Legislature(2015 - 2016)

2016-05-13 House Journal

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2016-05-13                     House Journal                      Page 2813
                                                                                                                                
                               HOUSE JOURNAL                                                                                 
                                                                                                                                
                         ALASKA STATE LEGISLATURE                                                                            
                                                                                                                                
                         TWENTY-NINTH LEGISLATURE                                                                            
                                                                                                                                
                              SECOND SESSION                                                                                 
                                                                                                                                
                                                                                                                                
Juneau, Alaska                     Friday                   May 13, 2016                                                      
                                                                                                                                
                         One Hundred Sixteenth Day                                                                         
                                                                                                                                
                                                                                                                                
Pursuant to adjournment the House was called to order by Speaker                                                                
Chenault at 10:42 a.m. in the Terry Miller Legislative Office Building                                                          
gymnasium.                                                                                                                      
                                                                                                                                
Roll call showed 37 members present.  Representatives Claman,                                                                   
Hawker, and Reinbold had been excused from a call of the House                                                                  
today.                                                                                                                          
                                                                                                                                
The invocation was offered by the Chaplain, Representative Tuck.                                                                
Representative Wilson moved and asked unanimous consent that the                                                                
invocation be spread on the journal.  There being no objection, it was                                                          
so ordered.                                                                                                                     
                                                                                                                                
     With the deepest respect for the religious beliefs of all                                                                  
     Alaskans, I offer the following prayer:                                                                                    
                                                                                                                                
     Dear Father God,                                                                                                           
                                                                                                                                
     We thank you for another sunny morning in Juneau.  We                                                                      
     thank you for our beautiful state and the provisions you have                                                              
     given us to allow us the honor of serving the wonderful                                                                    
     people of Alaska.  As we come together to solve the                                                                        
     challenges before us, we ask for wisdom, knowledge, and                                                                    
     creativity.  Help us keep an open mind to any new ideas, no                                                                
     matter who or where they come from.  We ask for good favor                                                                 
     with one another and to remain humble.  We are not perfect,                                                                
     but being created in your image we desire to become more                                                                   

2016-05-13                     House Journal                      Page 2814
     perfected.  Please continue to bless our lives, our families, and                                                          
     the greater people of Alaska with good health and prosperity.                                                              
     With all those who may agree, we pray this in your wonderful                                                               
     name.  Amen.                                                                                                               
                                                                                                                                
The Pledge of Allegiance was led by Representative Lynn.                                                                        
                                                                                                                                
                       CERTIFICATION OF THE JOURNAL                                                                          
                                                                                                                                
Representative Millett moved and asked unanimous consent that the                                                               
journal for the 115th legislative day be approved as certified by the                                                           
Chief Clerk.  There being no objection, it was so ordered.                                                                      
                                                                                                                                
The Speaker stated that, without objection, the House would recess                                                              
until 2:00 p.m.; and so, the House recessed at 10:49 a.m.                                                                       
                                                                                                                                
                               AFTER RECESS                                                                                  
                                                                                                                                
The Speaker called the House back to order at 3:01 p.m.                                                                         
                                                                                                                                
The House reverted to:                                                                                                          
                                                                                                                                
                         MESSAGES FROM THE SENATE                                                                            
                                                                                                                                
HCR 32                                                                                                                        
A message dated May 13, 2016, was read stating the Senate passed:                                                               
                                                                                                                                
     HOUSE CONCURRENT RESOLUTION NO. 32                                                                                         
     Suspending Rules 24(c), 35, 41(b), and 42(e), Uniform Rules of                                                             
     the Alaska State Legislature, concerning Senate Bill No. 91,                                                               
     relating to criminal law and procedure; relating to controlled                                                             
     substances; relating to immunity from prosecution for the crime of                                                         
     prostitution; relating to probation; relating to sentencing;                                                               
     establishing a pretrial services program with pretrial services                                                            
     officers in the Department of Corrections; relating to the                                                                 
     publication of suspended entries of judgment on a publicly                                                                 
     available Internet website; relating to permanent fund dividends;                                                          
     relating to electronic monitoring; relating to penalties for                                                               
     violations of municipal ordinances; relating to parole; relating to                                                        
     correctional restitution centers; relating to community work                                                               

