Legislature(2013 - 2014)

2013-03-20 Senate Journal

Full Journal pdf

2013-03-20                     Senate Journal                      Page 0645
SB 21                                                                                                                         
CS FOR SENATE BILL NO. 21(FIN) was before the Senate in                                                                         
second reading.                                                                                                                 
                                                                                                                                
Senator Micciche moved and asked unanimous consent to withdraw                                                                  
Amendment No. 1. Without objection, it was so ordered.                                                                          
                                                                                                                                
Senators Micciche, McGuire, Coghill, Bishop, Meyer, Giessel,                                                                    
Fairclough, Huggins, Dyson, Dunleavy offered New Amendment                                                                      
No. 1:                                                                                                                          
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0646
Page 5, lines 4 - 12:                                                                                                           
     Delete "the annual production tax value of the taxable oil and                                                         
gas as calculated under AS 43.55.160(a) produced during a                                                                   
calendar year [THE SUM OF]                                                                                                  
              (1)  before January 1, 2017, [THE ANNUAL                                                                      
     PRODUCTION TAX VALUE OF THE TAXABLE OIL AND                                                                                
     GAS AS CALCULATED UNDER AS 43.55.160(a)(1)]                                                                                
     multiplied by 35 [25] percent; and                                                                                     
              (2)  after December 31, 2016, multiplied by 33 percent                                                        
     [THE SUM, OVER ALL MONTHS OF THE CALENDAR                                                                                  
     YEAR, OF THE TAX AMOUNTS DETERMINED UNDER (g)                                                                              
     OF THIS SECTION]."                                                                                                         
                                                                                                                                
     Insert "[THE SUM OF                                                                                                        
              (1)]  the annual production tax value of the taxable oil and                                                      
     gas as calculated under AS 43.55.160(a) [AS 43.55.160(a)(1)]                                                           
     multiplied by 35 [25] percent [; AND                                                                                   
              (2)  THE SUM, OVER ALL MONTHS OF THE                                                                              
     CALENDAR YEAR, OF THE TAX AMOUNTS DETERMINED                                                                               
     UNDER (g) OF THIS SECTION]."                                                                                               
                                                                                                                                
Page 9, line 5:                                                                                                                 
     Delete "the applicable tax rate in AS 43.55.011(e)"                                                                    
     Insert "35 percent"                                                                                                    
                                                                                                                                
Page 9, line 21:                                                                                                                
     Delete "the applicable tax rate in AS 43.55.011(e)"                                                                    
     Insert "35 percent"                                                                                                    
                                                                                                                                
Page 10, line 5:                                                                                                                
     Delete "the applicable tax rate in AS 43.55.011(e)"                                                                    
     Insert "35 percent"                                                                                                    
                                                                                                                                
Page 10, line 16:                                                                                                               
     Delete "the applicable tax rate in AS 43.55.011(e)"                                                                    
     Insert "35 percent"                                                                                                    
                                                                                                                                
Page 13, line 23, through page 14, line 3:                                                                                      
     Delete all material.                                                                                                       
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0647
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 14, line 29:                                                                                                               
     Delete "sec. 18"                                                                                                           
     Insert "sec. 17"                                                                                                           
                                                                                                                                
Page 26, line 4:                                                                                                                
     Delete "28 - 30"                                                                                                           
     Insert "27 - 29"                                                                                                           
                                                                                                                                
Page 26, line 6:                                                                                                                
     Delete "27"                                                                                                                
     Insert "26"                                                                                                                
                                                                                                                                
Page 26, line 8:                                                                                                                
     Delete "18 - 21"                                                                                                           
     Insert "17 - 20"                                                                                                           
                                                                                                                                
Page 26, line 10:                                                                                                               
     Delete "19, and 24"                                                                                                        
     Insert "18, and 23"                                                                                                        
                                                                                                                                
Page 26, line 12:                                                                                                               
     Delete all material.                                                                                                       
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 33"                                                                                                           
                                                                                                                                
Page 26, line 30:                                                                                                               
     Delete "18, 20, 21, 24, 27, and 35"                                                                                        
     Insert "17, 19, 20, 23, 26, and 34"                                                                                        
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "19, 22, 23, 28 - 33, and 36"                                                                                       
     Insert "18, 21, 22, 27 - 32, and 35"                                                                                       
                                                                                                                                
Page 27, line 3:                                                                                                                
     Delete all material.                                                                                                       
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0648
Renumber the following bill section accordingly.                                                                                
                                                                                                                                
Page 27, line 4:                                                                                                                
     Delete "secs. 42 and 43"                                                                                                   
     Insert "sec. 41"                                                                                                           
                                                                                                                                
Senator Micciche moved for the adoption of New Amendment No. 1.                                                                 
Senator French objected.                                                                                                        
                                                                                                                                
The question being: "Shall New Amendment No. 1 be adopted?" The                                                                 
roll was taken with the following result:                                                                                       
                                                                                                                                
CSSB 21(FIN)                                                                                                                    
Second Reading                                                                                                                  
New Amendment No. 1                                                                                                             
                                                                                                                                
YEAS:  11   NAYS:  9   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Bishop, Coghill, Dunleavy, Dyson, Fairclough, Giessel,                                                                   
Huggins, Kelly, McGuire, Meyer, Micciche                                                                                        
                                                                                                                                
Nays:  Egan, Ellis, French, Gardner, Hoffman, Olson, Stedman,                                                                   
Stevens, Wielechowski                                                                                                           
                                                                                                                                
and so, New Amendment No. 1 was adopted.                                                                                        
                                                                                                                                
Senators French, Ellis, Gardner, Wielechowski offered Amendment                                                                 
No. 2:                                                                                                                          
                                                                                                                                
Page 1, lines 7 - 8:                                                                                                            
     Delete "relating to nontransferable tax credits based on                                                                 
production;"                                                                                                                  
     Insert "relating to adjustments to production tax value;"                                                                
                                                                                                                                
Page 4, line 30, through page 5, line 12:                                                                                       
     Delete all material and insert:                                                                                            
"* Sec. 9. 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), (o), and                                                       

2013-03-20                     Senate Journal                      Page 0649
     (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), as adjusted by                                                             
     AS 43.55.162, 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.                                                                          
   * Sec. 10. AS 43.55.011(g) is amended 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 [PER] 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 production tax value of the taxable oil and gas produced                                                           
     during the month, as adjusted by AS 43.55.162, by the tax rate                                                         
     calculated as follows:                                                                                                     
              (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                                                                                              
              (2)  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 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 30 [50] percent."                                                                                           
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 8, line 21, through page 12, line 8:                                                                                       
     Delete all material and insert:                                                                                            
"* Sec. 13. AS 43.55.020(a), as amended by sec. 12 of this Act, is                                                            
amended to read:                                                                                                                
          (a)  For a calendar year, a producer subject to tax under                                                             
     AS 43.55.011 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,                                                         

2013-03-20                     Senate Journal                      Page 0650
     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 not subject to AS 43.55.011(o) or                                                       
          (p)produced from leases or properties in the state outside the                                                        
          Cook Inlet sedimentary basin, 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 oil and gas under                                                           
              AS 43.55.160 and 1/12 of the adjustment to production                                                         
              tax value for the calendar year under AS 43.55.162                                                            
              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 the 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 the oil and gas 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                                                          

2013-03-20                     Senate Journal                      Page 0651
              payment is calculated;                                                                                            
                   (C)  for oil or gas subject to AS 43.55.011(j), (k), or                                                      
          (o), for each lease or property, 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 and                                                          
              1/12 of the adjustment to production tax value for the                                                        
              calendar year under AS 43.55.162 for the oil or gas, as                                                   
              applicable [RESPECTIVELY], produced from the lease                                                            
              or property from the gross value at the point of                                                                  
              production of the oil or gas, as applicable                                                                   
              [RESPECTIVELY], produced from the lease or property                                                               
              during the month for which the installment payment is                                                             
              calculated;                                                                                                       
                   (D)  for oil and gas subject to AS 43.55.011(p), the                                                         
          lesser of                                                                                                             
                        (i)  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 oil and gas under                                                           
              AS 43.55.160 and 1/12 of the adjustment to production                                                         
              tax value for the calendar year under AS 43.55.162                                                            
              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,                                                            
              but not less than zero; or                                                                                        
                        (ii)  four percent of the gross value at the point of                                                   
              production of the oil and gas produced from the leases or                                                         
              properties during the month, but not less than zero;                                                              
                   (2)  an amount calculated under (1)(C) of this                                                               
          subsection for oil or gas 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                                                                    

2013-03-20                     Senate Journal                      Page 0652
          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, 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 13, line 11, through page 14, line 3:                                                                                      
     Delete all material.                                                                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 14, line 29:                                                                                                               
     Delete "sec. 18"                                                                                                           
     Insert "sec. 16"                                                                                                           
                                                                                                                                
Page 16, lines 14 - 28:                                                                                                         
     Delete all material.                                                                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0653
Page 20, line 14, through page 22, line 23:                                                                                     
     Delete all material and insert:                                                                                            
"* Sec. 24. AS 43.55.160(a), as amended by sec. 23 of this Act, is                                                            
amended to read:                                                                                                                
          (a)  Except as provided in (b) of this section, and subject to                                                    
     adjustment under AS 43.55.162, 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 [GAS]                                                                                               
                        (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 each lease or                                                             
          property in the Cook Inlet sedimentary basin;                                                                         
                   (D)  gas produced before 2022 from each lease or                                                             
          property in the Cook Inlet sedimentary basin;                                                                         
                   (E)  gas produced before 2022 from each lease or                                                             
          property in the state outside the Cook Inlet sedimentary basin                                                        
          and used in the state, other than gas subject to                                                                      
          AS 43.55.011(p);                                                                                                      
                   (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 leases or properties in                                                       
          the state 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;                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0654
              (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                                                      
          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;                                                                                          
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0655
                   (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                                                                
          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.                                                          
   * Sec. 25. AS 43.55 is amended by adding a new section to read:                                                            
          Sec. 43.55.162. Adjustments to production tax value. (a)                                                            
     The annual production tax value of oil produced from a lease or                                                            
     property north of 68 degrees North latitude by the producer is                                                             
     reduced, during the first seven consecutive years after the start of                                                       
     commercial production by 20 percent of the gross value at the                                                              
     point of production of oil produced during the calendar year. This                                                         
     subsection does not apply to a lease or property that                                                                      
              (1)  was in commercial production before January 1,                                                               
     2007;                                                                                                                      
              (2)  is located within a unit area that has never had                                                             
     commercial production; or                                                                                                  
              (3)  is located within a unit for more than 20 years before                                                       
     the first commercial production on the lease or property.                                                                  
          (b)  The annual production tax value of oil or gas produced by                                                        
     a producer is reduced during the first five consecutive years after                                                        
     the start of commercial production by 10 percent if the oil or gas is                                                      
     produced from a participating area established after December 31,                                                          
     2012, that is within a unit formed under AS 38.05.180(p) before                                                            
     January 1, 2003, if the participating area does not contain a                                                              
     reservoir that had previously been in a participating area                                                                 
     established before January 1, 2012. This subsection does not apply                                                         
     to production from a lease or property located within a unit for                                                           
     more than 20 years before the first commercial production on the                                                           
     lease or property.                                                                                                         
          (c)  The annual production tax value of heavy oil produced by                                                         
     a producer is reduced by 10 percent of the gross value at the point                                                        
     of production of heavy oil produced, for the calendar year, from a                                                         
     lease or property that is located within a unit area existing on                                                           
     January 1, 2014.                                                                                                           
          (d)  For a calendar year after 2012, the annual production tax                                                        
     value of oil produced by a producer that produced oil in 2012 is                                                           

2013-03-20                     Senate Journal                      Page 0656
     reduced by 10 percent of the gross value at the point of production                                                        
     of the volume of oil produced during the calendar year in excess                                                           
     of the total volume produced by the producer in 2012. The volume                                                           
     of oil produced by a producer in 2012 is the average daily                                                                 
     statewide production of the producer, excluding from the                                                                   
     calculation the days on which production is significantly reduced,                                                         
     multiplied by the number of days in the calendar year. For the                                                             
     purposes of this subsection, production is significantly reduced                                                           
     when the production volume of oil for the day is less than one-half                                                        
     of the quotient of the total volume of oil production that is                                                              
     produced by the producer for the year and the number of days in                                                            
     the calendar year. A producer that increases its volume of                                                                 
     production through the purchase, merger, or other acquisition of                                                           
     another producer is the sum of the producer's total target volume                                                          
     and the total target volume for the producer that is purchased,                                                            
     merged with, or otherwise acquired; however, if the producer that                                                          
     is purchased, merged with, or otherwise acquired did not have a                                                            
     target volume determined under this section, the volume of the                                                             
     increased production that is attributable to the purchase, merger,                                                         
     or other acquisition may not be considered for the purpose of                                                              
     determining whether the producer that acquired the additional                                                              
     production has increased the volume of production above its target                                                         
     volume.                                                                                                                    
          (e)  A reduction in production tax value provided by this                                                             
     section may not be combined with any other reduction in                                                                    
     production tax value provided by this section in the same year. Oil                                                        
     or gas from a lease or property that produces oil or gas that results                                                      
     in a production tax reduction under (a) of this section is ineligible                                                      
     for a production tax reduction under (b) and (c) of this section and                                                       
     may not be used in the calculation of production volume under (d)                                                          
     of this section.                                                                                                           
          (f)  A reduction in production tax value provided by this                                                             
     section may not reduce the production tax value of a producer                                                              
     below zero.                                                                                                                
          (g)  The rate of tax under AS 43.55.011(g) shall be                                                                   
     determined before the application of the adjustment provided by                                                            
     this section.                                                                                                              
          (h)  In this section,                                                                                                 
              (1)  "commercial production" means the production of oil                                                          
     for the purpose of sale or other beneficial use, except when the                                                           

2013-03-20                     Senate Journal                      Page 0657
     sale or beneficial use is incidental to the testing of an unproved                                                         
     well or unproved completion interval;                                                                                      
              (2)  "participating area" means that part of an oil and gas                                                       
     lease unit to which production is allocated in the manner described                                                        
     in a unit agreement."                                                                                                      
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 25, line 30:                                                                                                               
         Delete "AS 43.55.011(g), 43.55.023(i), and 43.55.160(c) are"                                                          
     Insert "AS 43.55.023(i) is"                                                                                                
                                                                                                                                
Page 26, line 4:                                                                                                                
     Delete "Sections 9, 12, 13, and 28 - 30"                                                                                   
     Insert "Sections 9, 10, 13, 24, and 25"                                                                                    
                                                                                                                                
Page 26, line 6:                                                                                                                
     Delete "Sections 10 and 27"                                                                                                
     Insert "Sections 11 and 23"                                                                                                
                                                                                                                                
Page 26, line 8:                                                                                                                
     Delete "Sections 15 and 18 - 21"                                                                                           
     Insert "Sections 14 - 19"                                                                                                  
                                                                                                                                
Page 26, line 10:                                                                                                               
     Delete "Sections 16, 19, and 24"                                                                                           
     Insert "Sections 17 and 20"                                                                                                
                                                                                                                                
Page 26, line 12:                                                                                                               
     Delete all material.                                                                                                       
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 29"                                                                                                           
                                                                                                                                
