Legislature(2013 - 2014)
2013-04-13 House Journal
Full Journal pdf2013-04-13 House Journal Page 1208 SB 21 HCS CSSB 21(FIN) am H was before the House in second reading (page 1188). Amendment No. 6 was offered by Representatives Kerttula, Tuck, Gara, Kawasaki, Tarr, Gruenberg, Josephson, Drummond, and Kreiss-Tomkins: Page 4, line 18, following "to": Insert "the sum of (A)" Page 4, line 20, following "percent": Insert "; and (B) the sum, over all months of the calendar year, of the tax amounts determined under (g) of this section" Page 4, line 21, through page 5, line 7: Delete all material and insert: "* Sec. 5. AS 43.55.011(g) is amended to read: (g) For purposes of (e) of this section, the tax amount is determined as follows: (1) before January 1, 2014, for [FOR] each month of the calendar year for which the producer's average monthly production tax value under AS 43.55.160(a)(2) of a [PER] BTU equivalent barrel of the taxable oil and gas is more than $30, the amount of tax for purposes of (e)(1)(B) and (e)(2)(B) [(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) [(1)] if the producer's average monthly production tax value of a [PER] 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 [PER] BTU equivalent barrel and $30; or (B) [(2)] if the producer's average monthly 2013-04-13 House Journal Page 1209 production tax value of a [PER] 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 [PER] BTU equivalent barrel and $92.50, except that the sum determined under this paragraph may not exceed 50 percent; (2) on or after January 1, 2014, for each month of the calendar year for which the producer's average monthly production tax value under AS 43.55.160(a)(2) of a BTU equivalent barrel of the taxable oil and gas is more than $60, the difference between the monthly production tax value of a BTU equivalent barrel and $60 multiplied by the volume of oil and gas produced by the producer for the month multiplied by 10 percent." Renumber the following bill sections accordingly. Page 9, line 23, following "(ii)": Insert "the sum of the amount calculated for the month under AS 43.55.011(g) and" Page 10, line 7, following "(iii)": Insert "the sum of the amount calculated for the month under AS 43.55.011(g) and" Page 10, line 20, following "(ii)": Insert "the sum of the amount calculated for the month under AS 43.55.011(g) and" Page 10, line 29, following "(i)": Insert "the sum of the amount calculated for the month under AS 43.55.011(g) and" Page 11, line 18, through page 12, line 5: Delete all material. Renumber the following bill sections accordingly. 2013-04-13 House Journal Page 1210 Page 13, line 19, through page 14, line 6: Delete all material. Renumber the following bill sections accordingly. Page 29, line 24: Delete "AS 43.55.020(d), 43.55.023(i), and 43.55.023(p)" Insert "AS 43.55.023(i) and 43.55.023(p)" Page 29, line 30: Delete "sec. 28" Insert "sec. 26" Page 29, line 31: Delete "sec. 14" Insert "sec. 12" Delete "secs. 16 - 19" Insert "secs. 14 - 17" Page 30, line 11: Delete "sec. 31" Insert "sec. 29" Page 30, line 15: Delete "16 - 19, 25, and 32" Insert "14 - 17, 23, and 30" Page 30, line 16: Delete "sec. 14" Insert "sec. 12" Delete "sec. 28" Insert "sec. 26" Representative Kerttula moved and asked unanimous consent that Amendment No. 6 be adopted. Representative Costello objected. 2013-04-13 House Journal Page 1211 The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: HCS CSSB 21(FIN) am H Second Reading Amendment No. 6 YEAS: 9 NAYS: 29 EXCUSED: 2 ABSENT: 0 Yeas: Drummond, Gara, Gruenberg, Josephson, Kawasaki, Kerttula, Kreiss-Tomkins, Tarr, Tuck Nays: Austerman, Chenault, Costello, Edgmon, Feige, Foster, Gattis, Hawker, Herron, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, LeDoux, Lynn, Millett, Munoz, Neuman, Olson, Pruitt, Reinbold, Saddler, Seaton, Stoltze, Thompson, P.Wilson, T.Wilson Excused: Guttenberg, Nageak And so, Amendment No. 6 was not adopted. Amendment No. 7 was offered by Representatives Tarr, Gara, Kerttula, Tuck, Kawasaki, Gruenberg, Josephson, Drummond, and Kreiss-Tomkins: Page 25, line 19, following "section,": Insert "for the first seven years immediately following the commencement of production subject to tax under AS 43.55.011(e)," Page 26, line 6, following "section,": Insert "for the first seven years immediately following the commencement of production subject to tax under AS 43.55.011(e)," Representative