2016-05-13                     House Journal                      Page 2815
     service; relating to revocation, termination, suspension,                                                                  
     cancellation, or restoration of a driver's license; relating to the                                                        
     excise tax on marijuana; establishing the recidivism reduction                                                             
     fund; relating to the Alaska Criminal Justice Commission; relating                                                         
     to the disqualification of persons convicted of specified drug                                                             
     offenses from participation in the food stamp and temporary                                                                
     assistance programs; relating to the duties of the commissioner of                                                         
     corrections; and amending Rules 32, 32.1, 38, 41, and 43, Alaska                                                           
     Rules of Criminal Procedure, and repealing Rules 41(d) and (e),                                                            
     Alaska Rules of Criminal Procedure.                                                                                        
                                                                                                                                
HCR 32 was referred to the Chief Clerk for enrollment.                                                                          
                                                                                                                                
SB 91                                                                                                                         
A message dated May 13, 2016, was read stating the Senate concurred                                                             
in the House amendment to:                                                                                                      
                                                                                                                                
     CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO.                                                                              
     91(FIN) am                                                                                                                 
     "An Act relating to criminal law and procedure; relating to                                                                
     controlled substances; relating to immunity from prosecution for                                                           
     the crime of prostitution; relating to probation; relating to                                                              
     sentencing; establishing a pretrial services program with pretrial                                                         
     services officers in the Department of Corrections; relating to the                                                        
     publication of suspended entries of judgment on a publicly                                                                 
     available Internet website; relating to permanent fund dividends;                                                          
     relating to electronic monitoring; relating to penalties for                                                               
     violations of municipal ordinances; relating to parole; relating to                                                        
     correctional restitution centers; relating to community work                                                               
     service; relating to revocation, termination, suspension,                                                                  
     cancellation, or restoration of a driver's license; relating to the                                                        
     excise tax on marijuana; establishing the recidivism reduction                                                             
     fund; relating to the Alaska Criminal Justice Commission; relating                                                         
     to the disqualification of persons convicted of specified drug                                                             
     offenses from participation in the food stamp and temporary                                                                
     assistance programs; relating to the duties of the commissioner of                                                         
     corrections; amending Rules 32, 32.1, 38, 41, and 43, Alaska                                                               
     Rules of Criminal Procedure, and repealing Rules 41(d) and (e),                                                            
     Alaska Rules of Criminal Procedure; and providing for an                                                                   
     effective date."                                                                                                           

2016-05-13                     House Journal                      Page 2816
thus adopting:                                                                                                                  
                                                                                                                                
     HOUSE CS FOR CS FOR SS FOR SENATE BILL NO. 91(FIN)                                                                         
     am H                                                                                                                       
     "An Act relating to civil in rem forfeiture actions; relating to                                                           
     criminal law and procedure; relating to controlled substances;                                                             
     relating to victims of criminal offenses; relating to probation;                                                           
     relating to sentencing; relating to treatment program credit for                                                           
     time spent toward service of a sentence of imprisonment; relating                                                          
     to the Violent Crimes Compensation Board; establishing a pretrial                                                          
     services program with pretrial services officers in the Department                                                         
     of Corrections; relating to permanent fund dividends; relating to                                                          
     electronic monitoring; relating to penalties for violations of                                                             
     municipal ordinances; relating to parole; relating to correctional                                                         
     restitution centers; relating to community work service; relating to                                                       
     revocation, termination, suspension, cancellation, or restoration of                                                       
     a driver's license; relating to identification cards and driver's                                                          
     licenses for parolees; relating to the disqualification of persons                                                         
     convicted of certain felony drug offenses from participation in the                                                        
     food stamp and temporary assistance programs; relating to the                                                              
     duties of the commissioner of corrections; amending Rules 32,                                                              
     32.1, 38, and 43, Alaska Rules of Criminal Procedure; and                                                                  
     providing for an effective date."                                                                                          
                                                                                                                                
     (HCR 32 - title change resolution)                                                                                         
                                                                                                                                
The House advanced to:                                                                                                          
                                                                                                                                