Page 26, line 30:                                                                                                               
     Delete "Sections 10, 18, 20, 21, 24, 27, and 35"                                                                           
     Insert "Sections 11, 16, 18 - 20, 23, and 30"                                                                              
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0658
Page 27, line 1:                                                                                                                
     Delete "Sections 1 - 6, 8, 9, 12 - 14, 16, 19, 22, 23, 28 - 33, and                                                        
36"                                                                                                                             
     Insert "Sections 1 - 6, 8, 9, 10, 13, 14, 17, 24 - 28, and 31"                                                             
                                                                                                                                
Page 27, line 3:                                                                                                                
     Delete all material.                                                                                                       
                                                                                                                                
Renumber the following bill section accordingly.                                                                                
                                                                                                                                
Page 27, line 4:                                                                                                                
     Delete "secs. 42 and 43"                                                                                                   
     Insert "sec. 37"                                                                                                           
                                                                                                                                
Senator French moved for the adoption of Amendment No. 2. Senator                                                               
Coghill objected.                                                                                                               
                                                                                                                                
Senator French moved for the adoption of the following amendment to                                                             
Amendment No. 2:                                                                                                                
                                                                                                                                
Under Page 20, line 14, through page 22, line 23:                                                                               
      Delete all material in Sec. 25 and insert necessary conforming                                                            
language.                                                                                                                       
                                                                                                                                
Senator Coghill objected, then withdrew his objection. There being no                                                           
further objection, Amendment No. 2 was amended.                                                                                 
                                                                                                                                
The question being: "Shall Amendment No. 2 as amended be                                                                        
adopted?" The roll was taken with the following result:                                                                         
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 2 as amended                                                                                                      
                                                                                                                                
YEAS:  4   NAYS:  16   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Wielechowski                                                                                     
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson,                                                                       
Stedman, Stevens                                                                                                                
                                                                                                                                
and so, Amendment No. 2 as amended failed.                                                                                      
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0659
Senators French, Ellis, Gardner, Wielechowski offered Amendment                                                                 
No. 3:                                                                                                                          
                                                                                                                                
Page 1, line 4:                                                                                                                 
     Delete "the oil and gas production tax rate;"                                                                            
     Insert "oil and gas production tax rates; relating to application                                                        
of the oil and gas production tax to legacy fields and fields that are                                                        
not legacy fields;"                                                                                                           
                                                                                                                                
Page 2, following line 28:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 5. 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 AS 43.55.430. 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."                                                                                               
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 4, following line 29:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 10. AS 43.55 is amended by adding a new section to read:                                                              
          Sec. 43.55.005. Application of tax. (a) The following                                                               
     provisions in this chapter apply to the oil and gas production tax                                                         
     on oil and gas produced in the state from a field that is a legacy                                                         
     field:                                                                                                                     
              (1)  AS 43.55.011(i), (j), (k), (m), (o), and (p);                                                               
              (2)  AS 43.55.017;                                                                                                
              (3)  AS 43.55.019;                                                                                                
              (4)  AS 43.55.024(a) - (h);                                                                                       
              (5)  AS 43.55.025 - 43.55.150;                                                                                    
              (6)  AS 43.55.165;                                                                                                
              (7)  AS 43.55.170;                                                                                                
              (8)  AS 43.55.201 - 43.55.310;                                                                                    
              (9)  AS 43.55.410 - 43.55.440; and                                                                                
              (10)  AS 43.55.890 - 43.55.900.                                                                                   

2013-03-20                     Senate Journal                      Page 0660
          (b)  The following provisions in this chapter apply to the oil                                                        
     and gas production tax on oil and gas produced in the state from a                                                         
     field that is not a legacy field:                                                                                          
              (1)  AS 43.55.011 - 43.55.310; and                                                                                
              (2)  AS 43.55.890 - 43.55.900."                                                                                   
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 5, following line 12:                                                                                                      
     Insert new bill sections to read:                                                                                          
   * Sec. 12. AS 43.55.011(j) is amended to read:                                                                             
          (j)  For a calendar year before 2022, the tax levied by (e) of                                                        
     this section and AS 43.55.410 for gas produced from a lease or                                                         
     property in the Cook Inlet sedimentary basin may not exceed                                                                
              (1)  for a lease or property that first commenced                                                                 
     commercial production of gas before April 1, 2006, the product                                                             
     obtained by multiplying (A) the amount of taxable gas produced                                                             
     during the calendar year from the lease or property, times (B) the                                                         
     average rate of tax that was imposed under this chapter for taxable                                                        
     gas produced from the lease or property for the 12-month period                                                            
     ending on March 31, 2006, times (C) the quotient obtained by                                                               
     dividing the total gross value at the point of production of the                                                           
     taxable gas produced from the lease or property during the 12-                                                             
     month period ending on March 31, 2006, by the total amount of                                                              
     that gas;                                                                                                                  
              (2)  for a lease or property that first commences                                                                 
     commercial production of gas after March 31, 2006, the product                                                             
     obtained by multiplying (A) the amount of taxable gas produced                                                             
     during the calendar year from the lease or property, times (B) the                                                         
     average rate of tax that was imposed under this chapter for taxable                                                        
     gas produced from all leases or properties in the Cook Inlet                                                               
     sedimentary basin for the 12-month period ending on March 31,                                                              
     2006, times (C) the average prevailing value for gas delivered in                                                          
     the Cook Inlet area for the 12-month period ending March 31,                                                               
         2006, as determined by the department under AS 43.55.020(f).                                                          
   * Sec. 13. AS 43.55.011(k) is amended to read:                                                                             
          (k)  For a calendar year before 2022, the tax levied by (e) of                                                        
     this section and AS 43.55.410 for oil produced from a lease or                                                         
     property in the Cook Inlet sedimentary basin may not exceed                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0661
              (1)  for a lease or property that first commenced                                                                 
     commercial production of oil before April 1, 2006, the product                                                             
     obtained by multiplying (A) the amount of taxable oil produced                                                             
     during the calendar year from the lease or property, times (B) the                                                         
     average rate of tax that was imposed under this chapter for taxable                                                        
     oil produced from the lease or property for the 12-month period                                                            
     ending on March 31, 2006, times (C) the quotient obtained by                                                               
     dividing the total gross value at the point of production of the                                                           
     taxable oil produced from the lease or property during the 12-                                                             
     month period ending on March 31, 2006, by the total amount of                                                              
     that oil;                                                                                                                  
              (2)  for a lease or property that first commences                                                                 
     commercial production of oil after March 31, 2006, the product                                                             
     obtained by multiplying (A) the amount of taxable oil produced                                                             
     during the calendar year from the lease or property, times (B) the                                                         
     average rate of tax that was imposed under this chapter for taxable                                                        
     oil produced from all leases or properties in the Cook Inlet                                                               
     sedimentary basin for the 12-month period ending on March 31,                                                              
     2006, times (C) the average prevailing value for oil produced and                                                          
     delivered in the Cook Inlet area for the 12-month period ending on                                                         
     March 31, 2006, as determined by the department under                                                                      
     AS 43.55.020(f)."                                                                                                          
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 5, line 15, following "section":                                                                                           
     Insert "and AS 43.55.410"                                                                                              
                                                                                                                                
Page 5, following line 18:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 15. AS 43.55.011(p) is amended to read:                                                                               
          (p)  For the seven years immediately following the                                                                    
     commencement of commercial production of oil or gas produced                                                               
     from leases or properties in the state that are outside the Cook                                                           
     Inlet sedimentary basin and that do not include land located north                                                         
     of 68 degrees North latitude, where that commercial production                                                             
     began after December 31, 2012, and before January 1, 2022, the                                                             
     levy of tax under (e) of this section and AS 43.55.410 for oil and                                                     
     gas may not exceed four percent of the gross value at the point of                                                         
     production."                                                                                                               
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0662
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 8, line 21:                                                                                                                
     Delete "sec. 11"                                                                                                           
     Insert "sec. 16"                                                                                                           
                                                                                                                                
Page 12, following line 8:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 19. AS 43.55.020(e) is amended to read:                                                                               
          (e)  Gas flared, released, or allowed to escape in excess of the                                                      
     amount authorized by the Alaska Oil and Gas Conservation                                                                   
     Commission is considered, for the purposes of AS 43.55.011 -                                                               
     43.55.180 and 43.55.410 - 43.55.440, as gas produced from a                                                            
     lease or property. Oil or gas used in the operation of a lease or                                                          
     property in the state in drilling for or producing oil or gas, or for                                                      
     repressuring, except to the extent determined by the Alaska Oil                                                            
     and Gas Conservation Commission to be waste, is not considered,                                                            
     for the purposes of AS 43.55.011 - 43.55.180 and 43.55.410 -                                                           
     43.55.440, as oil or gas produced from a lease or property."                                                           
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 13, line 23:                                                                                                               
     Delete "sec. 16"                                                                                                           
     Insert "sec. 22                                                                                                            
                                                                                                                                
Page 14, line 29:                                                                                                               
     Delete "sec. 18"                                                                                                           
     Insert "sec. 24                                                                                                            
                                                                                                                                
Page 16, following line 13:                                                                                                     
     Insert new bill sections to read:                                                                                          
"* Sec. 28. AS 43.55.024(a) is amended to read:                                                                               
          (a)  For a calendar year for which a producer's tax liability                                                         
     under AS 43.55.011(e) and 43.55.410 on oil and gas produced                                                            
     from leases or properties outside the Cook Inlet sedimentary                                                               
     basin, no part of which is north of 68 degrees North latitude,                                                             
     exceeds zero before application of any credits under this chapter, a                                                       
     producer that is qualified under (e) of this section may apply a tax                                                       
     credit against that liability of not more than $6,000,000.                                                                 

2013-03-20                     Senate Journal                      Page 0663
   * Sec. 29. AS 43.55.024(c) is amended to read:                                                                             
          (c)  For a calendar year for which a producer's tax liability                                                         
     under AS 43.55.011(e) and 43.55.410 exceeds zero before                                                                
     application of any credits under this chapter, other than a credit                                                         
     under (a) of this section but after application of any credit under                                                        
     (a) of this section, a producer that is qualified under (e) of this                                                        
     section and whose average amount of oil and gas produced a day                                                             
     and taxable under AS 43.55.011(e) and 43.55.410 is less than                                                           
     100,000 BTU equivalent barrels a day may apply a tax credit                                                                
     under this subsection against that liability. A producer whose                                                             
     average amount of oil and gas produced a day and taxable under                                                             
     AS 43.55.011(e) and 43.55.410 is                                                                                       
              (1)  not more than 50,000 BTU equivalent barrels may                                                              
     apply a tax credit of not more than $12,000,000 for the calendar                                                           
     year;                                                                                                                      
              (2)  more than 50,000 and less than 100,000 BTU                                                                   
     equivalent barrels may apply a tax credit of not more than                                                                 
     $12,000,000 multiplied by the following fraction for the calendar                                                          
     year:                                                                                                                      
                      1 - [2 X (AP - 50,000) ] / 100,000                                                                       
     where AP = the average amount of oil and gas taxable under                                                                 
     AS 43.55.011(e), produced a day during the calendar year in BTU                                                            
     equivalent barrels."                                                                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 16, following line 22:                                                                                                     
     Insert new bill sections to read:                                                                                          
"* Sec. 31. AS 43.55.024(f) is amended to read:                                                                               
          (f)  A tax credit authorized by (a) of this section may not be                                                        
     applied to reduce a producer's tax liability for any calendar year                                                         
     under AS 43.55.011(e) and 43.55.410 on oil and gas produced                                                            
     from leases or properties outside the Cook Inlet sedimentary                                                               
     basin, no part of which is north of 68 degrees North latitude,                                                             
     below zero.                                                                                                                
   * Sec. 32. AS 43.55.024(g) is amended to read:                                                                             
          (g)  A tax credit authorized by (c) of this section may not be                                                        
     applied to reduce a producer's tax liability for any calendar year                                                         
     under AS 43.55.011(e) and 43.55.410 below zero."                                                                       
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0664
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 16, following line 28:                                                                                                     
     Insert new bill sections to read:                                                                                          
"* Sec. 34. AS 43.55.025(a) is amended to read:                                                                               
          (a)  Subject to the terms and conditions of this section, a credit                                                    
     against the production tax levied by AS 43.55.011(e) and                                                               
     43.55.410 is allowed for exploration expenditures that qualify                                                         
     under (b) of this section in an amount equal to one of the                                                                 
     following:                                                                                                                 
              (1)  30 percent of the total exploration expenditures that                                                        
     qualify only under (b) and (c) of this section;                                                                            
              (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;                                                                            
              (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;                                                                                                                   
              (6)  the lesser of $25,000,000 or 80 percent of the total                                                         
     exploration drilling expenditures described in (m) of this section                                                         
     and that qualify under (b) and (c) of this section; or                                                                     
              (7)  the lesser of $7,500,000 or 75 percent of the total                                                          
     seismic exploration expenditures described in (n) of this section                                                          
     and that qualify under (b) of this section.                                                                                
   * Sec. 35. AS 43.55.025(f) is amended to read:                                                                             
          (f)  For a production tax credit under this section,                                                                  
              (1)  an explorer shall, in a form prescribed by the                                                               
     department and, except for a credit under (k) of this section,                                                             
     within six months of the completion of the exploration activity,                                                           
     claim the credit and submit information sufficient to demonstrate                                                          
     to the department's satisfaction that the claimed exploration                                                              
     expenditures qualify under this section; in addition, the explorer                                                         
     shall submit information necessary for the commissioner of                                                                 
     natural resources to evaluate the validity of the explorer's                                                               
     compliance with the requirements of this section;                                                                          

2013-03-20                     Senate Journal                      Page 0665
              (2)  an explorer shall agree, in writing,                                                                         
                   (A)  to notify the Department of Natural Resources,                                                          
          within 30 days after completion of seismic or geophysical                                                             
          data processing, completion of well drilling, or filing of a                                                          
          claim for credit, whichever is the latest, for which exploration                                                      
          costs are claimed, of the date of completion and submit a                                                             
          report to that department describing the processing sequence                                                          
          and providing a list of data sets available;                                                                          
                   (B)  to provide to the Department of Natural                                                                 
          Resources, within 30 days after the date of a request, unless a                                                       
          longer period is provided by the Department of Natural                                                                
          Resources, specific data sets, ancillary data, and reports                                                            
          identified in (A) of this paragraph; in this subparagraph,                                                           
                        (i)  a seismic or geophysical data set includes the                                                     
              data for an entire seismic survey, irrespective of whether                                                        
              the survey area covers nonstate land in addition to state                                                         
              land or land in a unit in addition to land outside a unit;                                                        
                        (ii)  well data include all analyses conducted on                                                       
              physical material, and well logs collected from the well,                                                         
              results, and copies of data collected and data analyses for                                                       
              the well, including well logs; sample analyses; testing                                                           
              geophysical and velocity data including seismic profiles                                                          
              and check shot surveys; testing data and analyses; age                                                            
              data; geochemical analyses; and tangible material;                                                                
                   (C)  that, notwithstanding any provision of AS 38,                                                           
          information provided under this paragraph will be held                                                                
             confidential by the Department of Natural Resources,                                                              
                        (i)  in the case of well data, until the expiration of                                                  
              the 24-month period of confidentiality described in                                                               
              AS 31.05.035(c), at which time the Department of                                                                  
              Natural Resources will release the information after 30                                                           
              days' public notice unless, in the discretion of the                                                              
              commissioner of natural resources, it is necessary to                                                             
              protect information relating to the valuation of unleased                                                         
              acreage in the same vicinity, or unless the well is on                                                            
              private land and the owner, including the lessor but not                                                          
              the lessee, of the oil and gas resources has not given                                                            
              permission to release the well data;                                                                              
                        (ii)  in the case of seismic or other geophysical                                                       
              data, other than seismic data acquired by seismic                                                                 