Tarr moved and asked unanimous consent that Amendment No. 7 be adopted. Representative Hawker objected. The question being: "Shall Amendment No. 7 be adopted?" The roll was taken with the following result: 2013-04-13 House Journal Page 1212 HCS CSSB 21(FIN) am H Second Reading Amendment No. 7 YEAS: 11 NAYS: 27 EXCUSED: 2 ABSENT: 0 Yeas: Drummond, Gara, Gruenberg, Josephson, Kawasaki, Kerttula, Kreiss-Tomkins, Munoz, Seaton, Tarr, Tuck Nays: Austerman, Chenault, Costello, Edgmon, Feige, Foster, Gattis, Hawker, Herron, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, LeDoux, Lynn, Millett, Neuman, Olson, Pruitt, Reinbold, Saddler, Stoltze, Thompson, P.Wilson, T.Wilson Excused: Guttenberg, Nageak And so, Amendment No. 7 was not adopted. Amendment No. 8 was offered by Representatives Kerttula, Gara, Tuck, Kawasaki, Tarr, Gruenberg, Josephson, Drummond, and Kreiss-Tomkins: Page 25, line 20, following "gas": Insert "produced from a unit that did not have production on January 1, 2012, and" Page 26, line 7, following "gas": Insert "produced from a unit that did not have production on January 1, 2012, and" Representative Kerttula moved and asked unanimous consent that Amendment No. 8 be adopted. Representative Costello objected. The question being: "Shall Amendment No. 8 be adopted?" The roll was taken with the following result: HCS CSSB 21(FIN) am H Second Reading Amendment No. 8 YEAS: 9 NAYS: 29 EXCUSED: 2 ABSENT: 0 2013-04-13 House Journal Page 1213 Yeas: Drummond, Gara, Gruenberg, Josephson, Kawasaki, Kerttula, Kreiss-Tomkins, Tarr, Tuck Nays: Austerman, Chenault, Costello, Edgmon, Feige, Foster, Gattis, Hawker, Herron, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, LeDoux, Lynn, Millett, Munoz, Neuman, Olson, Pruitt, Reinbold, Saddler, Seaton, Stoltze, Thompson, P.Wilson, T.Wilson Excused: Guttenberg, Nageak And so, Amendment No. 8 was not adopted. Amendment No. 9 was offered by Representatives Gara, Kerttula, Tuck, Kawasaki, Tarr, Gruenberg, Josephson, Drummond, and Kreiss-Tomkins: Page 25, line 21: Delete "20" Insert "15" Page 26, line 5, through page 26, line 16: Delete all material. Representative Gara moved and asked unanimous consent that Amendment No. 9 be adopted. Representative Feige objected. The question being: "Shall Amendment No. 9 be adopted?" The roll was taken with the following result: HCS CSSB 21(FIN) am H Second Reading Amendment No. 9 YEAS: 9 NAYS: 29 EXCUSED: 2 ABSENT: 0 Yeas: Drummond, Gara, Gruenberg, Josephson, Kawasaki, Kerttula, Kreiss-Tomkins, Tarr, Tuck 2013-04-13 House Journal Page 1214 Nays: Austerman, Chenault, Costello, Edgmon, Feige, Foster, Gattis, Hawker, Herron, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, LeDoux, Lynn, Millett, Munoz, Neuman, Olson, Pruitt, Reinbold, Saddler, Seaton, Stoltze, Thompson, P.Wilson, T.Wilson Excused: Guttenberg, Nageak And so, Amendment No. 9 was not adopted. Amendment No. 10 was offered by Representatives Kerttula, Gara, Tuck, Kawasaki, Tarr, Gruenberg, Josephson, Drummond, and Kreiss-Tomkins: Page 25, line 30, following "area.": Insert "This subsection does not apply to a lease or property that is located within a unit for more than 20 years before commercial production on the lease or property." Page 26, lines 2 - 4: Delete "In this subsection, "participating area" means a reservoir or portion of a reservoir producing or contributing to production as approved by the Department of Natural Resources." Page 26, line 14, following "calculated.": Insert "This subsection does not apply to a lease or property that is located within a unit for more than 20 years before commercial production on the lease or property." Page 26, following line 16: Insert a new subsection to read: "(h) In this section, (1) "commercial production" means the production of oil for the purpose of sale or other beneficial use, except when the sale or beneficial use is incidental to the testing of an unproven well or unproven completion interval; and (2) "participating area" means a reservoir or portion of a reservoir producing or contributing to production as approved by the Department of Natural Resources." 