Holmes,                                                                    
Kawasaki, Kerttula, Miller, Petersen, Tuck                                                                                      
                                                                                                                                
Nays:  Austerman, Chenault, Costello, Dick, Edgmon, Fairclough,                                                                 
Feige, Foster, Gatto, Hawker, Herron, Johansen, Johnson, Joule,                                                                 
Keller, Lynn, Millett, Munoz, Olson, Pruitt, Saddler, Seaton, Stoltze,                                                          
Thomas, Thompson, P.Wilson, T.Wilson                                                                                            
                                                                                                                                
Excused:  Cissna, Neuman                                                                                                        
                                                                                                                                
And so, Amendment No. 4 was not adopted.                                                                                        
                                                                                                                                
Amendment No. 5 was offered by Representative Gara:                                                                             
                                                                                                                                
Page 1, lines 1 - 8 (title amendment):                                                                                          
    Delete all material and insert:                                                                                             
    ""An Act providing for a tax credit applicable to the oil and                                                             
gas production tax based on capital expenditures for a production                                                             
facility for new oil and gas production; and providing for an                                                                 
effective date.""                                                                                                             
                                                                                                                                
Page 1, line 10, through page 20, line 26:                                                                                      
    Delete all material and insert:                                                                                             
"* Section 1. AS 43.20.043(g) is amended to read:                                                                             
         (g)  A taxpayer that obtains a credit for a qualified capital                                                          
    investment or cost incurred for qualified services under this                                                               
    section may not also claim a tax credit or royalty modification for                                                         
    the same qualified capital investment or cost incurred for qualified                                                        
    services under AS 38.05.180(i), AS 41.09.010, AS 43.55.023,                                                                 
    [OR] 43.55.025, or 43.55.026. However, a taxpayer may elect not                                                         
    to obtain a credit under this section in order to qualify for a credit                                                      
    provided under AS 38.05.180(i), AS 41.09.010, AS 43.55.023,                                                                 
    [OR] 43.55.025, or 43.55.026.                                                                                           
   * Sec. 2. AS 43.55.023(a) is amended to read:                                                                              

2011-03-31                     House Journal                      Page 0690
         (a)  A producer or explorer may take a tax credit for a                                                                
    qualified capital expenditure as follows:                                                                                   
             (1)  except as limited by (p) of this section,                                                                 
    notwithstanding that a qualified capital expenditure may be a                                                               
    deductible lease expenditure for purposes of calculating the                                                                
    production tax value of oil and gas under AS 43.55.160(a), unless                                                           
    a credit for that expenditure is taken under AS 38.05.180(i),                                                               
    AS 41.09.010, AS 43.20.043, [OR] AS 43.55.025, or 43.55.026, a                                                          
    producer or explorer that incurs a qualified capital expenditure                                                            
    may also elect to apply a tax credit against a tax levied by                                                                
    AS 43.55.011(e) in the amount of 20 percent of that expenditure;                                                            
    however, not more than half of the tax credit may be applied for a                                                          
    single calendar year;                                                                                                       
             (2)  a producer or explorer may take a credit for a                                                                
    qualified capital expenditure incurred in connection with                                                                   
    geological or geophysical exploration or in connection with an                                                              
    exploration well only if the producer or explorer                                                                           
                  (A)  agrees, in writing, to the applicable provisions of                                                      
         AS 43.55.025(f)(2);                                                                                                    
                  (B)  submits to the Department of Natural Resources                                                           
         all data that would be required to be submitted under                                                                  
         AS 43.55.025(f)(2).                                                                                                    
   * Sec. 3. AS 43.55.023(d) is amended to read:                                                                              
         (d)  Except as limited by (i) and (p) of this section, a person                                                    
    that is entitled to take a tax credit under this section that wishes to                                                     
    transfer the unused credit to another person or obtain a cash                                                               
    payment under AS 43.55.028 may apply to the department for                                                                  
    transferable tax credit certificates. An application under this                                                             
    subsection must be in a form prescribed by the department and                                                               
    must include supporting information and documentation that the                                                              
    department reasonably requires. The department shall grant or                                                               
    deny an application, or grant an application as to a lesser amount                                                          
    than that claimed and deny it as to the excess, not later than 120                                                          
    days after the latest of (1) March 31 of the year following the                                                             
    calendar year in which the qualified capital expenditure or carried-                                                        
    forward annual loss for which the credit is claimed was incurred;                                                           
    (2) the date the statement required under AS 43.55.030(a) or (e)                                                            
    was filed for the calendar year in which the qualified capital                                                              
    expenditure or carried-forward annual loss for which the credit is                                                          
    claimed was incurred; or (3) the date the application was received                                                          