2013-03-20                     Senate Journal                      Page 0666
              exploration subject to (k) of this section, for 10 years                                                          
              following the completion date, at which time the                                                                  
              Department of Natural Resources will release the                                                                  
              information after 30 days' public notice, except as to                                                            
              seismic or other geophysical data acquired from private                                                           
              land, unless the owner, including a lessor but not a lessee,                                                      
              of the oil and gas resources in the private land gives                                                            
              permission to release the seismic or other geophysical                                                            
              data associated with the private land;                                                                            
                        (iii)  in the case of seismic data obtained by                                                          
              seismic exploration subject to (k) of this section, only                                                          
              until the expiration of 30 days' public notice issued on or                                                       
              after the date the production tax credit certificate is issued                                                    
              under (5) of this subsection;                                                                                     
              (3)  if more than one explorer holds an interest in a well                                                        
     or seismic exploration, each explorer may claim an amount of                                                               
     credit that is proportional to the explorer's cost incurred;                                                               
              (4)  the department may exercise the full extent of its                                                           
     powers as though the explorer were a taxpayer under this title, in                                                         
     order to verify that the claimed expenditures are qualified                                                                
     exploration expenditures under this section; and                                                                           
              (5)  if the department is satisfied that the explorer's                                                           
     claimed expenditures are qualified under this section and that all                                                         
     data required to be submitted under this section have been                                                                 
     submitted, the department shall issue to the explorer a production                                                         
     tax credit certificate for the amount of credit to be allowed against                                                      
     production taxes levied by AS 43.55.011(e) and 43.55.410;                                                              
     notwithstanding any contrary provision of AS 38, AS 40.25.100,                                                             
       or AS 43.05.230, the following information is not confidential:                                                         
                   (A)  the explorer's name;                                                                                    
                   (B)  the date of the application;                                                                            
                   (C)  the location of the well or seismic exploration;                                                        
                   (D)  the date of the department's issuance of the                                                            
          certificate; and                                                                                                      
                   (E)  the date on which the information required to be                                                        
          submitted under this section will be released.                                                                        
   * Sec. 36. AS 43.55.025(h) is amended to read:                                                                             
          (h)  A producer that purchases a production tax credit                                                                
     certificate may apply the credits against its production tax levied                                                        
     by AS 43.55.011(e) and 43.55.410. Regardless of the price the                                                          

2013-03-20                     Senate Journal                      Page 0667
     producer paid for the certificate, the producer may receive a credit                                                       
     against its production tax liability for the full amount of the credit,                                                    
     but for not more than the amount for which the certificate is                                                              
     issued. A production tax credit allowed under this section may not                                                         
     be applied more than once.                                                                                                 
   * Sec. 37. AS 43.55.025(i) is amended to read:                                                                             
          (i)  For a production tax credit under this section,                                                                  
              (1)  a credit may not be applied to reduce a taxpayer's tax                                                       
     liability under AS 43.55.011(e) and 43.55.410 below zero for a                                                         
     calendar year; and                                                                                                         
              (2)  an amount of the production tax credit in excess of                                                          
     the amount that may be applied for a calendar year under this                                                              
     subsection may be carried forward and applied against the                                                                  
     taxpayer's tax liability under AS 43.55.011(e) and 43.55.410 in                                                        
     one or more later calendar years.                                                                                          
   * Sec. 38. 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, 2016, a                                                      
     credit against the production tax levied by AS 43.55.011(e) and                                                        
     43.55.410 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. 39. AS 43.55.025(l) is amended to read:                                                                             
          (l)  The first three unaffiliated persons that drill an offshore                                                      
     exploration well for the purpose of discovering oil or gas in Cook                                                         
     Inlet that penetrates and evaluates a prospect in the pre-Tertiary                                                         
     zone using a jack-up rig are eligible for the credit under this                                                            
     subsection. The person that drills the first exploration well is                                                           
     entitled to a credit in the amount of 100 percent of its exploration                                                       

2013-03-20                     Senate Journal                      Page 0668
     expenditures or $25,000,000, whichever is less; the person that                                                            
     drills the second exploration well using the same jack-up rig is                                                           
     entitled to a credit in the amount of 90 percent of its exploration                                                        
     expenditures or $22,500,000, whichever is less; and the person                                                             
     that drills the third exploration well using the same jack-up rig is                                                       
     entitled to a credit in the amount of 80 percent of its exploration                                                        
     expenditures or $20,000,000, whichever is less. A person or an                                                             
     affiliate of a person drilling an exploration well is not entitled to a                                                    
     credit for more than one exploration well under this subsection.                                                           
     The department shall make a determination of the order in which                                                            
     the wells are drilled based on the date and time that the drill bit                                                        
     first turns to the right against the seafloor for the purpose of                                                           
     drilling the well. Exploration expenditures eligible for the credit in                                                     
     this subsection may include the necessary and reasonable costs to                                                          
     modify an existing jack-up rig for use in Cook Inlet, may not                                                              
     include the cost to construct or manufacture a jack-up rig, and,                                                           
     notwithstanding (b) of this section, must be incurred for work                                                             
     performed after March 31, 2010. If the exploration well for which                                                          
     a credit is received under this subsection results in sustained                                                            
     production of oil or gas from a reservoir discovered by the                                                                
     exploration well, and notwithstanding that the credit may have                                                             
     been transferred under (g) of this section, 50 percent of the                                                              
     amount of the credit received shall be repaid to the department by                                                         
     the person that received the credit in equal monthly installments                                                          
     over a 10-year period commencing 60 days after the start of                                                                
     sustained production of oil or gas. Whether the exploration well                                                           
     for which a credit is requested under this subsection penetrated                                                           
     and evaluated a prospect in the pre-Tertiary zone and the                                                                  
     exploration well resulted in sustained production of oil or gas                                                            
     from a reservoir discovered by the exploration well shall be                                                               
     determined by the commissioner of natural resources and reported                                                           
     to the commissioner. A taxpayer that obtains a credit under this                                                           
     subsection may not claim a tax credit under AS 43.55.023 or                                                            
     43.55.430 or another provision in this section for the same                                                            
     exploration expenditure. In this subsection,                                                                               
              (1)  "jack-up rig" means a mobile drilling platform with                                                          
     extendible legs for support on the ocean floor;                                                                            
              (2)  "reservoir" means an oil and gas accumulation,                                                               
     discovered and evaluated by testing, that is separate from any                                                             
     other accumulation of oil and gas;                                                                                         

2013-03-20                     Senate Journal                      Page 0669
              (3)  "sustained production" means production of oil or gas                                                        
     from a reservoir into a pipeline or other means of transportation to                                                       
     market, but does not include testing, evaluation, or pilot                                                                 
     production.                                                                                                                
   * Sec. 40. AS 43.55.025(m) is amended to read:                                                                             
          (m)  The persons that drill the first four exploration wells in                                                       
     the state and within the areas described in (o) of this section on                                                         
     state lands, private lands, or federal onshore lands for the purpose                                                       
     of discovering oil or gas that penetrate and evaluate a prospect in a                                                      
     basin described in (o) of this section are eligible for a credit under                                                     
     (a)(6) of this section. A credit under this subsection may not be                                                          
     taken for more than two exploration wells in a single area                                                                 
     described in (o)(1) - (6) of this section. Exploration expenditures                                                        
     eligible for the credit in this subsection must be incurred for work                                                       
     performed after June 1, 2012, and before July 1, 2016. A person                                                            
     planning to drill an exploration well on private land and to apply                                                         
     for a credit under this subsection shall obtain written consent from                                                       
     the owner of the oil and gas interest for the full public release of                                                       
     all well data after the expiration of the confidentiality period                                                           
     applicable to information collected under (f) of this section. The                                                         
     written consent of the owner of the oil and gas interest must be                                                           
     submitted to the commissioner of natural resources before                                                                  
     approval of the proposed exploration well. In addition to the                                                              
     requirements in (c) of this section and submission of the written                                                          
     consent of the owner of the oil and gas interest, a person planning                                                        
     to drill an exploration well shall obtain approval from the                                                                
     commissioner of natural resources before the well is spudded. The                                                          
     commissioner of natural resources shall make a written                                                                     
     determination approving or rejecting an exploration well within 60                                                         
     days after receiving the request for approval or as soon as is                                                             
     practicable thereafter. Before approving the exploration well, the                                                         
     commissioner of natural resources shall consider the following:                                                            
     the location of the well; the proximity to a community in need of a                                                        
     local energy source; the proximity of existing infrastructure; the                                                         
     experience and safety record of the explorer in conducting                                                                 
     operations in remote or roadless areas; the projected cost schedule;                                                       
     whether seismic mapping and seismic data sufficiently identify a                                                           
     particular trap for exploration; whether the targeted and planned                                                          
     depth and range are designed to penetrate and fully evaluate the                                                           
     hydrocarbon potential of the proposed prospect and reach the level                                                         

2013-03-20                     Senate Journal                      Page 0670
     below which economic hydrocarbon reservoirs are likely to be                                                               
     found, or reach 12,000 feet or more true vertical depth; and                                                               
     whether the exploration plan provides for a full evaluation of the                                                         
     wellbore below surface casing to the depth of the well. Whether                                                            
     the exploration well for which a credit is requested under this                                                            
     subsection is located within an area and a basin described under                                                           
     (o) of this section shall be determined by the commissioner of                                                             
     natural resources and reported to the commissioner. A taxpayer                                                             
     that obtains a credit under this subsection may not claim a tax                                                            
     credit under AS 43.55.023 or 43.55.430 or another provision in                                                         
     this section for the same exploration expenditure.                                                                         
   * Sec. 41. AS 43.55.025(n) is amended to read:                                                                             
          (n)  The persons that conduct the first four seismic exploration                                                      
     projects in the state and within the areas described in (o) of this                                                        
     section for the purpose of discovering oil or gas in a basin are                                                           
     eligible for the credit under (a)(7) of this section. A credit under                                                       
     this subsection may not be taken for more than one seismic                                                                 
     exploration project in a single area described in (o)(1) - (6) of this                                                     
     section. Exploration expenditures eligible for the credit in this                                                          
     subsection must be incurred for work performed after June 1,                                                               
     2012, and before July 1, 2016. A person planning to conduct a                                                              
     seismic exploration project on private land and to apply for a                                                             
     credit under this subsection shall obtain written consent from the                                                         
     owner of the oil and gas interest for the full public release of all                                                       
     geophysical data and compliance with the data submission                                                                   
     requirements in (f)(2) of this section. Notwithstanding (f)(2)(C)(ii)                                                      
     of this section, to qualify for a credit under this subsection, a                                                          
     person shall submit the written consent of the owner of the oil and                                                        
     gas interest for the release of data if applicable, and all data                                                           
     required under (f)(2) of this section to the Department of Natural                                                         
     Resources and shall agree in writing that all seismic data                                                                 
     requirements submitted under the requirements of (f)(2) of this                                                            
     section may be made public two years after receiving a credit                                                              
     under this subsection. A person intending to qualify for the tax                                                           
     credit under this subsection shall obtain approval from the                                                                
     commissioner of natural resources before the commencement of                                                               
     the seismic exploration activities. The commissioner of natural                                                            
     resources shall make a written determination approving or                                                                  
     rejecting a seismic project within 60 days after receiving the                                                             
     request for approval or as soon as is practicable thereafter. Before                                                       

2013-03-20                     Senate Journal                      Page 0671
     approving a seismic exploration project, the commissioner shall                                                            
     consider the following: the location of the project; the projected                                                         
     cost schedule; the data acquisition and data processing plan; the                                                          
     reasons for choosing the particular area for seismic exploration;                                                          
     and the experience and safety record of the person in conducting                                                           
     seismic exploration operations in remote or roadless areas.                                                                
     Whether the seismic exploration project for which a credit is                                                              
     requested under this subsection is located in a basin described in                                                         
     (o) of this section shall be determined by the commissioner of                                                             
     natural resources and reported to the commissioner. A taxpayer                                                             
     that obtains a credit under this subsection may not claim a tax                                                            
     credit under AS 43.55.023 or 43.55.430 or another provision in                                                         
     this section for the same exploration expenditure.                                                                         
   * Sec. 42. 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 or                                                      
     43.55.430 and production tax credit certificates issued under                                                          
     AS 43.55.025 and to pay refunds and payments claimed under                                                                 
     AS 43.20.046 or 43.20.047.                                                                                                 
   * Sec. 43. AS 43.55.028(b) is amended to read:                                                                             
          (b)  The oil and gas tax credit fund consists of                                                                      
              (1)  money appropriated to the fund, including any                                                                
     appropriation of the percentage provided under (c) of this section                                                         
     of all revenue from taxes levied by AS 43.55.011 and 43.55.410                                                         
     that is not required to be deposited in the constitutional budget                                                          
     reserve fund established in art. IX, sec. 17(a), Constitution of the                                                       
     State of Alaska; and                                                                                                       
              (2)  earnings on the fund.                                                                                        
   * Sec. 44. AS 43.55.028(c) is amended to read:                                                                             
          (c)  The applicable percentage for a fiscal year under (b)(1) of                                                      
     this section is determined with reference to the average price or                                                          
     value forecast by the department for Alaska North Slope oil sold                                                           
     or otherwise disposed of on the United States West Coast during                                                            
     the fiscal year for which the appropriation of revenue from taxes                                                          
     levied by AS 43.55.011 and 43.55.410 is made. If that forecast is                                                      
              (1)  $60 a barrel or higher, the applicable percentage is 10                                                      
     percent;                                                                                                                   
              (2)  less than $60 a barrel, the applicable percentage is 15                                                      
     percent."                                                                                                                  

2013-03-20                     Senate Journal                      Page 0672
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 22, following line 23:                                                                                                     
     Insert new bill sections to read:                                                                                          
"* Sec. 52. AS 43.55.165(e) is amended to read:                                                                               
          (e)  For purposes of this section, lease expenditures do not                                                          
     include                                                                                                                    
                (1)  depreciation, depletion, or amortization;                                                                 
              (2)  oil or gas royalty payments, production payments,                                                            
     lease profit shares, or other payments or distributions of a share of                                                      
     oil or gas production, profit, or revenue, except that a producer's                                                        
     lease expenditures applicable to oil and gas produced from a lease                                                         
     issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share                                                          
     of net profit paid to the state under that lease;                                                                          
                (3)  taxes based on or measured by net income;                                                                 
              (4)  interest or other financing charges or costs of raising                                                      
     equity or debt capital;                                                                                                    
              (5)  acquisition costs for a lease or property or exploration                                                     
     license;                                                                                                                   
              (6)  costs arising from fraud, willful misconduct, gross                                                          
     negligence, violation of law, or failure to comply with an                                                                 
     obligation under a lease, permit, or license issued by the state or                                                        
     federal government;                                                                                                        
              (7)  fines or penalties imposed by law;                                                                           
              (8)  costs of arbitration, litigation, or other dispute                                                           
     resolution activities that involve the state or concern the rights or                                                      
     obligations among owners of interests in, or rights to production                                                          
     from, one or more leases or properties or a unit;                                                                          
              (9)  costs incurred in organizing a partnership, joint                                                            
     venture, or other business entity or arrangement;                                                                          
              (10)  amounts paid to indemnify the state; the exclusion                                                          
     provided by this paragraph does not apply to the costs of obtaining                                                        
       insurance or a surety bond from a third-party insurer or surety;                                                        
              (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                          
              (12)  an expenditure otherwise deductible under (b) of                                                            
     this section that is a result of an internal transfer, a transaction                                                       
     with an affiliate, or a transaction between related parties, or is                                                         
     otherwise not an arm's length transaction, unless the producer                                                             
     establishes to the satisfaction of the department that the amount of                                                       