                    CONSIDERATION OF THE DAILY CALENDAR                                                                      
                                                                                                                                
                       HOUSE BILLS IN THIRD READING                                                                          
                                                                                                                                
HB 247                                                                                                                        
The following, which was held in third reading from the May 12,                                                                 
2016, calendar (page 2808), was before the House in third reading:                                                              
                                                                                                                                
     2d CS FOR HOUSE BILL NO. 247(RLS)                                                                                          
     "An Act relating to the powers and duties of the Alaska Oil and                                                            
     Gas Conservation Commission; relating to exploration incentive                                                             
     credits; relating to confidential information status and public                                                            
     record status of information in the possession of the Department                                                           
     of Revenue; relating to interest applicable to delinquent tax;                                                             

2016-05-13                     House Journal                      Page 2817
     relating to the oil and gas production tax rate for certain oil                                                            
     exempt from taxation or constituting a landowner's royalty                                                                 
     interest; relating to oil and gas production tax credits; relating to                                                      
     tax credit certificates; relating to the calculation of the production                                                     
     tax value of oil and gas; relating to refunds for the gas storage                                                          
     facility tax credit, the liquefied natural gas storage facility tax                                                        
     credit, and the qualified in-state oil refinery infrastructure                                                             
     expenditures tax credit; relating to the purchase of tax credit                                                            
     certificates from the oil and gas tax credit fund; relating to lease                                                       
     expenditures; relating to oil and gas lease expenditures and                                                               
     production tax credits for municipal entities; requiring a bond or                                                         
     cash deposit with a business license application for an oil or gas                                                         
     business; establishing a legislative working group to study the                                                            
     fiscal regime and tax structure and rates for oil and gas produced                                                         
     south of 68 degrees North latitude; and providing for an effective                                                         
     date."                                                                                                                     
                                                                                                                                
Representative Seaton moved and asked unanimous consent that 2d                                                                 
CSHB 247(RLS) be returned to second reading for the specific                                                                    
purpose of considering Amendment No. 20.  There being no objection,                                                             
it was so ordered.                                                                                                              
                                                                                                                                
The Speaker stated that, without objection, 2d CSHB 247(RLS),                                                                   
would be returned to second reading for all amendments.                                                                         
                                                                                                                                
Amendment No. 20 was offered by Representatives Seaton and                                                                      
Wilson:                                                                                                                         
                                                                                                                                
Page 1, line 1, through page 2, line 4 (title amendment):                                                                       
     Delete all material and insert:                                                                                            
""An Act amending the powers of the board of trustees of the                                                                  
Alaska Retirement Management Board to authorize purchase and                                                                  
sale of transferable tax credit certificates issued in conjunction                                                            
with the production tax on oil and gas; relating to interest                                                                  
applicable to delinquent tax; relating to the oil and gas production                                                          
tax, tax payments, and credits; relating to exploration incentive                                                             
credits; relating to refunds for the gas storage facility tax credit,                                                         
the liquefied natural gas storage facility tax credit, and the                                                                
qualified in-state oil refinery infrastructure expenditures tax                                                               
credit; relating to the confidential information status and public                                                            
record status of information in the possession of the Department                                                              

2016-05-13                     House Journal                      Page 2818
of Revenue; relating to oil and gas lease expenditures and                                                                    
production tax credits for municipal entities; requiring a bond or                                                            
cash deposit with a business license application for an oil or gas                                                            
business; establishing a legislative working group to study the                                                               
fiscal regime and tax structure and rates for oil and gas produced                                                            
south of 68 degrees North latitude; and providing for an effective                                                            
date.""                                                                                                                       
                                                                                                                                