2013-04-13 House Journal Page 1215 Representative Kerttula moved and asked unanimous consent that Amendment No. 10 be adopted. Representative Feige objected. The question being: "Shall Amendment No. 10 be adopted?" The roll was taken with the following result: HCS CSSB 21(FIN) am H Second Reading Amendment No. 10 YEAS: 8 NAYS: 27 EXCUSED: 2 ABSENT: 3 Yeas: Drummond, Gara, Gruenberg, Josephson, Kawasaki, Kerttula, Tarr, Tuck Nays: Austerman, Chenault, Costello, Edgmon, Feige, Gattis, Hawker, Herron, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, Lynn, Millett, Munoz, Neuman, Olson, Pruitt, Reinbold, Saddler, Seaton, Stoltze, Thompson, P.Wilson, T.Wilson Excused: Guttenberg, Nageak Absent: Foster, Kreiss-Tomkins, LeDoux And so, Amendment No. 10 was not adopted. Amendment No. 11 was offered by Representatives Kawasaki, Gara, Kerttula, Tuck, Tarr, Gruenberg, Josephson, Drummond, and Kreiss-Tomkins: Page 1, line 5 (title amendment): Delete "rate" Insert "rates" Page 2, line 1 (title amendment): Delete "and" Page 2, line 2, following "amendments" (title amendment): Insert "; and providing for an effective date" 2013-04-13 House Journal Page 1216 Page 2, following line 11: Insert a new bill section to read: "* Sec. 2. AS 29.60.850(b), as amended by sec. 1 of this Act, is amended to read: (b) Each fiscal year, the legislature may appropriate to the community revenue sharing fund an amount equal to 20 percent of the money received by the state during the previous calendar year under AS 43.55.011(g) [AS 43.20.030(c)]. The amount may not exceed (1) $60,000,000; or (2) the amount that, when added to the fund balance on June 30 of the previous fiscal year, equals $180,000,000." Renumber the following bill sections accordingly. Page 4, following line 20: Insert a new bill section to read: "* Sec. 6. AS 43.55.011(e), as amended by sec. 5 of this Act, 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), (o), and (p) 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 5, following line 7: Insert a new bill section to read: "* Sec. 8. AS 43.55.011(g), as amended by sec. 7 of this Act, 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) of a BTU equivalent barrel of the taxable oil 2013-04-13 House Journal Page 1217 and gas is more than $30, the amount of tax for purposes 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: (1) 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 (2) 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 paragraph may not exceed 50 percent." Renumber the following bill sections accordingly. Page 5, following line 30: Insert a new bill section to read: "* Sec. 11. AS 43.55.011(o), as amended by sec. 10 of this Act, is amended to read: (o) Notwithstanding other provisions of this section, for a calendar year before 2022, the tax levied under (e) of this section for each 1,000 cubic feet of gas for gas produced from a lease or property outside the Cook Inlet sedimentary basin and used in the state [, OTHER THAN GAS SUBJECT TO (p) OF THIS SECTION,] may not exceed the amount of tax for each 1,000 cubic feet of gas that is determined under (j)(2) of this section." Renumber the following bill sections accordingly. Page 11, following line 17: Insert a new bill section to read: "* Sec. 14. AS 43.55.020(a), as amended by sec. 13 of this Act, is repealed and reenacted to read: (a) For a calendar year, a producer subject to tax under AS 43.55.011(e), (f), (g), (h), (i), or (p) shall pay the tax as follows: 2013-04-13 House Journal Page 1218 (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) or (p), 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) multiplied by 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 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 2013-04-13 House Journal Page 1219 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), (o), or (p), 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 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 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 (A) 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; (B) subject to AS 43.55.011(p) may not exceed four percent of the gross value at the point of production of the oil or gas; (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 2013-04-13 House Journal Page 1220 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 12, following line 5: Insert a new bill section to read: "* Sec. 16. AS 43.55.020(d), as amended by sec. 15 of this Act, is repealed and reenacted to read: (d) In making settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes due to the amount of the tax paid. If the total deductions of installment payments of estimated tax for