2013-03-20                     Senate Journal                      Page 0673
     the expenditure does not exceed the fair market value of the                                                               
     expenditure;                                                                                                               
              (13)  an expenditure incurred to purchase an interest in                                                          
     any corporation, partnership, limited liability company, business                                                          
     trust, or any other business entity, whether or not the transaction is                                                     
     treated as an asset sale for federal income tax purposes;                                                                  
              (14)  a tax levied under AS 43.55.011 or 43.55.410;                                                           
              (15)  costs incurred for dismantlement, removal,                                                                  
     surrender, or abandonment of a facility, pipeline, well pad,                                                               
     platform, or other structure, or for the restoration of a lease, field,                                                    
     unit, area, tract of land, body of water, or right-of-way in                                                               
     conjunction with dismantlement, removal, surrender, or                                                                     
     abandonment; a cost is not excluded under this paragraph if the                                                            
     dismantlement, removal, surrender, or abandonment for which the                                                            
     cost is incurred is undertaken for the purpose of replacing,                                                               
     renovating, or improving the facility, pipeline, well pad, platform,                                                       
     or other structure;                                                                                                        
              (16)  costs incurred for containment, control, cleanup, or                                                        
     removal in connection with any unpermitted release of oil or a                                                             
     hazardous substance and any liability for damages imposed on the                                                           
     producer or explorer for that unpermitted release; this paragraph                                                          
     does not apply to the cost of developing and maintaining an oil                                                            
        discharge prevention and contingency plan under AS 46.04.030;                                                          
              (17)  costs incurred to satisfy a work commitment under                                                           
     an exploration license under AS 38.05.132;                                                                                 
              (18)  that portion of expenditures, that would otherwise                                                          
     be qualified capital expenditures, as defined in AS 43.55.023,                                                             
     incurred during a calendar year that are less than the product of                                                          
     $0.30 multiplied by the total taxable production from each lease or                                                        
     property, in BTU equivalent barrels, during that calendar year,                                                            
     except that, when a portion of a calendar year is subject to this                                                          
     provision, the expenditures and volumes shall be prorated within                                                           
     that calendar year;                                                                                                        
              (19)  costs incurred for repair, replacement, or deferred                                                         
     maintenance of a facility, a pipeline, a structure, or equipment,                                                          
     other than a well, that results in or is undertaken in response to a                                                       
     failure, problem, or event that results in an unscheduled                                                                  
     interruption of, or reduction in the rate of, oil or gas production; or                                                    
     costs incurred for repair, replacement, or deferred maintenance of                                                         
     a facility, a pipeline, a structure, or equipment, other than a well,                                                      

2013-03-20                     Senate Journal                      Page 0674
     that is undertaken in response to, or is otherwise associated with,                                                        
     an unpermitted release of a hazardous substance or of gas;                                                                 
     however, costs under this paragraph that would otherwise                                                                   
     constitute lease expenditures under (a) and (b) of this section may                                                        
     be treated as lease expenditures if the department determines that                                                         
     the repair or replacement is solely necessitated by an act of war,                                                         
     by an unanticipated grave natural disaster or other natural                                                                
     phenomenon of an exceptional, inevitable, and irresistible                                                                 
     character, the effects of which could not have been prevented or                                                           
     avoided by the exercise of due care or foresight, or by an                                                                 
     intentional or negligent act or omission of a third party, other than                                                      
     a party or its agents in privity of contract with, or employed by,                                                         
     the producer or an operator acting for the producer, but only if the                                                       
     producer or operator, as applicable, exercised due care in                                                                 
     operating and maintaining the facility, pipeline, structure, or                                                            
     equipment, and took reasonable precautions against the act or                                                              
     omission of the third party and against the consequences of the act                                                        
     or omission; in this paragraph,                                                                                            
                   (A)  "costs incurred for repair, replacement, or                                                             
          deferred maintenance of a facility, a pipeline, a structure, or                                                       
          equipment" includes costs to dismantle and remove the                                                                 
          facility, pipeline, structure, or equipment that is being                                                             
          replaced;                                                                                                             
                   (B)  "hazardous substance" has the meaning given in                                                          
          AS 46.03.826;                                                                                                         
                   (C)  "replacement" includes renovation or                                                                    
          improvement;                                                                                                          
              (20)  costs incurred to construct, acquire, or operate a                                                          
     refinery or crude oil topping plant, regardless of whether the                                                             
     products of the refinery or topping plant are used in oil or gas                                                           
     exploration, development, or production operations; however, if a                                                          
     producer owns a refinery or crude oil topping plant that is located                                                        
     on or near the premises of the producer's lease or property in the                                                         
     state and that processes the producer's oil produced from that lease                                                       
     or property into a product that the producer uses in the operation                                                         
     of the lease or property in drilling for or producing oil or gas, the                                                      
     producer's lease expenditures include the amount calculated by                                                             
     subtracting from the fair market value of the product used the                                                             
     prevailing value, as determined under AS 43.55.020(f), of the oil                                                          
     that is processed;                                                                                                         

2013-03-20                     Senate Journal                      Page 0675
              (21)  costs of lobbying, public relations, public relations                                                       
     advertising, or policy advocacy.                                                                                           
   * Sec. 53. AS 43.55.165(f) is amended to read:                                                                             
          (f)  For purposes of AS 43.55.023(a) and (b) and 43.55.430                                                        
     and only as to expenditures incurred to explore for an oil or gas                                                          
     deposit located within land in which an explorer does not own a                                                            
     working interest, the term "producer" in this section includes                                                             
     "explorer."                                                                                                                
   * Sec. 54. AS 43.55.170(c) is amended to read:                                                                             
          (c)  For purposes of AS 43.55.023(a) and (b) and 43.55.430                                                        
     and only as to expenditures incurred to explore for an oil or gas                                                          
     deposit located within land in which an explorer does not own a                                                            
     working interest, the term "producer" in this section includes                                                             
     "explorer."                                                                                                                
   * Sec. 55. 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 and 43.55.410, the tax                                                           
     credits provided under AS 43.55.023 - 43.55.025 and 43.55.430,                                                         
     and the deductions for and adjustments to lease expenditures                                                               
          provided under AS 43.55.160 - 43.55.170 and 43.55.440; 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                                                        
     private landowners.                                                                                                        
   * Sec. 56. AS 43.55.201(b) is amended to read:                                                                             
          (b)  The surcharge imposed by (a) of this section is in addition                                                      
     to the tax imposed by AS 43.55.011 and 43.55.410 and is due on                                                         
     the last day of the month on oil produced from each lease or                                                               
     property during the preceding month. The surcharge is in addition                                                          
     to the surcharge imposed by AS 43.55.300 - 43.55.310.                                                                      
   * Sec. 57. AS 43.55.201(c) is amended to read:                                                                             
          (c)  A producer of oil shall make a report of production on                                                           
     March 31 of the year following the calendar year of production                                                             
     and in the same manner and under the same penalties as required                                                            

2013-03-20                     Senate Journal                      Page 0676
     under this chapter [AS 43.55.011 - 43.55.180].                                                                         
   * Sec. 58. AS 43.55.300(b) is amended to read:                                                                             
          (b)  The surcharge imposed by (a) of this section is in addition                                                      
     to the tax imposed by AS 43.55.011 and 43.55.410 and is due on                                                         
     the last day of the month on oil produced from each lease or                                                               
     property during the preceding month. The surcharge is in addition                                                          
     to the surcharge imposed by AS 43.55.201 - 43.55.231.                                                                      
   * Sec. 59. AS 43.55.300(c) is amended to read:                                                                             
          (c)  A producer of oil shall make a report of production on                                                           
     March 31 of the year following the calendar year of production                                                             
     and in the same manner and under the same penalties as required                                                            
     under this chapter [AS 43.55.011 - 43.55.180].                                                                         
   * Sec. 60. AS 43.55 is amended by adding new sections to read:                                                             
         Article 4. Oil and Gas Production Tax - Legacy Fields                                                                
          Sec. 43.55.410. Oil and gas production tax for legacy                                                               
     fields. (a) 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 a legacy field 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                                                         
     AS 43.55.011(f), (j), (k), (o), and (p), the tax is equal to the sum of                                                    
              (1)  the annual production tax value of the taxable oil and                                                       
     gas as calculated under AS 43.55.440 multiplied by 25 percent;                                                             
     and                                                                                                                        
              (2)  the sum, over all months of the calendar year, of the                                                        
     tax amounts determined under (b) of this section.                                                                          
          (b)  For each month of the calendar year for which the                                                                
     producer's average monthly production tax value under                                                                      
     AS 43.55.440(a)(2) of a BTU equivalent barrel of the taxable oil                                                           
     and gas is more than $30, the amount of tax for purposes of (a)(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                                                                                                         
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0677
              (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 30 percent.                                                             
          Sec. 43.55.420. Payment of tax. In addition to payments                                                             
     required by AS 43.55.021, for a calendar year, a producer subject                                                          
     to tax under AS 43.55.410 shall pay the tax as follows:                                                                    
              (1)  an installment payment of the estimated tax levied by                                                        
     AS 43.55.410, 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 43.55.410 for                                                            
     the calendar year, but the amount of the installment payment may                                                           
     not be less than zero:                                                                                                     
                   (A)  for oil and gas subject to AS 43.55.410 produced                                                        
          from leases or properties in the state outside the Cook Inlet                                                         
          sedimentary basin, the greater of                                                                                     
                        (i)  zero; or                                                                                           
                        (ii)  the sum of 25 percent and the tax rate                                                            
              calculated for the month under AS 43.55.410(b)                                                                    
              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 oil and gas under                                                           
              AS 43.55.440 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 or gas subject to AS 43.55.011(j), (k), or                                                      
          (o), for each lease or property, the greater of                                                                       
                        (i)  zero; or                                                                                           
                        (ii)  the sum of 25 percent and the tax rate                                                            
              calculated for the month under AS 43.55.410(b)                                                                    
              multiplied by the remainder obtained by subtracting 1/12                                                          
              of the producer's adjusted lease expenditures for the                                                             

2013-03-20                     Senate Journal                      Page 0678
              calendar year of production under AS 43.55.165 and                                                                
              43.55.170 that are deductible under AS 43.55.440 for the                                                          
              oil or gas, as applicable, produced from the lease or                                                             
              property from the gross value at the point of production                                                          
              of the oil or gas, as applicable, produced from the lease or                                                      
              property during the month for which the installment                                                               
              payment is calculated;                                                                                            
              (2)  an amount calculated under (1)(B) of this subsection                                                         
     for oil or gas 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)  any amount of tax levied by AS 43.55.410, 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.                                                         
          Sec. 43.55.430. Tax credits for certain losses and                                                                  
     expenditures in a legacy field. (a) A producer or explorer may                                                           
     take a tax credit for a qualified capital expenditure incurred for a                                                       
     legacy field, 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 43.55.440, unless                                                         
     a credit for that expenditure is taken under AS 38.05.180(i),                                                              
     AS 41.09.010, AS 43.20.043, AS 43.55.023, or 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 43.55.410 in the amount of 20 percent of that expenditure;                                                          
              (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                                                                                               

2013-03-20                     Senate Journal                      Page 0679
                   (B)  submits to the Department of Natural Resources                                                          
          all data that would be required to be submitted under                                                                 
          AS 43.55.025(f)(2).                                                                                                   
          (b)  A producer or explorer may elect to take a tax credit in                                                         
     the amount of 25 percent of a carried-forward annual loss that                                                             
     results from lease expenditures incurred for a legacy field. A                                                             
     credit under this subsection may be applied against a tax levied by                                                        
     AS 43.55.410. 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 43.55.440.                                                        
          (c)  A credit or portion of a credit under this section may not                                                       
     be used to reduce a person's tax liability under AS 43.55.410 for                                                          
     any calendar year below zero, and any unused credit or portion of                                                          
     a credit not used under this subsection may be applied in a later                                                          
     calendar year.                                                                                                             
          (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                                                                  
     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: 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                                                             

2013-03-20                     Senate Journal                      Page 0680
     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.                                                                
          (e)  A person to which a transferable tax credit certificate is                                                       
     issued under (d) of this section may transfer the certificate to                                                           
     another person, and a transferee may further transfer the                                                                  
     certificate. Subject to the limitations set out in (a) - (d) of this                                                       
     section, and notwithstanding any action the department may take                                                            
     with respect to the applicant under (g) of this section, the owner of                                                      
     a certificate may apply the credit or a portion of the credit shown                                                        
     on the certificate only against a tax levied by AS 43.55.410.                                                              
     However, a credit shown on a transferable tax credit certificate                                                           
     may not be applied to reduce a transferee's total tax liability under                                                      
     AS 43.55.410 for oil and gas produced during a calendar year to                                                            
     less than 80 percent of the tax that would otherwise be due                                                                
     without applying that credit. Any portion of a credit not used                                                             
     under this subsection may be applied in a later period.                                                                    
          (f)  The issuance of a transferable tax credit certificate under                                                      
     (d) 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 43.55.410 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 43.55.410 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(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 43.55.410.                                                                        
          (g)  Regulations adopted to implement this section must                                                               
     include provisions prescribing reporting, record keeping, and                                                              
     certification procedures and requirements to verify the accuracy of                                                        
     credits claimed and to ensure that a credit is not used more than                                                          
     once.                                                                                                                      
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0681
          (h)  As a condition of receiving a tax credit under this section,                                                     
     a producer or explorer that obtains the tax credit for or directly                                                         
     related to a pipeline, facility, or other asset that is or becomes                                                         
     subject to regulation by the Federal Energy Regulatory                                                                     
     Commission, the Regulatory Commission of Alaska, or a                                                                      
     successor regulatory body shall at all times support and in all rate                                                       
     proceedings file to flow through 100 percent of the tax credits to                                                         
     ratepayers as a reduction in the costs of service for the pipeline,                                                        
     facility, or other asset.                                                                                                  
          (i)  An entity that is exempt from taxation under this chapter                                                        
     may not apply for a transferable tax credit certificate.                                                                   
          Sec. 43.55.440. Production tax value for legacy fields.  (a)                                                        
     Except as provided in (b) of this section, for the purposes of                                                             
              (1)  AS 43.55.410(a), 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 43.55.410, less the producer's lease expenditures for the legacy                                                        
     field 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 oil and gas produced from leases or                                                                   
     properties in legacy felids in the state;                                                                                  
              (2)  AS 43.55.011(b), the monthly production tax value of                                                         
     the taxable                                                                                                                
                   (A)  oil and gas produced during a month from leases                                                         
          or properties in legacy felids in the state is the gross value at                                                     
          the point of production of the oil and gas taxable under                                                              
          AS 43.55.410 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.                                                                           
          (b)  A production tax value calculated under this section may                                                         
     not be less than zero.                                                                                                     
          (c)  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                                                          