Page 2, lines 6 - 11:                                                                                                           
     Delete all material and insert:                                                                                            
"* Section 1. AS 37.10.220(b) is amended to read:                                                                             
         (b)  The board may                                                                                                     
              (1)  employ outside investment advisors to review                                                                 
     investment policies;                                                                                                       
              (2)  enter into an agreement with the fiduciary of another                                                        
     state fund in order to assume the management and investment of                                                             
     those assets;                                                                                                              
              (3)  contract for other services necessary to execute the                                                         
     board's powers and duties;                                                                                                 
              (4)  enter into confidentiality agreements that would                                                             
     exempt records from AS 40.25.110 and 40.25.120 if the records                                                              
     contain information that could affect the value of investment by                                                           
     the board or that could impair the ability of the board to acquire,                                                        
     maintain, or dispose of investments;                                                                                   
              (5)  purchase, in whole or in part, transferable tax                                                          
     credit certificates issued under AS 43.55.023 and production                                                           
     tax credit certificates issued under AS 43.55.025 for 60 percent                                                       
     of the face value of a transferable tax credit certificate or                                                          
     production tax credit certificate, and sell transferable tax                                                           
     credit certificates and production tax credit certificates to the                                                      
     Department of Revenue under AS 43.55.023(r) and                                                                        
     43.55.025(q) for a cash refund of the full face value of the                                                           
     certificate; under this paragraph, the board                                                                           
                  (A)  may                                                                                                  
                       (i)  on the written application of a person to                                                       
              whom a transferable tax credit certificate has been                                                           
              issued under AS 43.55.023(d) or former                                                                        
              AS 43.55.023(m) or to whom a production tax credit                                                            
              certificate has been issued under AS 43.55.025(f),                                                            
              purchase a transferable tax credit certificate or a                                                           

2016-05-13                     House Journal                      Page 2819
              production tax credit certificate; and                                                                        
                       (ii)  sell a transferable tax credit certificate or                                                  
              production tax credit certificate only if the                                                                 
              commissioner of revenue determines that economic                                                              
              conditions are acceptable for the state to purchase and                                                       
              pay for the credit; and                                                                                       
                  (B)  shall apply the proceeds from a sale made                                                            
         under this paragraph to defray the unfunded pension                                                                
         liabilities of the systems for which the board has                                                                 
         responsibility."                                                                                                   
                                                                                                                                
Page 4, line 2, through page 36, line 19:                                                                                       
     Delete all material and insert:                                                                                            
"* Sec. 8. AS 43.05.225 is amended to read:                                                                                   
           Sec. 43.05.225. Interest. Unless otherwise provided,                                                              
              (1)  a delinquent tax under this title,                                                                           
                  (A)  before January 1, 2014, bears interest in each                                                           
         calendar quarter at the rate of five percentage points above the                                                       
         annual rate charged member banks for advances by the 12th                                                              
         Federal Reserve District as of the first day of that calendar                                                          
         quarter, or at the annual rate of 11 percent, whichever is                                                             
         greater, compounded quarterly as of the last day of that                                                               
         quarter; [OR]                                                                                                          
                  (B)  on and after January 1, 2014, and before                                                             
         January 1, 2017, bears interest in each calendar quarter at the                                                    
         rate of three percentage points above the annual rate charged                                                          
         member banks for advances by the 12th Federal Reserve                                                                  
         District as of the first day of that calendar quarter;                                                             
                  (C)  on and after January 1, 2017, bears interest                                                         
                       (i)  for the first four years after a tax becomes                                                    
              delinquent, in each calendar quarter at the rate of five                                                      
              percentage points above the annual rate charged                                                               
              member banks for advances by the 12th Federal                                                                 
              Reserve District as of the first day of that calendar                                                         
              quarter, compounded quarterly as of the last day of                                                           
              that quarter; and                                                                                             
                       (ii)  after the first four years after a tax                                                         
              becomes delinquent, in each calendar quarter at a rate                                                        
              of five percentage points above the annual rate                                                               
              charged member banks for advances by the 12th                                                                 