2011-03-31                     House Journal                      Page 0691
    by the department. If, based on the information then available to                                                           
    it, the department is reasonably satisfied that the applicant is                                                            
    entitled to a credit, the department shall issue the applicant two                                                          
    transferable tax credit certificates, each for half of the amount of                                                        
    the credit. The credit shown on one of the two certificates is                                                              
    available for immediate use. The credit shown on the second of                                                              
    the two certificates may not be applied against a tax for a calendar                                                        
    year earlier than the calendar year following the calendar year in                                                          
    which the certificate is issued, and the certificate must contain a                                                         
    conspicuous statement to that effect. A certificate issued under                                                            
    this subsection does not expire.                                                                                            
   * Sec. 4. AS 43.55.023 is amended by adding a new subsection to                                                            
read:                                                                                                                           
         (p)  The amount of credit for a capital expenditure under (a)                                                          
    of this section for an expenditure that is also a lease expenditure                                                         
    under AS 43.55.165 is reduced by the amount necessary so that                                                               
    the tax benefit percentage is not more than 85 percent of the                                                               
    capital expenditure. The amount of credit for a capital expenditure                                                         
    under (a) of this section that may not be taken because of the                                                              
    limitation in this subsection may not be applied in a later calendar                                                        
    year under (c) of this section and may not be included in an                                                                
    application for a tax credit certificate under (d) of this section. In                                                      
    this subsection, "tax benefit percentage" means the sum of the                                                              
    average monthly tax rate under AS 43.55.011(e) for the calendar                                                             
    year in which the credit is taken and the percentage of the capital                                                         
    expenditure that may be taken as a credit under (a) of this section.                                                        
   * Sec. 5. AS 43.55 is amended by adding a new section to read:                                                             
         Sec. 43.55.026. Production facility cost credit. (a) This                                                            
    section applies to a credit for a qualified production facility                                                             
    expenditure incurred before the date of production of oil or gas in                                                         
    paying quantities for a lease or property that is taxable under                                                             
    AS 43.55.011(e) and that contains land that, as of December 31,                                                             
    2010, is not or previously had not been within a unit or produced                                                           
    oil or gas in paying quantities.                                                                                            
         (b)  Except as limited by (g) of this section, the amount of the                                                       
    credit under this section is equal to 50 percent of the qualified                                                           
    production facility expenditures that are incurred after the                                                                
    completion of the first well drilled that discovers a pool capable of                                                       
    commercial production from the lease or property and before the                                                             
    commencement of production in paying quantities. The                                                                        

2011-03-31                     House Journal                      Page 0692
    department, in consultation with the                                                                                        
             (1)  Alaska Oil and Gas Conservation Commission, shall                                                             
    determine the date on which the first well drilled discovered a                                                             
    pool capable of production from a lease or property for which the                                                           
    credit is taken; and                                                                                                        
             (2)  Department of Natural Resources, shall determine the                                                          
    date of the commencement of production in paying quantities                                                                 
    from the lease or property for which the credit is taken.                                                                   
         (c)  The credit under this section may be applied against the                                                          
    tax due under AS 43.55.011(e) during the two-year period                                                                    
    immediately following the date of the commencement of                                                                       
    production in paying quantities.                                                                                            
         (d)  A qualified production facility expenditure that is taken as                                                      
    a credit under this section may not be used as an expenditure for                                                           
    which a credit may be taken under AS 43.20.043 or AS 43.55.023.                                                             
    A credit under AS 43.55.023 for a qualified production facility                                                             
    expenditure may not be taken against the tax due under                                                                      
    AS 43.55.011(e) during the same month in which a credit is taken                                                            
    or purchased by the department under this section.                                                                          
         (e)  A credit or portion of a credit under this section may not                                                        
    be used to reduce a taxpayer's tax liability under AS 43.55.011(e)                                                          
    below zero for any calendar month. A person eligible for the                                                                
    credit under this section that does not take the credit within the                                                          
    two-year period immediately following the date of the                                                                       
    commencement of production in paying quantities may apply to                                                                
    the department for a cash payment under AS 43.55.028. An                                                                    
    application under this subsection must be in a form prescribed by                                                           
    the department and must include supporting information and                                                                  
    documentation that the department reasonably requires. The                                                                  
    department shall grant or deny an application, or grant an                                                                  
    application as to a lesser amount than that claimed and deny it as                                                          
    to the excess, not later than 120 days after the date the department                                                        
    receives the application. If, based on the information then                                                                 
    available to it, the department is reasonably satisfied that the                                                            
    applicant is entitled to a payment, the department shall issue the                                                          
    cash payment or a lesser amount after applying all or a portion of                                                          
    the credit to any outstanding unpaid balance of a tax owed by the                                                           
    applicant under this title.                                                                                                 
         (f)  The department shall adopt regulations describing the                                                             
    procedures for determining the amount of the credit, record                                                                 