a calendar year exceed the actual tax for that calendar year, the producer shall, before April 1 of the following year, refund the excess to the royalty owner. Unless otherwise agreed between the producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e), (f), and (g) on taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or right to which constitutes a landowner's royalty interest, is considered to be the gross value at the point of production of the taxable royalty oil and gas produced during the calendar year multiplied by a figure that is a quotient, in which (1) the numerator is the producer's total tax liability under AS 43.55.011(e), (f), and (g) for the calendar year of production; and (2) the denominator is the total gross value at the point of production of the oil and gas taxable under AS 43.55.011(e), (f), and (g) produced by the producer from all leases and properties in the state during the calendar year." 2013-04-13 House Journal Page 1221 Renumber the following bill sections accordingly. Page 14, following line 27: Insert a new bill section to read: "* Sec. 21. AS 43.55.023(a), as amended by sec. 20 of this Act, 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); and (B) submits to the Department of Natural Resources all data that would be required to be submitted under AS 43.55.025(f)(2) [; (3) A CREDIT FOR A QUALIFIED CAPITAL EXPENDITURE INCURRED TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED NORTH OF 68 DEGREES NORTH LATITUDE MAY BE TAKEN ONLY IF THE EXPENDITURE IS INCURRED BEFORE JANUARY 1, 2014]." Renumber the following bill sections accordingly. Page 15, following line 15: Insert a new bill section to read: "* Sec. 23. AS 43.55.023(b), as amended by sec. 22 of this Act, is amended to read: 2013-04-13 House Journal Page 1222 (b) A [BEFORE JANUARY 1, 2014, A] producer or explorer may elect to take a tax credit in the amount of 25 percent of a carried-forward annual loss.[FOR LEASE EXPENDITURES INCURRED ON AND AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1, 2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 45 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES INCURRED ON AND AFTER JANUARY 1, 2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 35 PERCENT OF A CARRIED- FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES INCURRED ON OR AFTER JANUARY 1, 2014, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED SOUTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A CARRIED- FORWARD ANNUAL LOSS.] A credit under this subsection may be applied against a tax levied by AS 43.55.011(e). For purposes of this subsection, a carried-forward annual loss is the amount of a producer's or explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a previous calendar year that was not deductible in calculating production tax values for that calendar year under AS 43.55.160." Renumber the following bill sections accordingly. Page 16, following line 9: Insert a new bill section to read: "* Sec. 25. AS 43.55.023(d), as amended by sec. 24 of this Act, is repealed and reenacted to read: (d) 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 2013-04-13 House Journal Page 1223 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 the following: 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; 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 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." Renumber the following bill sections accordingly. Page 16, following line 23: Insert a new bill section to read: "* Sec. 27. AS 43.55.023(g), as amended by sec. 26 of this Act, is amended to read: (g) The issuance of a transferable tax credit certificate under (d) or (p) of this section or former (m) 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 2013-04-13 House Journal Page 1224 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 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 17, following line 6: Insert a new bill section to read: "* Sec. 29. AS 43.55.023(n), as amended by sec. 28 of this Act, is amended to read: (n) For the purposes of (l) and (q) of this section, a well lease expenditure incurred in the state south of 68 degrees North latitude is a lease expenditure that is (1) directly related to an exploration well, a stratigraphic test well, a producing well, or an injection well other than a disposal well, located in the state south of 68 degrees North latitude, if the