2016-05-13                     House Journal                      Page 2820
              Federal Reserve District as of the first day of that                                                          
              calendar quarter;                                                                                             
              (2)  the interest rate is 12 percent a year for                                                                   
                  (A)  delinquent fees payable under AS 05.15.095(c);                                                           
         and                                                                                                                    
                  (B)  unclaimed property that is not timely paid or                                                            
         delivered, as allowed by AS 34.45.470(a).                                                                              
   * Sec. 9. AS 43.05.230 is amended by adding a new subsection to                                                            
read:                                                                                                                           
         (l)  For tax credit certificates purchased by the department in                                                        
     the preceding calendar year under AS 43.55.028, the department                                                             
     shall make the following information public by April 30 of each                                                            
     year:                                                                                                                      
              (1)  the name of each person from whom the department                                                             
     purchased a transferable tax credit certificate; and                                                                       
              (2)  the aggregate amount of the tax credit certificates                                                          
     purchased from the person in the preceding calendar year.                                                                  
   * Sec. 10. AS 43.20.046(e) is amended to read:                                                                             
         (e)  Subject to the requirements in AS 43.55.028(j), the                                                           
     [THE] department may use available money in the oil and gas tax                                                            
     credit fund established in AS 43.55.028 to make the refund                                                                 
     applied for under (d) of this section in whole or in part if the                                                           
     department finds that, [(1) THE CLAIMANT DOES NOT HAVE                                                                 
     AN OUTSTANDING LIABILITY TO THE STATE FOR                                                                                  
     UNPAID DELINQUENT TAXES UNDER THIS TITLE; AND                                                                              
     (2)] after application of all available tax credits, the claimant's                                                        
     total tax liability under this chapter for the calendar year in which                                                      
     the claim is made is zero. [IN THIS SUBSECTION, "UNPAID                                                                    
     DELINQUENT TAX" MEANS AN AMOUNT OF TAX FOR                                                                                 
     WHICH THE DEPARTMENT HAS ISSUED AN                                                                                         
     ASSESSMENT THAT HAS NOT BEEN PAID AND, IF                                                                                  
     CONTESTED, HAS NOT BEEN FINALLY RESOLVED IN                                                                                
     THE TAXPAYER'S FAVOR.]                                                                                                     
   * Sec. 11. AS 43.20.047(e) is amended to read:                                                                             
         (e)  Subject to the requirements in AS 43.55.028(j), the                                                           
     [THE] department may use money available in the oil and gas tax                                                            
     credit fund established in AS 43.55.028 to make a refund or                                                                
     payment under (d) of this section in whole or in part if the                                                               
     department finds that, [(1) THE CLAIMANT DOES NOT HAVE                                                                 
     AN OUTSTANDING LIABILITY TO THE STATE FOR                                                                                  

2016-05-13                     House Journal                      Page 2821
     UNPAID DELINQUENT TAXES UNDER THIS TITLE; AND                                                                              
     (2)] after application of all available tax credits, the claimant's                                                        
     total tax liability under this chapter for the calendar year in which                                                      
     the claim is made is zero. [IN THIS SUBSECTION, "UNPAID                                                                    
     DELINQUENT TAX" MEANS AN AMOUNT OF TAX FOR                                                                                 
     WHICH THE DEPARTMENT HAS ISSUED AN                                                                                         
     ASSESSMENT THAT HAS NOT BEEN PAID AND, IF                                                                                  
     CONTESTED, HAS NOT BEEN FINALLY RESOLVED IN                                                                                
     THE TAXPAYER'S FAVOR.]                                                                                                     
   * Sec. 12. AS 43.20.053(e) is amended to read:                                                                             
         (e)  Subject to the requirements in AS 43.55.028(j), the                                                           
     [THE] department may use money available in the oil and gas tax                                                            
     credit fund established in AS 43.55.028 to make a refund or                                                                
     payment under (d) of this section in whole or in part if the                                                               
     department finds that,                                                                                                 
              [(1)  THE CLAIMANT DOES NOT HAVE AN                                                                               
     OUTSTANDING LIABILITY TO THE STATE FOR UNPAID                                                                              
     DELINQUENT TAXES UNDER THIS TITLE; AND                                                                                     
              (2)]  after application of all available tax credits, the                                                         
     claimant's total tax liability under this chapter for the calendar                                                         
     year in which the claim is made is zero.                                                                                   
   * Sec. 13. 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 or for which a tax is levied by AS 43.55.014. Except as                                                           
     otherwise provided under (f) [, (j), (k), (o),] and (p) of this section,                                                   
     for oil and gas produced                                                                                                   
              (1)  before January 1, 2014, the tax is equal to the sum of                                                       
                  (A)  the annual production tax value of the taxable oil                                                       
         and gas as calculated under AS 43.55.160(a)(1) multiplied by                                                           
         25 percent; and                                                                                                        
                  (B)  the sum, over all months of the calendar year, of                                                        
           the tax amounts determined under (g) of this section;                                                               
              (2)  on and after January 1, 2014, and before January 1,                                                          
     2022, the tax is equal to the annual production tax value of the                                                           
     taxable oil and gas as calculated under AS 43.55.160(a)(1)                                                                 
     multiplied by 35 percent;                                                                                                  
              (3)  on and after January 1, 2022, the tax for                                                                   