2011-03-31                     House Journal                      Page 0693
    keeping, verification of the accuracy of the credit claimed, and                                                            
    other regulations necessary to administer this section.                                                                     
         (g)  The amount of credit for a qualified production facility                                                          
    expenditure under this section for an expenditure that is also a                                                            
    lease expenditure under AS 43.55.165 is reduced by the amount                                                               
    necessary so that the tax benefit percentage is not more than 85                                                            
    percent of the qualified production facility expenditure. The                                                               
    amount of credit for a qualified production facility expenditure                                                            
    under this section that may not be taken because of the limitation                                                          
    in this subsection may not be included in an application for a cash                                                         
    payment under (e) of this section. In this subsection, "tax benefit                                                         
    percentage" means the sum of the average monthly tax rate under                                                             
    AS 43.55.011(e) for the calendar year in which the credit is taken                                                          
    and the percentage of the qualified production facility expenditure                                                         
    that may be taken as a credit under this section.                                                                           
         (h)  In this section,                                                                                                  
             (1)  "production facility" means a facility that is upstream                                                       
    from the point of production and is a flow station, a gathering                                                             
    center, a pump station, a storage tank, and a related appurtenance,                                                         
    or other facility that gathers, cleans, dehydrates, conditions, or                                                          
    stores crude oil, natural gas, or associated hydrocarbons and that is                                                       
    located on a lease or property leased from the state;                                                                       
             (2)  "production in paying quantities" means production                                                            
    of oil and gas in quantities sufficient to recover the cost of                                                              
    operating, although the quantity may be insufficient to recover the                                                         
    cost of drilling;                                                                                                           
             (3)  "qualified production facility expenditure" means an                                                          
    expenditure for a production facility that may be recognized as a                                                           
    qualified capital expenditure as defined in AS 43.55.023.                                                                   
   * Sec. 6. AS 43.55.028(a) is amended to read:                                                                              
         (a)  The oil and gas tax credit fund is established as a separate                                                      
    fund of the state. The purpose of the fund is to purchase                                                                   
    transferable tax credit certificates issued under AS 43.55.023 and                                                          
    production tax credit certificates issued under AS 43.55.025 and                                                            
    to pay for unused credits under AS 43.55.026 that qualify for a                                                         
    cash payment and  refunds claimed under AS 43.20.046.                                                                   
   * Sec. 7. AS 43.55.028(g) is amended to read:                                                                              
         (g)  The department may adopt regulations to carry out the                                                             
    purposes of this section, including standards and procedures to                                                             
    allocate available money among applications for purchases and                                                           

2011-03-31                     House Journal                      Page 0694
    payments for unused credits under this chapter and claims for                                                           
    refunds under AS 43.20.046 when the total amount of the                                                                     
    applications for purchase and claims for refund exceed the amount                                                           
    of available money in the fund. The regulations adopted by the                                                              
    department may not, when allocating available money in the fund                                                             
    under this section, distinguish an application for the purchase of a                                                        
    credit certificate issued under AS 43.55.023(m), a payment for                                                          
    an unused credit that qualifies for a cash payment under                                                                
    AS 43.55.026, or a claim for refund under AS 43.20.046.                                                                 
   * Sec. 8. AS 43.55.028 is amended by adding a new subsection to                                                            
read:                                                                                                                           
         (j)  The department, on the written application of a person for                                                        
    the payment of an unused credit that qualifies for a cash payment                                                           
    under AS 43.55.026 after the end of the two-year period                                                                     
    immediately following the date of the commencement of                                                                       
    production in paying quantities, may use available money in the                                                             
    oil and gas tax credit fund to purchase, in whole or in part, the                                                           
    certificate if the department finds that                                                                                    
             (1)  the applicant does not have an outstanding liability to                                                       
    the state for unpaid delinquent taxes under this title;                                                                     
             (2)  the applicant's total tax liability under                                                                     
    AS 43.55.011(e) for the calendar year in which the application is                                                           
   made, after application of all available tax credits, is zero; and                                                          
             (3)  the purchase is consistent with this section and                                                              
    regulations adopted under this section.                                                                                     
   * Sec. 9. AS 43.55.180(a) is amended to read:                                                                              
         (a)  The department shall study                                                                                        
             (1)  the effects of the provisions of this chapter on oil and                                                      
    gas exploration, development, and production in the state, on                                                               
    investment expenditures for oil and gas exploration, development,                                                           
    and production in the state, on the entry of new producers into the                                                         
    oil and gas industry in the state, on state revenue, and on tax                                                             
    administration and compliance, giving particular attention to the                                                           
    tax rates provided under AS 43.55.011, the tax credits provided                                                             
    under AS 43.55.023 - 43.55.026 [AS 43.55.023 - 43.55.025], and                                                          
    the deductions for and adjustments to lease expenditures provided                                                           
    under AS 43.55.160 - 43.55.170; and                                                                                         
             (2)  the effects of the tax rates under AS 43.55.011(i) on                                                         
    state revenue and on oil and gas exploration, development, and                                                              
    production on private land, and the fairness of those tax rates for                                                         