expenditure is a qualified capital expenditure and an intangible drilling and development cost authorized under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R. 1.612-4, regardless of the elections made under 26 U.S.C. 263(c); in this paragraph, an expenditure directly related to a well includes an expenditure for well sidetracking, well deepening, well completion or recompletion, or well workover, regardless of whether the well is or has been a producing well; or (2) an expense for seismic work conducted within the boundaries of a production or exploration unit." Renumber the following bill sections accordingly. Page 17, line 7: Delete "a new subsection" Insert "new subsections" Page 17, following line 9: Insert a new subsection to read: "(q) For a lease expenditure incurred in the state south of 68 2013-04-13 House Journal Page 1225 degrees North latitude after December 31, 2018, 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." Page 22, following line 14: Insert a new bill section to read: "* Sec. 37. AS 43.55.028(e), as amended by sec. 36 of this Act, 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 (p) or former AS 43.55.023(m) 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 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 22, following line 24: Insert a new bill section to read: "* Sec. 39. AS 43.55.028(g), as amended by sec. 38 of this Act, is amended to read: 2013-04-13 House Journal Page 1226 (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 and payments under AS 43.20.046 or 43.20.047 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(p) or former AS 43.55.023(m), or a claim for a refund or payment under AS 43.20.046 or 43.20.047." Renumber the following bill sections accordingly. Page 23, following line 6: Insert a new bill section to read: "* Sec. 41. AS 43.55.030(e), as amended by sec. 40 of this Act, 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, the following: (1) the [EXPLORER'S OR] 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." Renumber the following bill sections accordingly. Page 25, following line 16: Insert a new bill section to read: 2013-04-13 House Journal Page 1227 "* Sec. 43. AS 43.55.160(a), as amended by sec. 42 of this Act, is repealed and reenacted to read: (a) Except as provided in (b) of this section, for the purposes of (1) AS 43.55.011(e), the annual production tax value of the taxable oil, gas, or oil and gas subject to this paragraph produced during a calendar year is the gross value at the point of production of the oil, gas, or oil and gas taxable under AS 43.55.011(e), less the producer's lease expenditures under AS 43.55.165 for the calendar year applicable to the oil, gas, or oil and gas, as applicable, produced by the producer from leases or properties, as adjusted under AS 43.55.170; this paragraph applies to (A) oil and gas produced from leases or properties in the state that include land north of 68 degrees North latitude, other than gas produced before 2022 and used in the state; (B) oil and gas produced from leases or properties in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude; this subparagraph does not apply to (i) gas produced before 2022 and used in the state; or (ii) oil and gas subject to AS 43.55.011(p); (C) oil produced before 2022 from a lease or property in the Cook Inlet sedimentary basin; (D) gas produced before 2022 from a lease or property in the Cook Inlet sedimentary basin; (E) gas produced before 2022 from a lease or property in the state outside the Cook Inlet sedimentary basin and used in the state; (F) oil and gas subject to AS 43.55.011(p) produced from leases or properties in the state; (G) oil and gas produced from a lease or property no part of which is north of 68 degrees North latitude, other than oil or gas described in (B), (C), (D), (E), or (F) of this paragraph; (2) AS 43.55.011(g), the monthly production tax value of the taxable (A) oil and gas produced during a month from leases or properties in the state that include land north of 68 degrees 2013-04-13 House Journal Page 1228 North latitude is the gross value at the point of production of the oil and gas taxable under AS 43.55.011(e) and produced by the producer from those leases or properties, less 1/12 of the producer's lease expenditures under AS 43.55.165 for the calendar year applicable to the oil and gas produced by the producer from those