2013-03-20                     Senate Journal                      Page 0682
     the producer's costs of transportation for the calendar year.                                                              
          (d)  Irrespective of whether a producer produces taxable oil or                                                       
     gas during a calendar year or month, the producer is considered to                                                         
     have generated a positive production tax value if a calculation                                                            
     described in (a) of this section yields a positive number because                                                          
     the producer's adjusted lease expenditures for a calendar year                                                             
     under AS 43.55.165 and 43.55.170 are less than zero as a result of                                                         
     the producer's receiving a payment or credit under AS 43.55.170.                                                           
     An explorer that has taken a tax credit under AS 43.55.430(b) or                                                           
     that has obtained a transferable tax credit certificate under                                                              
     AS 43.55.430(d) for the amount of a tax credit under                                                                       
     AS 43.55.430(b) is considered a producer, subject to the tax levied                                                        
     under AS 43.55.410, to the extent that the explorer generates a                                                            
     positive production tax value as the result of the explorer's                                                              
     receiving a payment or credit under AS 43.55.170.                                                                          
          (e)  Any adjusted lease expenditures under AS 43.55.165 and                                                           
     43.55.170 that would otherwise be deductible by a producer in a                                                            
     calendar year but whose deduction would cause an annual                                                                    
     production tax value calculated under (a)(1) of this section of                                                            
     taxable oil or gas produced during the calendar year to be less than                                                       
     zero may be used to establish a carried-forward annual loss under                                                          
     AS 43.55.430(b). However, the department shall provide by                                                                  
     regulation a method to ensure that, for a period for which a                                                               
     producer's tax liability is limited by AS 43.55.011(j), (k), (o), or                                                       
     (p), any adjusted lease expenditures under AS 43.55.165 and                                                                
     43.55.170 that would otherwise be deductible by a producer for                                                             
     that period but whose deduction would cause a production tax                                                               
     value calculated under (a)(1) of this section to be less than zero                                                         
     are accounted for as though the adjusted lease expenditures had                                                            
     first been used as deductions in calculating the production tax                                                            
     values of oil or gas subject to any of the limitations under                                                               
     AS 43.55.011(j), (k), (o), or (p) that have positive production tax                                                        
     values so as to reduce the tax liability calculated without regard to                                                      
     the limitation to the maximum amount provided for under the                                                                
     applicable provision of AS 43.55.011(j), (k), (o), or (p). Only the                                                        
     amount of those adjusted lease expenditures remaining after the                                                            
     accounting provided for under this subsection may be used to                                                               
     establish a carried-forward annual loss under AS 43.55.430(b). In                                                          
     this subsection, "producer" includes "explorer."                                                                           
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0683
   * Sec. 61. AS 43.55.900 is amended by adding a new paragraph to                                                            
read:                                                                                                                           
              (25)  "legacy field" means leases or properties within a                                                          
     unit on January 1, 2012, from which 400,000,000 BTU equivalent                                                             
     barrels of oil and gas had been produced by a producer before                                                              
     January 1, 2013, and for which the average daily production of oil                                                         
     and gas during calendar year 2012 exceeded 75,000 BTU                                                                      
     equivalent barrels of oil and gas."                                                                                        
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 26, line 4:                                                                                                                
     Delete "Sections 9, 12, 13, and 28 - 30"                                                                                   
     Insert "Sections 11 - 15, 17 - 19, and 49 - 61"                                                                            
                                                                                                                                
Page 26, line 6:                                                                                                                
     Delete "Sections 10 and 27"                                                                                                
     Insert "Sections 14 and 48"                                                                                                
                                                                                                                                
Page 26, line 8:                                                                                                                
     Delete "Sections 15 and 18 - 21"                                                                                           
     Insert "Sections 21 and 24 - 27"                                                                                           
     Delete "sec. 15"                                                                                                           
     Insert "sec. 21                                                                                                            
                                                                                                                                
Page 26, line 10:                                                                                                               
     Delete "Sections 16, 19, and 24"                                                                                           
     Insert "Sections 22, 25, 45, and 52 - 54"                                                                                  
                                                                                                                                
Page 26, line 12:                                                                                                               
     Delete "Section 17"                                                                                                        
     Insert "Section 23"                                                                                                        
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 65"                                                                                                           
                                                                                                                                
Page 26, line 30:                                                                                                               
     Delete "Sections 10, 18, 20, 21, 24, 27, and 35"                                                                           
     Insert "Sections 14, 24, 26, 27, 45, 48, and 66"                                                                           
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0684
Page 26, line 31:                                                                                                               
     Delete "sec. 15"                                                                                                           
     Insert "sec. 21"                                                                                                           
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "Sections 1 - 6, 8, 9, 12 - 14, 16, 19, 22, 23, 28 - 33, and                                                        
36"                                                                                                                             
     Insert "Sections 1 - 7, 9 - 13, 15, 17 - 20, 22, 25, 28 - 44, 49 - 64,                                                     
and 67"                                                                                                                         
                                                                                                                                
Page 27, line 3:                                                                                                                
     Delete "Section 17"                                                                                                        
     Insert "Section 23"                                                                                                        
                                                                                                                                
Page 27, line 4:                                                                                                                
     Delete "secs. 42 and 43"                                                                                                   
     Insert "secs. 73 and 74"                                                                                                   
                                                                                                                                
Senator French moved for the adoption of Amendment No. 3. Senator                                                               
Coghill objected.                                                                                                               
                                                                                                                                
The question being: "Shall Amendment No. 3 be adopted?" The roll                                                                
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 3                                                                                                                 
                                                                                                                                
YEAS:  5   NAYS:  15   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Hoffman, Wielechowski                                                                            
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens                                                               
                                                                                                                                
and so, Amendment No. 3 failed.                                                                                                 
                                                                                                                                
Senators Wielechowski, Ellis, French, Gardner offered Amendment                                                                 
No. 4:                                                                                                                          
                                                                                                                                
Page 5, line 4, following "to":                                                                                                 
     Insert "the sum of"                                                                                                        
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0685
Page 5, line 6:                                                                                                                 
 Delete "[THE SUM OF]"                                                                                                          
                                                                                                                                
Page 5, line 9:                                                                                                                 
     Delete "and"                                                                                                               
     Insert "[AND]"                                                                                                             
                                                                                                                                
Page 5, lines 10 - 12:                                                                                                          
     Delete "[THE SUM, OVER ALL MONTHS OF THE                                                                                   
CALENDAR YEAR, OF THE TAX AMOUNTS DETERMINED                                                                                    
UNDER (g) OF THIS SECTION]"                                                                                                     
     Insert "; and                                                                                                          
              (3)  the sum, over all months of the calendar year, of the                                                    
     tax amounts determined under (g) of this section"                                                                          
                                                                                                                                
Page 5, following line 12:                                                                                                      
 Insert a new bill section to read:                                                                                             
   "* Sec. 10. AS 43.55.011(g) is amended 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 [PER] BTU equivalent barrel of the                                                             
     taxable oil and gas is more than $55 [$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 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 PER                                                                                   
     BTU EQUIVALENT BARREL AND $30; OR                                                                                          
              (2)  IF THE PRODUCER'S AVERAGE MONTHLY                                                                            
     PRODUCTION TAX VALUE 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 0.2 [0.1] percent                                                                
     multiplied by the number that represents the difference between                                                            

2013-03-20                     Senate Journal                      Page 0686
     the average monthly production tax value of a [PER] BTU                                                                
     equivalent barrel and $55 [$92.50], except that the sum                                                                
     determined under this paragraph may not exceed 15 [50] percent."                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 8, line 21, through page 11, line 21:                                                                                      
     Delete all material and insert:                                                                                            
"* Sec. 13. AS 43.55.020(a), as amended by sec. 12 of this Act, is                                                            
repealed and reenacted to read:                                                                                                 
          (a)  For a calendar year, a producer subject to tax under                                                             
     AS 43.55.011 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 not subject to AS 43.55.011(o) or                                                       
          (p)produced from leases or properties in the state outside the                                                        
          Cook Inlet sedimentary basin, other than leases or properties                                                         
          subject to AS 43.55.011(f), the greater of                                                                            
                        (i)  zero; or                                                                                           
                        (ii)  30 percent 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 oil and gas 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 combined with the                                                           
              gross value at the point of production of oil and gas                                                             
              produced from each lease or property multiplied by the                                                            
              applicable tax rate in AS 43.55.011(g);                                                                           
                   (B)  for oil and gas produced from leases or                                                                 
          properties subject to AS 43.55.011(f), the greatest of                                                                
                        (i)  zero;                                                                                              

2013-03-20                     Senate Journal                      Page 0687
                        (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 the leases or properties during the month for which                                                          
              the installment payment is calculated; or                                                                         
                        (iii)  30 percent 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 oil and gas 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 combined                                                              
              with the gross value at the point of production of oil and                                                        
              gas produced from each lease or property multiplied by                                                            
              the applicable tax rate in AS 43.55.011(g);                                                                       
                   (C)  for oil or gas subject to AS 43.55.011(j), (k), or                                                      
          (o), for each lease or property, the greater of                                                                       
                        (i)  zero; or                                                                                           
                        (ii)  30 percent 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 the 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;                                                                  
                   (D)  for oil and gas subject to AS 43.55.011(p), the                                                         
          lesser of                                                                                                             
                        (i)  30 percent 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 oil and gas 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, but not less than                                                          
              zero combined with the gross value at the point of                                                                
              production of oil and gas produced from each lease or                                                             

2013-03-20                     Senate Journal                      Page 0688
              property multiplied by the applicable tax rate in                                                                 
              AS 43.55.011(g); or                                                                                               
                        (ii)  four percent of the gross value at the point of                                                   
              production of the oil and gas produced from the leases or                                                         
              properties during the month, but not less than zero;                                                              
              (2)  an amount calculated under (1)(C) of this subsection                                                         
     for oil or gas 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, 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 26, line 4:                                                                                                                
     Delete "9, 12, 13, and 28 - 30"                                                                                            
     Insert "9, 10, 13, 14, and 29 - 31"                                                                                        
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0689
Page 26, line 6:                                                                                                                
     Delete "Sections 10 and 27"                                                                                                
     Insert "Sections 11 and 28"                                                                                                
                                                                                                                                
Page 26, line 8:                                                                                                                
     Delete "Sections 15 and 18 - 21"                                                                                           
     Insert "Sections 16 and 19 - 22"                                                                                           
                                                                                                                                
Page 26, line 10:                                                                                                               
     Delete "Sections 16, 19, and 24"                                                                                           
     Insert "Sections 17, 20, and 25"                                                                                           
                                                                                                                                
Page 26, line 12:                                                                                                               
     Delete "Section 17"                                                                                                        
     Insert "Section 18"                                                                                                        
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 35"                                                                                                           
                                                                                                                                
Page 26, line 30:                                                                                                               
     Delete "Sections 10, 18, 20, 21, 24, 27, and 35"                                                                           
     Insert "Sections 11, 19, 21, 22, 25, 28, and 36"                                                                           
                                                                                                                                
Page 26, line 31:                                                                                                               
     Delete "sec. 15"                                                                                                           
     Insert "sec. 16"                                                                                                           
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "12 - 14, 16, 19, 22, 23, 28 - 33, and 36"                                                                          
     Insert "10, 13 - 15, 17, 20, 23, 24, 29 - 34, and 37"                                                                      
                                                                                                                                
Page 27, line 4:                                                                                                                
     Delete "secs. 42 and 43"                                                                                                   
     Insert "secs. 43 and 44"                                                                                                   
                                                                                                                                
Senator Wielechowski moved for the adoption of Amendment No. 4.                                                                 
Senator Coghill objected.                                                                                                       
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0690
The question being: "Shall Amendment No. 4 be adopted?" The roll                                                                
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 4                                                                                                                 
                                                                                                                                
YEAS:  5   NAYS:  15   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Hoffman, Wielechowski                                                                            
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens                                                               
                                                                                                                                
and so, Amendment No. 4 failed.                                                                                                 
                                                                                                                                
Senator Stevens offered Amendment No. 5:                                                                                        
                                                                                                                                
Page 1, line 4:                                                                                                                 
     Delete "rate"                                                                                                            
     Insert "rates"                                                                                                           
                                                                                                                                
Page 2, following line 11:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 3.  AS 29.60.850(b), as amended by sec. 2 of this Act, is                                                             
amended to read:                                                                                                                
          (b)  Each fiscal year, the legislature may appropriate [AN                                                            
     AMOUNT] 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(q). 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 5, lines 6 - 7:                                                                                                            
     Delete "]                                                                                                                  
              (1)  before January 1, 2017, ["                                                                               
     Insert "(1)"                                                                                                               
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0691
Page 5, lines 9 - 10:                                                                                                           
     Delete "; and                                                                                                              
              (2)  after December 31, 2016, multiplied by 33 percent                                                        
     ["                                                                                                                         
     Insert "[; AND                                                                                                             
              (2)"                                                                                                              
                                                                                                                                
Page 5, following line 12:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 11. AS 43.55.011(e), as amended by sec. 10 of this Act, 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), (o), and                                                       
     (p) of this section, the tax is equal to the sum of [THE ANNUAL                                                        
     PRODUCTION TAX VALUE OF THE TAXABLE OIL AND                                                                                
     GAS AS CALCULATED UNDER AS 43.55.160(a) PRODUCED                                                                           
     DURING A CALENDAR YEAR]                                                                                                    
              (1)  the annual production tax value of the taxable oil                                                     
     and gas as calculated under AS 43.55.160(a)(1) multiplied by                                                           
     25 [35] percent; and                                                                                                   
              (2)  the sum, over all months of the calendar year, of                                                      
     the tax amounts determined under (q) of this section."                                                                 
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 5, following line 18:                                                                                                      
     Insert new bill sections to read:                                                                                          
   "* Sec. 13. AS 43.55.011(o), as amended by sec. 12 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.                                                       
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0692
   * Sec. 14. AS 43.55.011 is amended by adding a new subsection to                                                           
read:                                                                                                                           
          (q)  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 $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 8, line 21:                                                                                                                
     Delete "sec. 11"                                                                                                           
     Insert "sec. 15"                                                                                                           
                                                                                                                                
Page 11, following line 21:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 17. AS 43.55.020(a), as amended by secs. 15 and 16 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), (h), (i), (p), or (q) 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                                                            

2013-03-20                     Senate Journal                      Page 0693
     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(q)                                                                    
              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(q)                                                                    
              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                                                              
              those leases or properties during the month for which the                                                         
              installment payment is calculated;                                                                                
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0694
                   (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(q)                                                                    
              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                                                               
          produced from the lease or property during the month; and                                                             
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0695
                   (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 8:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 19. AS 43.55.020(d), as amended by sec. 18 of this Act, is                                                            
amended 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 (q) [AS 43.55.011(e)] 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 (q) [AS 43.55.011(e)] 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 (q) [AS 43.55.011(e)] produced by the producer from all                                                            
     leases and properties in the state during the calendar year."                                                              
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0696
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 13, following line 10:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 22. AS 43.55.023(a), as amended by sec. 21 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 13, line 23, through page 14, line 3:                                                                                      
     Delete all material and insert:                                                                                            
"* Sec. 24. AS 43.55.023(b), as amended by sec. 23 of this Act, is                                                            
amended to read:                                                                                                                