2011-03-31                     House Journal                      Page 0695
    private landowners.                                                                                                         
   * Sec. 10. This Act takes effect January 1, 2012."                                                                         
                                                                                                                                
Representative Gara moved and asked unanimous consent that                                                                      
Amendment No. 5 be adopted.                                                                                                     
                                                                                                                                
Representative Millett objected.                                                                                                
                                                                                                                                
The question being:  "Shall Amendment No. 5 be adopted?"  The roll                                                              
was taken with the following result:                                                                                            
                                                                                                                                
CSHB 110(FIN)                                                                                                                   
Second Reading                                                                                                                  
Amendment No. 5                                                                                                                 
                                                                                                                                
YEAS:  11   NAYS:  27   EXCUSED:  2   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Doogan, Gara, Gardner, Gruenberg, Guttenberg, Holmes,                                                                    
Kawasaki, Kerttula, Miller, Petersen, Tuck                                                                                      
                                                                                                                                
Nays:  Austerman, Chenault, Costello, Dick, Edgmon, Fairclough,                                                                 
Feige, Foster, Gatto, Hawker, Herron, Johansen, Johnson, Joule,                                                                 
Keller, Lynn, Millett, Munoz, Olson, Pruitt, Saddler, Seaton, Stoltze,                                                          
Thomas, Thompson, P.Wilson, T.Wilson                                                                                            
                                                                                                                                
Excused:  Cissna, Neuman                                                                                                        
                                                                                                                                
Gardner changed from "Nay" to "Yea".                                                                                            
                                                                                                                                
And so, Amendment No. 5 was not adopted.                                                                                        
                                                                                                                                
Amendment No. 6 was offered by Representatives Herron, Edgmon,                                                                  
and Joule:                                                                                                                      
                                                                                                                                
Page 5, line 13, following "$92.50":                                                                                            
    Insert "but not more than $105"                                                                                             
                                                                                                                                
Page 5, following line 25:                                                                                                      
    Insert new material to read:                                                                                                
                  "(G)  if the producer's average monthly production                                                            
         tax value of a BTU equivalent barrel of the taxable oil and gas                                                        
         for the month is more than $105 but not more than $117.50,                                                             
         the tax rates are                                                                                                      

2011-03-31                     House Journal                      Page 0696
                      (i)  2.5 percent on the first $12.50 of monthly                                                           
             production tax value for each BTU equivalent barrel that                                                           
             is greater than $30;                                                                                               
                      (ii)  7.5 percent of the next higher $12.50 of                                                            
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (iii)  12.5 percent of the next higher $12.50 of                                                          
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (iv)  17.5 percent of the next higher $12.50 of                                                           
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (v)  22.5 percent of the next higher $12.50 of                                                            
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (vi)  25 percent of the next higher $12.50 of                                                             
             monthly production tax value for each BTU equivalent                                                               
             barrel; and                                                                                                        
                      (vii)  30 percent of the monthly production tax                                                           
             value for each BTU equivalent barrel that is greater than                                                          
             $105;                                                                                                              
                  (H)  if the producer's average monthly production tax                                                         
         value of a BTU equivalent barrel of the taxable oil and gas for                                                        
         the month is more than $117.50, the tax rates are                                                                      
                      (i)  2.5 percent on the first $12.50 of monthly                                                           
             production tax value for each BTU equivalent barrel that                                                           
             is greater than $30;                                                                                               
                      (ii)  7.5 percent of the next higher $12.50 of                                                            
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (iii)  12.5 percent of the next higher $12.50 of                                                          
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (iv)  17.5 percent of the next higher $12.50 of                                                           
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (v)  22.5 percent of the next higher $12.50 of                                                            
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (vi)  25 percent of the next higher $12.50 of                                                             