leases or properties, as adjusted under AS 43.55.170; this subparagraph does not apply to gas subject to AS 43.55.011(o); (B) oil and gas produced during a month from leases or properties in the state outside the Cook Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, is the gross value at the point of production of the oil and gas taxable under AS 43.55.011(e) and produced by the producer from those leases or properties, less 1/12 of the producer's lease expenditures under AS 43.55.165 for the calendar year applicable to the oil and gas produced by the producer from those leases or properties, as adjusted under AS 43.55.170; this subparagraph does not apply to gas subject to AS 43.55.011(o); (C) oil produced during a month from a lease or property in the Cook Inlet sedimentary basin is the gross value at the point of production of the oil taxable under AS 43.55.011(e) and produced by the producer from that lease or property, less 1/12 of the producer's lease expenditures under AS 43.55.165 for the calendar year applicable to the oil produced by the producer from that lease or property, as adjusted under AS 43.55.170; (D) gas produced during a month from a lease or property in the Cook Inlet sedimentary basin is the gross value at the point of production of the gas taxable under AS 43.55.011(e) and produced by the producer from that lease or property, less 1/12 of the producer's lease expenditures under AS 43.55.165 for the calendar year applicable to the gas produced by the producer from that lease or property, as adjusted under AS 43.55.170; (E) gas produced during a month from a lease or property outside the Cook Inlet sedimentary basin and used in the state is the gross value at the point of production of that gas taxable under AS 43.55.011(e) and produced by the producer from that lease or property, less 1/12 of the 2013-04-13 House Journal Page 1229 producer's lease expenditures under AS 43.55.165 for the calendar year applicable to that gas produced by the producer from that lease or property, as adjusted under AS 43.55.170." Renumber the following bill sections accordingly. Page 26, following line 16: Insert a new subsection to read: "(h) Notwithstanding any contrary provision of AS 43.55.150, for purposes of calculating a monthly production tax value under (a)(2) of this section, the gross value at the point of production of the oil and gas is calculated under regulations adopted by the department that provide for using an appropriate monthly share of the producer's costs of transportation for the calendar year." Page 29, following line 23: Insert a new bill section to read: "* Sec. 48. AS 43.55.020(l), 43.55.024(i), 43.55.024(j), 43.55.160(f), and 43.55.160(g) are repealed." Page 29, lines 29 - 30: Delete "Section 7 of this Act and AS 43.55.160(a)(1)(E), as amended by sec. 28" Insert "Section 10 of this Act, AS 43.55.160(a)(1)(E), as amended by sec. 42 of this Act, and AS 43.55.160(f) and (g), as enacted by sec. 44" Page 29, line 31: Delete "sec. 14" Insert "sec. 20" Delete "secs. 16 - 19" Insert "secs. 24, 26, and 28 of this Act and AS 43.55.023(p) in sec. 30" Page 30, following line 1: Insert a new subsection to read: "(c) AS 43.55.160(h), enacted by sec. 44 of this Act, applies to the transportation of oil and gas produced on and after the effective date of sec. 8 of this Act." 2013-04-13 House Journal Page 1230 Page 30, line 11: Delete "Sec. 31" Insert "Sec. 46" Page 30, line 15: Delete "Sections 7, 16 - 19, 25, and 32" Insert "Sections 10, 24, 26, 28, 30, 36, and 47" Page 30, line 16: Delete "sec. 14" Insert "sec. 20" Delete "sec. 28" Insert "sec. 42" Page 30, following line 17: Insert new bill sections to read: "* Sec. 55. The uncodified law of the State of Alaska is amended by adding a new section to read: CONDITIONAL EFFECT. Sections 2, 6, 8, 11, 14, 16, 21, 23, 25, 27, 29, 32, 39, 41, 43, and 48 of this Act, AS 43.55.023(q) in sec. 30 of this Act, and AS 43.55.160(h) in sec. 44 of this Act take effect only if the volume of oil production for the calendar year 2018 does not exceed the volume of oil produced for the 2013 calendar year. The commissioner of natural resources shall notify the lieutenant governor and the revisor of statutes before January 1, 2019, or as soon as practicable thereafter, if the volume of oil production for the calendar year 2018 is greater than the volume of oil produced during the 2013 calendar year. * Sec. 56. If secs. 2, 6, 8, 11, 14, 16, 21, 23, 25, 27, 29, 32, 39, 41, 43, and 48 of this Act, AS 43.55.023(p) in sec. 30 of this Act, and AS 43.55.160(h) in sec. 44 of this Act take effect under sec. 55 of this Act, they take effect January 1, 2019." Representative Kawasaki moved and asked unanimous consent that Amendment No. 11 be adopted. Representative Hawker objected. 