2013-03-20                     Senate Journal                      Page 0697
          (b)  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 TO EXPLORE FOR,                                                                                
     DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS                                                                                    
     LOCATED SOUTH OF 68 DEGREES NORTH LATITUDE,                                                                                
     AND 35 PERCENT OF A CARRIED-FORWARD ANNUAL                                                                                 
     LOSS BASED ON LEASE EXPENDITURES INCURRED                                                                                  
     AFTER DECEMBER 31, 2013, TO EXPLORE FOR, DEVELOP,                                                                          
     OR PRODUCE OIL OR GAS DEPOSITS LOCATED NORTH                                                                               
     OF 68 DEGREES NORTH LATITUDE]. 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 14, line 29:                                                                                                               
     Delete "sec. 18"                                                                                                           
     Insert "sec. 25"                                                                                                           
                                                                                                                                
Page 15, following line 15:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 27. AS 43.55.023(d), as amended by secs. 25 and 26 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                                                                  
     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                                                            

2013-03-20                     Senate Journal                      Page 0698
     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 15, following line 30:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 29. AS 43.55.023(g), as amended by sec. 28 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                                                              
     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(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)."                                                                    
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0699
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 16, following line 13:                                                                                                     
     Insert new bill sections to read:                                                                                          
"* Sec. 31. AS 43.55.023(n), as amended by sec. 30 of this Act, is                                                            
amended to read:                                                                                                                
          (n)  For the purposes of (l) and (p) 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.                                                                            
   * Sec. 32. 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, 2017, 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 17, following line 16:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 36. AS 43.55.028(e), as amended by sec. 35 of this Act, is                                                            
amended to read:                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0700
          (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 17, following line 26:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 38. AS 43.55.028(g), as amended by sec. 37 of this Act, 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 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."                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0701
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 18, following line 8:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 40. AS 43.55.030(e), as amended by sec. 39 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 21, following line 15:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 43. AS 43.55.160(a), as amended by secs. 41 and 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                                                                                                                         
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0702
                   (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(q), 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                                                      
          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                                                            

2013-03-20                     Senate Journal                      Page 0703
          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                                                                
          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 22, following line 4:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 45. AS 43.55.160(e), as amended by sec. 44 of this Act, is                                                            
amended to read:                                                                                                                
          (e)  Any adjusted lease expenditures under AS 43.55.165 and                                                           
     43.55.170 that would otherwise be deductible by a producer in a                                                            
     calendar year but whose deduction would cause an annual                                                                    

2013-03-20                     Senate Journal                      Page 0704
     production tax value calculated under (a)(1) [(a)] of this section of                                                  
     taxable oil or gas produced during the calendar year to be less than                                                       
     zero may be used to establish a carried-forward annual loss under                                                          
     AS 43.55.023(b). However, the department shall provide by                                                                  
     regulation a method to ensure that, for a period for which a                                                               
     producer's tax liability is limited by AS 43.55.011(j), (k), (o), or                                                       
     (p), any adjusted lease expenditures under AS 43.55.165 and                                                                
     43.55.170 that would otherwise be deductible by a producer for                                                             
     that period but whose deduction would cause a production tax                                                               
     value calculated under (a)(1)(C), (D), (E), or (F) [(a)(3), (4), (5),                                                  
     OR (6)] of this section to be less than zero are accounted for as                                                          
     though the adjusted lease expenditures had first been used as                                                              
     deductions in calculating the production tax values of oil or gas                                                          
     subject to any of the limitations under AS 43.55.011(j), (k), (o), or                                                      
     (p) that have positive production tax values so as to reduce the tax                                                       
     liability calculated without regard to the limitation to the                                                               
     maximum amount provided for under the applicable provision of                                                              
     AS 43.55.011(j), (k), (o), or (p). Only the amount of those                                                                
     adjusted lease expenditures remaining after the accounting                                                                 
     provided for under this subsection may be used to establish a                                                              
     carried-forward annual loss under AS 43.55.023(b). In this                                                                 
     subsection, "producer" includes "explorer.""                                                                               
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 22, following line 23:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 47.  AS 43.55.160 is amended by adding a new subsection to                                                            
read:                                                                                                                           
          (g) 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."                                                             
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0705
Page 25, following line 30:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 54. AS 43.55.024(i), 43.55.030(g), and 43.55.160(f) are                                                               
repealed January 1, 2017."                                                                                                      
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 26, line 4:                                                                                                                
     Delete "Sections 9, 12, 13, and 28 - 30"                                                                                   
     Insert "Sections 10, 16, 18, 42, 44, and 46"                                                                               
                                                                                                                                
Page 26, line 6:                                                                                                                
     Delete "Sections 10 and 27"                                                                                                
     Insert "Sections 12 and 41"                                                                                                
                                                                                                                                
Page 26, line 8:                                                                                                                
     Delete "Sections 15 and 18 - 21"                                                                                           
     Insert "Sections 21 and 25, 26, 28, and 30"                                                                                
     Delete "sec. 15"                                                                                                           
     Insert "sec. 21"                                                                                                           
                                                                                                                                
Page 26, line 10:                                                                                                               
     Delete "Sections 16, 19, and 24"                                                                                           
     Insert "Sections 23, 26, and 35"                                                                                           
                                                                                                                                
Page 26, line 12:                                                                                                               
     Delete all material and insert:                                                                                            
     "(e)  Sections 11, 17, 19, 43, 45, and 47 of this Act apply to oil                                                         
and gas produced after December 31, 2016.                                                                                       
     (f)  Sections 24, 27, and 36 of this Act apply to expenditures                                                             
incurred after December 31, 2016."                                                                                              
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
Page 26, line 30:                                                                                                               
     Delete "Sections 10, 18, 20, 21, 24, 27, and 35"                                                                           
     Insert "Sections 12, 25, 28, 30, 35, 41, and 52"                                                                           
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0706
Page 26, line 31:                                                                                                               
     Delete "sec. 15"                                                                                                           
     Insert "sec. 21"                                                                                                           
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "Sections 1 - 6, 8, 9, 12 - 14, 16, 19, 22, 23, 28 - 33, and                                                        
36"                                                                                                                             
     Insert "Sections 1, 2, 4 - 7, 9, 16, 18, 20, 23, 25, 26, 33, 34, 42, 44,                                                   
46, 48 - 50, and 53"                                                                                                            
                                                                                                                                
Page 27, line 3:                                                                                                                
     Delete all material and insert:                                                                                            
"* Sec. 61. Sections 3, 11, 13, 14, 17, 19, 22, 24, 27, 29, 31, 32, 36,                                                       
38, 40, 43, 45, 47, 56(f), and 57(g) of this Act take effect January 1,                                                         
2017."                                                                                                                          
                                                                                                                                
Page 27, line 4:                                                                                                                
 Delete "secs. 42 and 43"                                                                                                       
 Insert "secs. 60 and 61"                                                                                                       
                                                                                                                                
Senator Stevens moved for the adoption of Amendment No. 5. Senator                                                              
Coghill objected.                                                                                                               
                                                                                                                                
Senator French rose to a point of order. Senator French withdrew his                                                            
point of order.                                                                                                                 
                                                                                                                                
The question being: "Shall Amendment No. 5 be adopted?" The roll                                                                
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 5                                                                                                                 
                                                                                                                                
YEAS:  9   NAYS:  11   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Egan, Ellis, French, Gardner, Hoffman, Olson, Stedman,                                                                   
Stevens, Wielechowski                                                                                                           
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Fairclough, Giessel,                                                                   
Huggins, Kelly, McGuire, Meyer, Micciche                                                                                        
                                                                                                                                
and so, Amendment No. 5 failed.                                                                                                 
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0707
Senators Wielechowski, Ellis, French, Gardner offered Amendment                                                                 
No. 6:                                                                                                                          
                                                                                                                                
Page 1, line 4, following "rate;":                                                                                            
     Insert "relating to the minimum tax on oil and gas                                                                       
production;"                                                                                                                  
                                                                                                                                
Page 5, following line 12:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 10. AS 43.55.011(f) is repealed and reenacted to read:                                                                
          (f)  Except for oil and gas subject to (i) of this section and gas                                                    
     subject to (o) of this section, the provisions of this subsection                                                          
     apply to oil and gas produced from each lease or property within a                                                         
     unit or nonunitized reservoir that has cumulatively produced                                                               
     1,000,000,000 BTU equivalent barrels of oil or gas by the close of                                                         
     the most recent calendar year and from which the average daily oil                                                         
     and gas production from the unit or nonunitized reservoir during                                                           
     the most recent calendar year exceeded 100,000 BTU equivalent                                                              
     barrels. Notwithstanding any contrary provision of law, a producer                                                         
     may not apply tax credits to reduce its total tax liability under (e)                                                      
     of this section for oil and gas produced from all leases or                                                                
     properties within the unit or nonunitized reservoir below 10                                                               
     percent of the total gross value at the point of production of that                                                        
     oil and gas. If the amount of tax calculated by multiplying the tax                                                        
     rates in (e) of this section by the total production tax value of the                                                      
     oil and gas taxable under (e) of this section produced from all of                                                         
     the producer's leases or properties within the unit or nonunitized                                                         
     reservoir is less than 10 percent of the total gross value at the point                                                    
     of production of that oil and gas, the tax levied by (e) of this                                                           
     section for that oil and gas is equal to 10 percent of the total gross                                                     
     value at the point of production of that oil and gas."                                                                     
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 8, line 21:                                                                                                                
     Delete "sec. 11"                                                                                                           
     Insert "sec. 12"                                                                                                           
                                                                                                                                
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0708
Page 9, line 14, through page 10, line 1:                                                                                       
     Delete all material and insert:                                                                                            
                   "(B)  for oil and gas produced from leases or                                                                
          properties subject to AS 43.55.011(f), 10 percent of the gross                                                    
          value at the point of production of that oil and gas [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 THE 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 THE OIL AND GAS                                                                           
              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;]"                                                                                                     
                                                                                                                                
Page 13, line 23:                                                                                                               
     Delete "sec. 16"                                                                                                           
     Insert "sec. 17"                                                                                                           
                                                                                                                                
Page 14, line 29:                                                                                                               
     Delete "sec. 18"                                                                                                           
     Insert "sec. 19"                                                                                                           
                                                                                                                                
Page 26, line 4:                                                                                                                
     Delete "12, 13, and 28 - 30"                                                                                               
     Insert "10, 13, 14, and 29 - 31"                                                                                           
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0709
Page 26, line 6:                                                                                                                
     Delete "Sections 10 and 27"                                                                                                
     Insert "Sections 11 and 28"                                                                                                
                                                                                                                                
Page 26, line 8:                                                                                                                
     Delete "Sections 15 and 18 - 21"                                                                                           
     Insert "Sections 16 and 19 - 22"                                                                                           
     Delete "sec. 15"                                                                                                           
     Insert "sec. 16"                                                                                                           
                                                                                                                                
Page 26, line 10:                                                                                                               
     Delete "Sections 16, 19, and 24"                                                                                           
     Insert "Sections 17, 20, and 25"                                                                                           
                                                                                                                                
Page 26, line 12:                                                                                                               
     Delete "Section 17"                                                                                                        
     Insert "Section 18"                                                                                                        
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 35"                                                                                                           
                                                                                                                                
Page 26, line 30:                                                                                                               
     Delete "Sections 10, 18, 20, 21, 24, 27, and 35"                                                                           
     Insert "Sections 11, 19, 21, 22, 25, 28, and 36"                                                                           
                                                                                                                                
Page 26, line 31:                                                                                                               
     Delete "sec. 15"                                                                                                           
     Insert "sec. 16"                                                                                                           
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "12 - 14, 16, 19, 22, 23, 28 - 33, and 36"                                                                          
     Insert "10, 13 - 15, 17, 20, 23, 24, 29 - 34, and 37"                                                                      
                                                                                                                                
Page 27, line 3:                                                                                                                
     Delete "Section 17"                                                                                                        
     Insert "Section 18"                                                                                                        
                                                                                                                                
Page 27, line 4:                                                                                                                
     Delete "secs. 42 and 43"                                                                                                   
     Insert "secs. 43 and 44"                                                                                                   
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0710
Senator Wielechowski moved for the adoption of Amendment No. 6.                                                                 
Senator Coghill objected.                                                                                                       
                                                                                                                                
The question being: "Shall Amendment No. 6 be adopted?" The roll                                                                
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 6                                                                                                                 
                                                                                                                                
YEAS:  5   NAYS:  15   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Hoffman, Wielechowski                                                                            
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens                                                               
                                                                                                                                
and so, Amendment No. 6 failed.                                                                                                 
                                                                                                                                
Senators French, Ellis, Wielechowski, Gardner offered Amendment                                                                 
No. 7:                                                                                                                          
                                                                                                                                
Page 22, line 8:                                                                                                                
     Delete "one or more"                                                                                                       
     Insert "either or both"                                                                                                    
                                                                                                                                
Page 22, lines 13 - 20:                                                                                                         
     Delete "; (3) the oil or gas is produced from a well that has been                                                         
accurately metered and measured by the operator to the satisfaction of                                                          
the commissioner, and the producer demonstrates to the department                                                               
that the metered well drains a reservoir or portion of a reservoir that                                                         
the Department of Natural Resources has certified was not                                                                       
contributing to production before January 1, 2013, and the producer                                                             
demonstrates to the department that the volume of oil or gas produced                                                           
from the well was subject to certification by the Department of Natural                                                         
Resources"                                                                                                                      
                                                                                                                                
Senator French moved for the adoption of Amendment No. 7. Senator                                                               
Coghill objected.                                                                                                               
                                                                                                                                
The question being: "Shall Amendment No. 7 be adopted?" The roll                                                                
was taken with the following result:                                                                                            

2013-03-20                     Senate Journal                      Page 0711
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 7                                                                                                                 
                                                                                                                                
YEAS:  4   NAYS:  16   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Wielechowski                                                                                     
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson,                                                                       
Stedman, Stevens                                                                                                                
                                                                                                                                
and so, Amendment No. 7 failed.                                                                                                 
SB 21                                                                                                                         
CS FOR SENATE BILL NO. 21(FIN) am was before the Senate in                                                                      
second reading.                                                                                                                 
                                                                                                                                
Senators Gardner, Ellis, French, Wielechowski offered Amendment                                                                 
No. 8:                                                                                                                          
                                                                                                                                
Page 22, line 7, following "section,":                                                                                          
     Insert "for oil and gas production commencing after the effective                                                          
date of this section for the first seven years immediately following the                                                        
commencement of production subject to tax under AS 43.55.011(e),"                                                               
                                                                                                                                
Senator Gardner moved for the adoption of Amendment No. 8.                                                                      
Senator Giessel objected.                                                                                                       
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0712
The question being: "Shall Amendment No. 8 be adopted?" The roll                                                                
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 8                                                                                                                 
                                                                                                                                
YEAS:  4   NAYS:  16   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Wielechowski                                                                                     
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson,                                                                       
Stedman, Stevens                                                                                                                
                                                                                                                                
and so, Amendment No. 8 failed.                                                                                                 
                                                                                                                                
Senators Gardner, Ellis, French, Wielechowski offered Amendment                                                                 
No. 9:                                                                                                                          
                                                                                                                                
Page 22, line 7:                                                                                                                
     Delete "of oil or gas meeting"                                                                                             
     Insert "for that portion of oil or gas that exceeds the estimated                                                          
production for the applicable field in the crude oil production forecast                                                        
in the fall 2012 Revenue Sources Book published by the department                                                               
and that meets"                                                                                                                 
                                                                                                                                
Senator Gardner moved for the adoption of Amendment No. 9.                                                                      
Senator McGuire objected.                                                                                                       
                                                                                                                                