2011-03-31                     House Journal                      Page 0697
             monthly production tax value for each BTU equivalent                                                               
             barrel;                                                                                                            
                      (vii)  30 percent of the next higher $12.50 of                                                            
             monthly production tax value for each BTU equivalent                                                               
             barrel; and                                                                                                        
                      (viii)  35 percent of the monthly production tax                                                          
             value for each BTU equivalent barrel that is greater than                                                          
             $117.50;"                                                                                                          
                                                                                                                                
Representative Herron moved and asked unanimous consent that                                                                    
Amendment No. 6 be adopted.                                                                                                     
                                                                                                                                
Representative Kerttula objected.                                                                                               
                                                                                                                                
The question being:  "Shall Amendment No. 6 be adopted?"  The roll                                                              
was taken with the following result:                                                                                            
                                                                                                                                
CSHB 110(FIN)                                                                                                                   
Second Reading                                                                                                                  
Amendment No. 6                                                                                                                 
                                                                                                                                
YEAS:  14   NAYS:  24   EXCUSED:  2   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Dick, Edgmon, Foster, Gara, Gatto, Herron, Holmes, Joule,                                                                
Kawasaki, Munoz, Petersen, Seaton, Thomas, T.Wilson                                                                             
                                                                                                                                
Nays:  Austerman, Chenault, Costello, Doogan, Fairclough, Feige,                                                                
Gardner, Gruenberg, Guttenberg, Hawker, Johansen, Johnson, Keller,                                                              
Kerttula, Lynn, Miller, Millett, Olson, Pruitt, Saddler, Stoltze,                                                               
Thompson, Tuck, P.Wilson                                                                                                        
                                                                                                                                
Excused:  Cissna, Neuman                                                                                                        
                                                                                                                                
And so, Amendment No. 6 was not adopted.                                                                                        
                                                                                                                                
CSHB 110(FIN) was automatically in third reading.                                                                               
                                                                                                                                
The question being:  "Shall CSHB 110(FIN) pass the House?"  The                                                                 
roll was taken with the following result:                                                                                       
                                                                                                                                
CSHB 110(FIN)                                                                                                                   
Third Reading                                                                                                                   
Final Passage                                                                                                                   
                                                                                                                                
YEAS:  22   NAYS:  16   EXCUSED:  2   ABSENT:  0                                                                              

2011-03-31                     House Journal                      Page 0698
Yeas:  Chenault, Costello, Dick, Fairclough, Feige, Foster, Gatto,                                                              
Hawker, Johansen, Johnson, Keller, Lynn, Millett, Munoz, Olson,                                                                 
Pruitt, Saddler, Stoltze, Thomas, Thompson, P.Wilson, T.Wilson                                                                  
                                                                                                                                
Nays:  Austerman, Doogan, Edgmon, Gara, Gardner, Gruenberg,                                                                     
Guttenberg, Herron, Holmes, Joule, Kawasaki, Kerttula, Miller,                                                                  
Petersen, Seaton, Tuck                                                                                                          
                                                                                                                                
Excused:  Cissna, Neuman                                                                                                        
                                                                                                                                
And so, CSHB 110(FIN) passed the House.                                                                                         
                                                                                                                                
Representative Austerman moved the effective date clause.                                                                       
                                                                                                                                
The question being:  "Shall the effective date clause be adopted?"  The                                                         
roll was taken with the following result:                                                                                       
                                                                                                                                
CSHB 110(FIN)                                                                                                                   
Third Reading                                                                                                                   
Effective Date                                                                                                                  
                                                                                                                                
YEAS:  36   NAYS:  0   EXCUSED:  2   ABSENT:  2                                                                               
                                                                                                                                
Yeas:  Austerman, Chenault, Costello, Dick, Doogan, Edgmon,                                                                     
Fairclough, Feige, Foster, Gara, Gardner, Gatto, Gruenberg,                                                                     
Guttenberg, Hawker, Herron, Holmes, Johansen, Johnson, Kawasaki,                                                                
Keller, Kerttula, Lynn, Miller, Millett, Munoz, Olson, Petersen, Pruitt,                                                        
Saddler, Seaton, Stoltze, Thomas, Thompson, Tuck, P.Wilson                                                                      
                                                                                                                                
Excused:  Cissna, Neuman                                                                                                        
                                                                                                                                
Absent:  Joule, T.Wilson                                                                                                        
                                                                                                                                
And so, the effective date clause was adopted.                                                                                  
                                                                                                                                
Representative Kerttula gave notice of reconsideration of the vote on                                                           
CSHB 110(FIN).