2013-04-13 House Journal Page 1231 The question being: "Shall Amendment No. 11 be adopted?" The roll was taken with the following result: HCS CSSB 21(FIN) am H Second Reading Amendment No. 11 YEAS: 9 NAYS: 29 EXCUSED: 2 ABSENT: 0 Yeas: Drummond, Gara, Gruenberg, Josephson, Kawasaki, Kerttula, Kreiss-Tomkins, Tarr, Tuck Nays: Austerman, Chenault, Costello, Edgmon, Feige, Foster, Gattis, Hawker, Herron, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, LeDoux, Lynn, Millett, Munoz, Neuman, Olson, Pruitt, Reinbold, Saddler, Seaton, Stoltze, Thompson, P.Wilson, T.Wilson Excused: Guttenberg, Nageak And so, Amendment No. 11 was not adopted. Amendment No. 12 was offered by Representatives Kawasaki, Kerttula, Tuck, Gara, Tarr, Gruenberg, Josephson, Drummond, and Kreiss-Tomkins: Page 18, lines 4 - 28: Delete all material and insert: "(1) if the average gross value at the point of production for the month is less than $80 a barrel, (A) $8 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month exceeds the volume of taxable oil produced in the corresponding month in 2012; or (B) $6 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month does not exceed the volume of taxable oil produced in the corresponding month in 2012; (2) if the average gross value at the point of production for the month is greater than or equal to $80 a barrel, but less than $90 a barrel, (A) $7 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month exceeds 2013-04-13 House Journal Page 1232 the volume of taxable oil produced in the corresponding month in 2012; or (B) $5 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month does not exceed the volume of taxable oil produced in the corresponding month in 2012; (3) if the average gross value at the point of production for the month is greater than or equal to $90 a barrel, but less than $100 a barrel, (A) $6 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month exceeds the volume of taxable oil produced in the corresponding month in 2012; or (B) $4 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month does not exceed the volume of taxable oil produced in the corresponding month in 2012; (4) if the average gross value at the point of production for the month is greater than or equal to $100 a barrel, but less than $110 a barrel, (A) $5 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month exceeds the volume of taxable oil produced in the corresponding month in 2012; or (B) $3 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month does not exceed the volume of taxable oil produced in the corresponding month in 2012; (5) if the average gross value at the point of production for the month is greater than or equal to $110 a barrel, but less than $120 a barrel, (A) $4 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month exceeds the volume of taxable oil produced in the corresponding month in 2012; or (B) $2 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month does not exceed the volume of taxable oil produced in the corresponding month in 2012; (6) if the average gross value at the point of production 2013-04-13 House Journal Page 1233 for the month is greater than or equal to $120 a barrel, but less than $130 a barrel, (A) $3 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month exceeds the volume of taxable oil produced in the corresponding month in 2012; or (B) $1 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month does not exceed the volume of taxable oil produced in the corresponding month in 2012; (7) if the average gross value at the point of production for the month is greater than or equal to $130 a barrel, but less than $140 a barrel, (A) $2 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month exceeds the volume of taxable oil produced in the corresponding month in 2012; or (B) zero if the volume of taxable oil produced by the producer for the month does not exceed the volume of taxable oil produced in the corresponding month in 2012; (8) if the average gross value at the point of