The question being: "Shall Amendment No. 9 be adopted?" The roll                                                                
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 9                                                                                                                 
                                                                                                                                
YEAS:  5   NAYS:  15   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Hoffman, Wielechowski                                                                            
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Huggins, Kelly, McGuire, Meyer, Micciche, Olson, Stedman, Stevens                                                               
                                                                                                                                
and so, Amendment No. 9 failed.                                                                                                 
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0713
Senators French, Ellis, Gardner, Wielechowski offered Amendment                                                                 
No. 10:                                                                                                                         
                                                                                                                                
Page 1, line 9, following "explorers;":                                                                                       
     Insert "relating to the financing of oil processing facilities on                                                        
the North Slope by the Alaska Industrial Development and Export                                                               
Authority;"                                                                                                                   
                                                                                                                                
Page 25, following line 28:                                                                                                     
     Insert new bill sections to read:                                                                                          
"* Sec. 35. AS 44.88.080 is amended by adding a new paragraph to                                                              
read:                                                                                                                           
              (32)  to acquire an interest in a project as necessary or                                                         
     appropriate to provide working or venture capital for an oil or                                                            
     natural gas development project under AS 44.88.800 and                                                                     
     44.88.810, whether by purchase, gift, or lease.                                                                            
   * Sec. 36. AS 44.88 is amended by adding new sections to read:                                                             
                Article 9A. Interest in Oil and Gas Resources.                                                                
          Sec. 44.88.800. Acquisition of interest in businesses. (a) The                                                      
     authority may acquire, through purchase or other means, an                                                                 
     interest in a lease held by a corporation or other business entity in                                                      
     an oil or natural gas field in the state that has been explored, but                                                       
     only if the authority determines the leaseholder has made                                                                  
     reasonable efforts to obtain financing from the private sector to                                                          
     develop the lease and those efforts have, in whole or part, been                                                           
     unsuccessful. The authority shall exercise due diligence in                                                                
     acquiring a leasehold interest under this section.                                                                         
          (b)  If the authority acquires a leasehold interest under this                                                        
     section, the authority may use the authority's assets, as                                                                  
     appropriate, to aid in the development of the oil or natural gas                                                           
     field in which the business entity has a leasehold interest.                                                               
          Sec. 44.88.810. Alaska resource development fund. (a) The                                                           
     Alaska resource development fund is established in the authority                                                           
     for the purpose of developing oil and gas resources, and consists                                                          
     of appropriations to the fund. The authority shall manage the fund                                                         
     and may create separate accounts within it. Income of the fund or                                                          
     of enterprises of the authority shall be separately accounted for                                                          
     and may be appropriated to the fund.                                                                                       
          (b)  The authority may use money from the fund to carry out                                                           
     the purpose of the fund set out in (a) of this section.                                                                    

2013-03-20                     Senate Journal                      Page 0714
   * Sec. 37. AS 44.88.900(10) is amended to read:                                                                            
              (10)  "project" means                                                                                             
                   (A)  a plant or facility used or intended for use in                                                         
          connection with making, processing, preparing, transporting,                                                          
          or producing in any manner, goods, products, or substances of                                                         
          any kind or nature or in connection with developing or                                                                
          utilizing a natural resource, or extracting, smelting,                                                                
          transporting, converting, assembling, or producing in any                                                             
          manner, minerals, raw materials, chemicals, compounds,                                                                
          alloys, fibers, commodities and materials, products, or                                                               
          substances of any kind or nature;                                                                                     
                   (B)  a plant or facility used or intended for use in                                                         
          connection with a business enterprise;                                                                                
                   (C)  commercial activity by a business enterprise;                                                           
                   (D)  a plant or facility demonstrating technological                                                         
          advances of new methods and procedures and prototype                                                                  
          commercial applications for the exploration, development,                                                             
          production, transportation, conversion, and use of energy                                                             
          resources;                                                                                                            
                   (E)  infrastructure for a new tourism destination                                                            
          facility or for the expansion of a tourism destination facility;                                                      
          in this subparagraph, "tourism destination facility" does not                                                         
          include a hotel or other overnight lodging facility;                                                                  
                   (F)  a plant or facility, other than a plant or facility                                                     
          described in (D) of this paragraph, for the generation,                                                               
          transmission, development, transportation, conversion, or use                                                         
          of energy resources;                                                                                                  
                   (G)  a plant or facility that enhances, provides for, or                                                     
          promotes economic development with respect to                                                                         
          transportation, communications, community public purposes,                                                            
          technical innovations, prototype commercial applications of                                                           
          intellectual property, or research;                                                                                   
                   (H)  a plant or facility used or intended for use as a                                                       
          federal facility, including a United States military, national                                                        
          guard, or coast guard facility;                                                                                       
                   (I)  infrastructure for an area that is designated as a                                                      
          military facility zone under AS 26.30;                                                                                
                   (J)  development of an oil and gas field by                                                              
          providing working or venture capital in exchange for an                                                           
          equity interest;"                                                                                                 

2013-03-20                     Senate Journal                      Page 0715
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 37"                                                                                                           
                                                                                                                                
Page 26, line 30:                                                                                                               
     Delete "35"                                                                                                                
     Insert "38"                                                                                                                
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "36"                                                                                                                
     Insert "39"                                                                                                                
                                                                                                                                
Page 27, line 4:                                                                                                                
     Delete "secs. 42 and 43"                                                                                                   
     Insert "secs. 45 and 46"                                                                                                   
                                                                                                                                
Senator French moved for the adoption of Amendment No. 10.                                                                      
Senator Coghill objected.                                                                                                       
                                                                                                                                
The question being: "Shall Amendment No. 10 be adopted?" The roll                                                               
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 10                                                                                                                
                                                                                                                                
YEAS:  4   NAYS:  16   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Wielechowski                                                                                     
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson,                                                                       
Stedman, Stevens                                                                                                                
                                                                                                                                
and so, Amendment No. 10 failed.                                                                                                
                                                                                                                                
Senators Wielechowski, Ellis, French, Gardner offered Amendment                                                                 
No. 11:                                                                                                                         
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0716
Page 1, line 2, following "Revenue;":                                                                                         
     Insert "relating to oil and gas leasing;"                                                                                
                                                                                                                                
Page 2, following line 16:                                                                                                      
     Insert new bill sections to read:                                                                                          
"* Sec. 4. AS 38.05.180(h) is amended to read:                                                                                
          (h)  The commissioner shall [MAY] include terms in a                                                          
     [ANY] lease that impose [IMPOSING] a minimum work                                                                      
     commitment on the lessee to implement the plan of                                                                      
     development submitted by the lessee with a bid for an oil and                                                          
     gas or gas only lease. The terms of the minimum work                                                                   
     commitment must [. THESE TERMS SHALL BE MADE                                                                           
     PUBLIC BEFORE THE SALE, AND MAY] include appropriate                                                                       
     penalty provisions to take effect in the event the lessee does not                                                         
     fulfill the minimum work commitment. If it is demonstrated that a                                                          
     lease has been proven unproductive by actions of adjacent lease                                                            
     holders, the commissioner may set aside a work commitment. The                                                             
     commissioner may waive for a period not to exceed one two-year                                                             
     period any term of a minimum work commitment if the                                                                        
     commissioner makes a written finding either that conditions                                                                
     preventing drilling or exploration were beyond the lessee's                                                                
     reasonable ability to foresee or control or that the lessee has                                                            
     demonstrated through good faith efforts an intent and ability to                                                           
     drill or develop the lease during the term of the waiver.                                                                  
   * Sec. 5. AS 38.05.180(x) is amended to read:                                                                              
          (x) A lessee conducting or permitting any exploration for, or                                                         
     development or production of, oil or gas on state land shall                                                               
     provide the commissioner: access to all noninterpretive data                                                           
     obtained from that lease; access to all information necessary to                                                       
     perform an economic analysis of the production capability of                                                           
     each participating area, including capital, operating,                                                                 
     production, and development costs and an estimate of total                                                             
     reserves; and [SHALL PROVIDE] copies of the noninterpretive                                                        
     [THAT] data and economic and reserve information, as the                                                               
     commissioner may request. The confidentiality provisions of                                                                
     AS 38.05.035 apply to the information obtained under this                                                                  
     subsection.                                                                                                                
   * Sec. 6. AS 38.05.180 is amended by adding new subsections to                                                             
read:                                                                                                                           
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0717
          (hh)  The commissioner shall require each bidder for an oil                                                           
     and gas lease or gas only lease and each lessee applying for an                                                            
     extension or renewal of an oil and gas lease or gas only lease to                                                          
     submit a plan of development for exploring, developing, and                                                                
     producing from the lease within the period of the lease or the                                                             
     extension or renewal of the lease. The commissioner shall review                                                           
     each plan of development and determine whether the proposed                                                                
     plan of development is reasonably expected to develop the lease in                                                         
     the best interest of the state. The plan of development shall be                                                           
     included in a lease along with penalties for failing to comply with                                                        
     the plan of development and other terms of the lease. A bidder                                                             
     may not be a qualified bidder for the purposes of (f)(1) of this                                                           
     section if the commissioner finds that the bidder has not submitted                                                        
     a proposed plan of development that is in the best interest of the                                                         
     state or that the person that submitted the plan of development is                                                         
     not reasonably capable of implementing the plan.                                                                           
          (ii)  The commissioner shall                                                                                          
              (1)  review each oil and gas lease or gas only lease each                                                         
     year for the purpose of determining whether a lease is being                                                               
     developed in the best interest of the state, whether the lessee is                                                         
     complying with the plan of development applicable to the lease,                                                            
     and whether revision of a plan of development, including the                                                               
     planned rate of development, would provide the maximum benefit                                                             
     to the people of the state;                                                                                                
              (2)  every five years, perform an economic analysis on                                                            
     each participating area and determine whether the participating                                                            
     area is capable of increased production in paying quantities over                                                          
     the current rate of production or plan of development;                                                                     
              (3)  enforce the terms of each oil and gas lease or gas only                                                      
     lease, including imposing any applicable penalty or other remedy                                                           
     for noncompliance, within a reasonable time after finding that a                                                           
     lessee is out of compliance with the terms of the lease;                                                                   
              (4)  submit a report to the legislature before the first day                                                      
     of each regular session that lists each oil and gas or gas only lessee                                                     
     that is found to be out of compliance and the action by the                                                                
     commissioner to bring the lessee back into compliance or to                                                                
     terminate the lease.                                                                                                       
          (jj)  For the purposes of (hh) and (ii) of this section, a plan of                                                    
     development for a cooperative or unit under (p) of this section is                                                         
     the plan of development for a lease within the cooperative or unit,                                                        

2013-03-20                     Senate Journal                      Page 0718
     except where a different plan of development is established for a                                                          
     lease within the cooperative or unit.                                                                                      
          (kk)  For purposes of (ii) of this section,                                                                           
              (1)  "participating area" means that part of an oil and gas                                                       
     lease unit area to which production is allocated in the manner                                                             
     described in a unit agreement;                                                                                             
              (2)  "production in paying quantities" means production                                                           
     in quantities sufficient to yield a return in excess of drilling,                                                          
     development, and operating costs."                                                                                         
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 8, line 21:                                                                                                                
     Delete "sec. 11"                                                                                                           
     Insert "sec. 14"                                                                                                           
                                                                                                                                
Page 13, line 23:                                                                                                               
     Delete "sec. 16"                                                                                                           
     Insert "sec. 19"                                                                                                           
                                                                                                                                
Page 14, line 29:                                                                                                               
     Delete "sec. 18"                                                                                                           
     Insert "sec. 21"                                                                                                           
                                                                                                                                
Page 26, line 4:                                                                                                                
     Delete "Sections 9, 12, 13, and 28 - 30"                                                                                   
     Insert "Sections 12, 15, 16, and 31 - 33"                                                                                  
                                                                                                                                
Page 26, line 6:                                                                                                                
     Delete "Sections 10 and 27"                                                                                                
     Insert "Sections 13 and 30"                                                                                                
                                                                                                                                
Page 26, line 8:                                                                                                                
     Delete "Sections 15 and 18 - 21"                                                                                           
     Insert "Sections 18 and 21 - 24"                                                                                           
     Delete "sec. 15"                                                                                                           
     Insert "sec. 18"                                                                                                           
                                                                                                                                
Page 26, line 10:                                                                                                               
     Delete "Sections 16, 19, and 24"                                                                                           
     Insert "Sections 19, 22, and 27"                                                                                           
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0719
Page 26, line 12:                                                                                                               
     Delete "Section 17"                                                                                                        
     Insert "Section 20"                                                                                                        
                                                                                                                                
Page 26, following line 12:                                                                                                     
     Insert a new subsection to read:                                                                                           
     "(f)  Sections 4 and 5 of this Act, and AS 38.05.180(hh) enacted                                                           
by sec. 6 of this Act, apply to a proposed lease sale and the renewal or                                                        
extension of a lease on or after the effective date of secs. 4 - 6 of this                                                      
Act."                                                                                                                           
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 37"                                                                                                           
                                                                                                                                
Page 26, line 30:                                                                                                               
     Delete "Sections 10, 18, 20, 21, 24, 27, and 35"                                                                           
     Insert "Sections 13, 21, 23, 24, 27, 30, and 38"                                                                           
                                                                                                                                
Page 26, line 31:                                                                                                               
     Delete "sec. 15"                                                                                                           
     Insert "sec. 18"                                                                                                           
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "Sections 1 - 6, 8, 9, 12 - 14, 16, 19, 22, 23, 28 - 33, and                                                        
36"                                                                                                                             
     Insert "Sections 1 - 3, 7 - 9, 11, 12, 15 - 17, 19, 22, 25, 26, 31 - 36                                                    
and 39"                                                                                                                         
                                                                                                                                
Page 27, line 3:                                                                                                                
     Delete "Section 17"                                                                                                        
     Insert "Section 20"                                                                                                        
                                                                                                                                
Page 27, line 4:                                                                                                                
     Delete "secs. 42 and 43"                                                                                                   
     Insert "secs. 45 and 46"                                                                                                   
                                                                                                                                
Senator Wielechowski moved for the adoption of Amendment No. 11.                                                                
Senator Coghill objected.                                                                                                       
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0720
The question being: "Shall Amendment No. 11 be adopted?" The roll                                                               
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 11                                                                                                                
                                                                                                                                
YEAS:  4   NAYS:  16   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Wielechowski                                                                                     
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson,                                                                       
Stedman, Stevens                                                                                                                
                                                                                                                                
and so, Amendment No. 11 failed.                                                                                                
                                                                                                                                
Senators Wielechowski, Ellis, French, Gardner offered Amendment                                                                 
No. 12:                                                                                                                         
                                                                                                                                
Page 13, line 10:                                                                                                               
     Delete "January 1, 2014"                                                                                               
     Insert "the effective date of this paragraph"                                                                          
                                                                                                                                
Page 25, following line 29:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 36. AS 43.55.011(g) and 43.55.160(c) are repealed."                                                                   
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 25, line 30:                                                                                                               
         Delete "AS 43.55.011(g), 43.55.023(i), and 43.55.160(c) are"                                                          
     Insert "AS 43.55.023(i) is"                                                                                                
                                                                                                                                
Page 26, line 5:                                                                                                                
     Delete "after December 31, 2013"                                                                                           
     Insert "on and after the effective date of secs. 9, 12, 13, and 28 -                                                       
30 of this Act"                                                                                                                 
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0721
Page 26, lines 10 - 11:                                                                                                         
     Delete "after December 31, 2013"                                                                                           
     Insert "on and after the effective date of secs. 16, 19, and 24 of                                                         
this Act"                                                                                                                       
                                                                                                                                
Page 26, line 12:                                                                                                               
     Delete "after December 31, 2016"                                                                                           
     Insert "on and after the effective date of sec. 17 of this Act"                                                            
                                                                                                                                
Page 26, following line 31:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 43. The uncodified law of the State of Alaska is amended by                                                           
adding a new section to read:                                                                                                   
     CONDITIONAL EFFECT. (a) Sections 9, 12, 13, 16, 22, 23, 28 -                                                               
30, and 36 of this Act, and AS 43.55.023(a)(3), added by sec. 15 of                                                             
this Act, take effect only if the total volume of oil delivered to the                                                          
Trans Alaska Pipeline System for transport in a calendar year after                                                             
2013 exceeds by more than 20 percent the volume of oil delivered to                                                             
the Trans Alaska Pipeline System for transport during calendar year                                                             
2012.                                                                                                                           
     (b)  Section 17 of this Act takes effect only if sec. 16 of this Act                                                       
takes effect."                                                                                                                  
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "9, 12 - 14, 16, 19, 22, 23, 28 - 33, and 36"                                                                       
     Insert "14, 19, 31 - 33, and 37"                                                                                           
                                                                                                                                
Page 27, line 3:                                                                                                                
     Delete all material and insert:                                                                                            
"* Sec. 45. If secs. 9, 12, 13, 16, 22, 23, 28 - 30, and 36 of this Act,                                                      
and AS 43.55.023(a)(3), added by sec. 15 of this Act, take effect under                                                         
sec. 43(a) of this Act, they take effect on January 1 of the calendar                                                           
year immediately following the calendar year in which the                                                                       
commissioner of natural resources notifies the lieutenant governor and                                                          
the revisor of statutes that the condition described in sec. 43(a) of this                                                      
Act has been satisfied.                                                                                                         
   * Sec. 46. If sec. 17 of this Act takes effect under sec. 43(b) of this                                                    
Act, it takes effect three years after the effective date of sec. 16 of this                                                    
Act."                                                                                                                           
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0722
Page 27, line 4:                                                                                                                
     Delete "secs. 42 and 43"                                                                                                   
     Insert "secs. 44 - 46"                                                                                                     
                                                                                                                                
Senator Wielechowski moved for the adoption of Amendment No. 12.                                                                
Senator McGuire objected.                                                                                                       
                                                                                                                                
The question being: "Shall Amendment No. 12 be adopted?" The roll                                                               
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 12                                                                                                                
                                                                                                                                
YEAS:  4   NAYS:  16   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Wielechowski                                                                                     
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson,                                                                       
Stedman, Stevens                                                                                                                
                                                                                                                                
and so, Amendment No. 12 failed.                                                                                                
                                                                                                                                
Senators Wielechowski, Ellis, French, Gardner offered Amendment                                                                 
No. 13:                                                                                                                         
                                                                                                                                
Page 1, line 4:                                                                                                                 
     Delete "rate"                                                                                                            
     Insert "rates"                                                                                                           
                                                                                                                                
Page 2, following line 11:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 3.  AS 29.60.850(b), as amended by sec. 2 of this Act, is                                                             
amended to read:                                                                                                                
          (b)  Each fiscal year, the legislature may appropriate [AN                                                            
     AMOUNT] 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). 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."                                                                 
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0723
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 5, following line 12:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 11. AS 43.55.011(e), as amended by sec. 10 of this Act, 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), (o), and                                                       
     (p) of this section, the tax is equal to the sum of [THE ANNUAL                                                        
     PRODUCTION TAX VALUE OF THE TAXABLE OIL AND                                                                                
     GAS AS CALCULATED UNDER AS 43.55.160(a) PRODUCED                                                                           
     DURING A CALENDAR YEAR]                                                                                                    
              (1)  the annual production tax value of the taxable oil                                                       
     and gas as calculated under AS 43.55.160(a)(1) [BEFORE                                                                 
     JANUARY 1, 2017,] multiplied by 25 [35] percent; and                                                                   
              (2)  the sum, over all months of the calendar year, of                                                        
     the tax amounts determined under (g) of this section [AFTER                                                            
     DECEMBER 31, 2016, MULTIPLIED BY 33 PERCENT]."                                                                             
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 5, following line 18:                                                                                                      
     Insert new bill sections to read:                                                                                          
   "* Sec. 13. AS 43.55.011(o), as amended by sec. 12 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.                                                       
   * Sec. 14. AS 43.55.011 is amended by adding a new subsection to                                                           
read:                                                                                                                           
          (q)  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                                                           

2013-03-20                     Senate Journal                      Page 0724
     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 8, line 21:                                                                                                                
     Delete "sec. 11"                                                                                                           
     Insert "sec. 15"                                                                                                           
                                                                                                                                
Page 11, following line 21:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 17. AS 43.55.020(a), as amended by secs. 15 and 16 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), (h), (i), (p), or (q) 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:                                                                                                     

2013-03-20                     Senate Journal                      Page 0725
                   (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(q)                                                                    
              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(q)                                                                    
              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                                                              
              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(q)                                                                    
              multiplied by the remainder obtained by subtracting 1/12                                                          

2013-03-20                     Senate Journal                      Page 0726
              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                                                               
          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;                                                              
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0727
              (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 8:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 19. AS 43.55.020(d), as amended by sec. 18 of this Act, is                                                            
amended 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) - (g) [AS 43.55.011(e)] 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) - (g) [AS 43.55.011(e)] 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) - (g)                                                      
     [AS 43.55.011(e)] produced by the producer from all leases and                                                             
     properties in the state during the calendar year."                                                                         
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 13, following line 10:                                                                                                     
     Insert a new bill section to read:                                                                                         

2013-03-20                     Senate Journal                      Page 0728
"* Sec. 22. AS 43.55.023(a), as amended by sec. 21 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 13, line 23:                                                                                                               
     Delete "sec. 16"                                                                                                           
     Insert "sec. 23"                                                                                                           
                                                                                                                                
Page 14, following line 3:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 25. AS 43.55.023(b), as amended by secs. 23 and 24 of this                                                            
Act, is amended to read:                                                                                                        

2013-03-20                     Senate Journal                      Page 0729
          (b)  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 TO EXPLORE FOR,                                                                                
     DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS                                                                                    
     LOCATED SOUTH OF 68 DEGREES NORTH LATITUDE,                                                                                
     AND 33 PERCENT OF A CARRIED-FORWARD ANNUAL                                                                                 
     LOSS BASED ON LEASE EXPENDITURES INCURRED                                                                                  
     AFTER DECEMBER 31, 2016, TO EXPLORE FOR, DEVELOP,                                                                          
     OR PRODUCE OIL OR GAS DEPOSITS LOCATED NORTH                                                                               
     OF 68 DEGREES NORTH LATITUDE]. 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 14, line 29:                                                                                                               
     Delete "sec. 18"                                                                                                           
     Insert "sec. 26"                                                                                                           
                                                                                                                                
Page 15, following line 15:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 28. AS 43.55.023(d), as amended by secs. 26 and 27 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                                                                  
     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                                                            

2013-03-20                     Senate Journal                      Page 0730
     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 15, following line 30:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 30. AS 43.55.023(g), as amended by sec. 29 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                                                              
     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(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)."                                                                    
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0731
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 16, following line 13:                                                                                                     
     Insert new bill sections to read:                                                                                          
"* Sec. 32. AS 43.55.023(n), as amended by sec. 31 of this Act, is                                                            
amended to read:                                                                                                                
          (n)  For the purposes of (l) and (p) 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.                                                                            
   * Sec. 33. 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, 2017, 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 17, following line 16:                                                                                                     
     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:                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0732
          (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 17, following line 26:                                                                                                     
     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:                                                                                                                
          (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."                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0733
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 18, following line 8:                                                                                                      
     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 21, following line 15:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 44. AS 43.55.160(a), as amended by secs. 42 and 43 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                                                                                                                         
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0734
                   (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(q), 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                                                      
          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                                                            

2013-03-20                     Senate Journal                      Page 0735
          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                                                                
          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 22, following line 4:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 46. AS 43.55.160(e), as amended by sec. 45 of this Act, is                                                            
amended to read:                                                                                                                
          (e)  Any adjusted lease expenditures under AS 43.55.165 and                                                           
     43.55.170 that would otherwise be deductible by a producer in a                                                            
     calendar year but whose deduction would cause an annual                                                                    

2013-03-20                     Senate Journal                      Page 0736
     production tax value calculated under (a)(1) [(a)] of this section of                                                  
     taxable oil or gas produced during the calendar year to be less than                                                       
     zero may be used to establish a carried-forward annual loss under                                                          
     AS 43.55.023(b). However, the department shall provide by                                                                  
     regulation a method to ensure that, for a period for which a                                                               
     producer's tax liability is limited by AS 43.55.011(j), (k), (o), or                                                       
     (p), any adjusted lease expenditures under AS 43.55.165 and                                                                
     43.55.170 that would otherwise be deductible by a producer for                                                             
     that period but whose deduction would cause a production tax                                                               
     value calculated under (a)(1)(C), (D), (E), or (F) [(a)(3), (4), (5),                                                  
     OR (6)] of this section to be less than zero are accounted for as                                                          
     though the adjusted lease expenditures had first been used as                                                              
     deductions in calculating the production tax values of oil or gas                                                          
     subject to any of the limitations under AS 43.55.011(j), (k), (o), or                                                      
     (p) that have positive production tax values so as to reduce the tax                                                       
     liability calculated without regard to the limitation to the                                                               
     maximum amount provided for under the applicable provision of                                                              
     AS 43.55.011(j), (k), (o), or (p). Only the amount of those                                                                
     adjusted lease expenditures remaining after the accounting                                                                 
     provided for under this subsection may be used to establish a                                                              
     carried-forward annual loss under AS 43.55.023(b). In this                                                                 
     subsection, "producer" includes "explorer.""                                                                               
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 22, following line 23:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 48.  AS 43.55.160 is amended by adding a new subsection to                                                            
read:                                                                                                                           
          (g) 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."                                                             
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
                                                                                                                                
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0737
Page 25, following line 30:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 55. AS 43.55.024(i), 43.55.030(g), and 43.55.160(f) are                                                               
repealed January 1, 2018."                                                                                                      
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 26, line 4:                                                                                                                
     Delete "Sections 9, 12, 13, and 28 - 30"                                                                                   
     Insert "Sections 10, 16, 18, 43, 45, and 47"                                                                               
                                                                                                                                
Page 26, line 6:                                                                                                                
     Delete "Sections 10 and 27"                                                                                                
     Insert "Sections 12 and 42"                                                                                                
                                                                                                                                
Page 26, line 8:                                                                                                                
     Delete "Sections 15 and 18 - 21"                                                                                           
     Insert "Sections 21 and 26, 27, 29, and 31"                                                                                
     Delete "sec. 15"                                                                                                           
     Insert "sec. 21"                                                                                                           
                                                                                                                                
Page 26, line 10:                                                                                                               
     Delete "Sections 16, 19, and 24"                                                                                           
     Insert "Sections 23, 27, and 36"                                                                                           
                                                                                                                                
Page 26, line 12:                                                                                                               
     Delete "Section 17"                                                                                                        
     Insert "Section 24"                                                                                                        
                                                                                                                                
Page 26, following line 12:                                                                                                     
     Insert new subsections to read:                                                                                            
     "(f)  Sections 11, 17, 19, 44, 46, and 48 of this Act apply to oil and                                                     
gas produced after December 31, 2017.                                                                                           
     (g)  Sections 25, 28, and 37 of this Act apply to expenditures                                                             
incurred after December 31, 2017."                                                                                              
                                                                                                                                
Page 26, line 22:                                                                                                               
     Delete "sec. 34"                                                                                                           
     Insert "sec. 52"                                                                                                           
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0738
Page 26, line 30:                                                                                                               
     Delete "Sections 10, 18, 20, 21, 24, 27, and 35"                                                                           
     Insert "Sections 12, 26, 29, 31, 36, 42, and 53"                                                                           
                                                                                                                                
Page 26, line 31:                                                                                                               
     Delete "sec. 15"                                                                                                           
     Insert "sec. 21"                                                                                                           
                                                                                                                                
Page 26, following line 31:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 61. The uncodified law of the State of Alaska is amended by                                                           
adding a new section to read:                                                                                                   
     CONDITIONAL EFFECT. Sections 3, 11, 13, 14, 17, 19, 22, 25,                                                                
30, 32, 33, 37, 39, 41, 44, 46, 48, 57(f), and 57(g) of this Act take                                                           
effect only if the three-year average volume of oil production for                                                              
calendar years 2014, 2015, and 2016 does not exceed by more than 10                                                             
percent the volume of oil produced for calendar year 2012. The                                                                  
commissioner of natural resources shall notify the lieutenant governor                                                          
and the revisor of statutes before July 1, 2017, if the three-year                                                              
average volume of oil production for calendar years 2014, 2015, and                                                             
2016 is more than 10 percent greater than the volume of oil produced                                                            
during calendar year 2012."                                                                                                     
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 27, line 1:                                                                                                                
     Delete "12 - 14, 16, 19, 22, 23, 28 - 33, and 36"                                                                          
     Insert "16, 18, 20, 23, 26, 34, 35, 43, 45, 47, 49 - 51, and 54"                                                           
                                                                                                                                
Page 27, line 3:                                                                                                                
     Delete "Section 17"                                                                                                        
     Insert "Section 24"                                                                                                        
                                                                                                                                
Page 27, following line 3:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 64.  If secs. 3, 11, 13, 14, 17, 19, 22, 25, 30, 32, 33, 37, 39,                                                      
41, 44, 46, 48, 57(f), and 57(g) of this Act take effect under sec. 61 of                                                       
this Act, secs. 3, 11, 13, 14, 17, 19, 22, 25, 30, 32, 33, 37, 39, 41, 44,                                                      
46, 48, 57(f), and 57(g) of this Act take effect January 1, 2018."                                                              
                                                                                                                                

2013-03-20                     Senate Journal                      Page 0739
Renumber the following bill section accordingly.                                                                                
                                                                                                                                
Page 27, line 4:                                                                                                                
 Delete "secs. 42 and 43"                                                                                                       
 Insert "secs. 62 - 64"                                                                                                         
                                                                                                                                
Senator Wielechowski moved for the adoption of Amendment No. 13.                                                                
Senator Coghill objected.                                                                                                       
                                                                                                                                
The question being: "Shall Amendment No. 13 be adopted?" The roll                                                               
was taken with the following result:                                                                                            
                                                                                                                                
CSSB 21(FIN) am                                                                                                                 
Second Reading                                                                                                                  
Amendment No. 13                                                                                                                
                                                                                                                                
YEAS:  4   NAYS:  16   EXCUSED:  0   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Ellis, French, Gardner, Wielechowski                                                                                     
                                                                                                                                
Nays:  Bishop, Coghill, Dunleavy, Dyson, Egan, Fairclough, Giessel,                                                             
Hoffman, Huggins, Kelly, McGuire, Meyer, Micciche, Olson,                                                                       
Stedman, Stevens                                                                                                                
                                                                                                                                
and so, Amendment No. 13 failed.                                                                                                
                                                                                                                                
CS FOR SENATE BILL NO. 21(FIN) am was automatically in third                                                                    
reading.