production for the month is greater than or equal to $140 a barrel, but less than $150 a barrel, (A) $1 for each barrel of taxable oil if the volume of taxable oil produced by the producer for the month exceeds the volume of taxable oil produced in the corresponding month in 2012; or (B) zero if the volume of taxable oil produced by the producer for the month does not exceed the volume of taxable oil produced in the corresponding month in 2012; (9) zero if the average gross value at the point of production for the month is greater than or equal to $150 a barrel." Representative Kawasaki moved and asked unanimous consent that Amendment No. 12 be adopted. Representative Feige objected. 2013-04-13 House Journal Page 1234 The question being: "Shall Amendment No. 12 be adopted?" The roll was taken with the following result: HCS CSSB 21(FIN) am H Second Reading Amendment No. 12 YEAS: 9 NAYS: 29 EXCUSED: 2 ABSENT: 0 Yeas: Drummond, Gara, Gruenberg, Josephson, Kawasaki, Kerttula, Kreiss-Tomkins, Tarr, Tuck Nays: Austerman, Chenault, Costello, Edgmon, Feige, Foster, Gattis, Hawker, Herron, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, LeDoux, Lynn, Millett, Munoz, Neuman, Olson, Pruitt, Reinbold, Saddler, Seaton, Stoltze, Thompson, P.Wilson, T.Wilson Excused: Guttenberg, Nageak And so, Amendment No. 12 was not adopted. HCS CSSB 21(FIN) am H was automatically in third reading. Representative Tarr moved and asked unanimous consent that HCS CSSB 21(FIN) am H be returned to second reading for the specific purpose of considering Amendment No. 13. There being no objection, it was so ordered. Amendment No. 13 was offered by Representative Tarr: Page 17, line 26, through page 18, line 28: Delete all material and insert: "(j) For each month of the calendar year for which a producer's average monthly gross value at the point of production of a barrel of taxable oil is less than $150, a producer may apply against the producer's tax liability for the calendar year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for each barrel of taxable oil under AS 43.55.011(e) that does not meet any of the criteria in AS 43.55.160(f) and that is produced during a calendar year after December 31, 2013, from leases or properties north of 68 degrees North latitude. A tax credit under this subsection may not reduce a producer's tax liability for a calendar year under AS 43.55.011(e) below zero. A 2013-04-13 House Journal Page 1235 credit under this subsection may not exceed $8 for a barrel of taxable oil. The amount of the tax credit for a barrel of taxable oil subject to this subsection is 10 percent of the difference between $150 and the average monthly gross value at the point of production of a barrel of taxable oil of the producer." Representative Tarr moved and asked unanimous consent that Amendment No. 13 be adopted. Representative Feige objected. The question being: "Shall Amendment No. 13 be adopted?" The roll was taken with the following result: HCS CSSB 21(FIN) am H Second Reading Amendment No. 13 YEAS: 10 NAYS: 28 EXCUSED: 2 ABSENT: 0 Yeas: Drummond, Gruenberg, Herron, Josephson, Kawasaki, Kerttula, Kreiss-Tomkins, Munoz, Tarr, Tuck Nays: Austerman, Chenault, Costello, Edgmon, Feige, Foster, Gara, Gattis, Hawker, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, LeDoux, Lynn, Millett, Neuman, Olson, Pruitt, Reinbold, Saddler, Seaton, Stoltze, Thompson, P.Wilson, T.Wilson Excused: Guttenberg, Nageak And so, Amendment No. 13 was not adopted. HCS CSSB 21(FIN) am H was automatically in third reading. **The presence of Representative Nageak, who was excused (page 1155), was noted. The question being: "Shall HCS CSSB 21(FIN) am H pass the House?" The roll was taken with the following result: 2013-04-13 House Journal Page 1236 HCS CSSB 21(FIN) am H Third Reading Final Passage YEAS: 24 NAYS: 15 EXCUSED: 1 ABSENT: 0 Yeas: Chenault, Costello, Feige, Gattis, Hawker, Higgins, Holmes, Hughes, Isaacson, Johnson, Keller, LeDoux, Lynn, Millett, Nageak, Neuman, Olson, Pruitt, Reinbold, Saddler, Stoltze, Thompson, P.Wilson, T.Wilson Nays: Austerman, Drummond, Edgmon, Foster, Gara, Gruenberg, Herron, Josephson, Kawasaki, Kerttula, Kreiss-Tomkins, Munoz, Seaton, Tarr, Tuck Excused: Guttenberg And so, HCS CSSB 21(FIN) am H passed the House. Representative Johnson later gave notice of reconsideration of the vote on HCS CSSB 21(FIN) am H, and reconsideration was taken up then.