2016-05-13                     House Journal                      Page 2822
                  (A)  oil is equal to the annual production tax value of                                                       
         the taxable oil as calculated under AS 43.55.160(h) multiplied                                                         
         by 35 percent;                                                                                                         
                  (B)  gas is equal to 13 percent of the gross value at                                                         
         the point of production of the taxable gas; if the gross value at                                                      
         the point of production of gas produced from a lease or                                                                
         property is less than zero, that gross value at the point of                                                           
         production is considered zero for purposes of this                                                                     
         subparagraph.                                                                                                          
   * Sec. 14. AS 43.55.011(f) is amended to read:                                                                             
         (f)  The levy of tax under (e) of this section for                                                                     
              (1)  oil and gas produced before January 1, 2017 [2022],                                                      
     from leases or properties that include land north of 68 degrees                                                            
     North latitude, other than gas subject to (o) of this section, may                                                         
     not be less than                                                                                                           
                  (A)  four percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is more than                                                         
         $25;                                                                                                                   
                  (B)  three percent of the gross value at the point of                                                         
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $20                                                          
         but not over $25;                                                                                                      
                  (C)  two percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over                                                              
         $17.50 but not over $20;                                                                                               
                  (D)  one percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $15                                                          
         but not over $17.50; or                                                                                                
                  (E)  zero percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is $15 or                                                            
         less; [AND]                                                                                                            

2016-05-13                     House Journal                      Page 2823
              (2)  oil and gas produced after December 31, 2016, and                                                        
     before January 1, 2022, from leases or properties that include                                                         
     land north of 68 degrees North latitude, other than gas subject                                                        
     to (o) of this section, may not be less than                                                                           
                  (A)  five percent of the gross value at the point of                                                      
         production when the average price per barrel for Alaska                                                            
         North Slope crude oil for sale on the United States West                                                           
         Coast during the calendar year for which the tax is due is                                                         
         more than $70;                                                                                                     
                  (B)  four percent of the gross value at the point of                                                      
         production when the average price per barrel for Alaska                                                            
         North Slope crude oil for sale on the United States West                                                           
         Coast during the calendar year for which the tax is due is                                                         
         over $25 but not over $70;                                                                                         
                  (C)  three percent of the gross value at the point of                                                     
         production when the average price per barrel for Alaska                                                            
         North Slope crude oil for sale on the United States West                                                           
         Coast during the calendar year for which the tax is due is                                                         
         over $20 but not over $25;                                                                                         
                  (D)  two percent of the gross value at the point of                                                       
         production when the average price per barrel for Alaska                                                            
         North Slope crude oil for sale on the United States West                                                           
         Coast during the calendar year for which the tax is due is                                                         
         over $17.50 but not over $20;                                                                                      
                  (E)  one percent of the gross value at the point of                                                       
         production when the average price per barrel for Alaska                                                            
         North Slope crude oil for sale on the United States West                                                           
         Coast during the calendar year for which the tax is due is                                                         
         over $15 but not over $17.50; or                                                                                   
                  (F)  zero percent of the gross value at the point of                                                      
         production when the average price per barrel for Alaska                                                            
         North Slope crude oil for sale on the United States West                                                           
         Coast during the calendar year for which the tax is due is                                                         
         $15 or less; and                                                                                                   
              (3)  oil produced on and after January 1, 2022, from                                                          
     leases or properties that include land north of 68 degrees North                                                           
     latitude, may not be less than                                                                                             
                  (A)  five percent of the gross value at the point of                                                      
         production when the average price per barrel for Alaska                                                            
         North Slope crude oil for sale on the United States West                                                           

2016-05-13                     House Journal                      Page 2824
         Coast during the calendar year for which the tax is due is                                                         
         more than $70;                                                                                                     
                  (B)  four percent of the gross value at the point of                                                      
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over                                                          
         [MORE THAN] $25 but not over $70;                                                                                  
                  (C) [(B)]  three percent of the gross value at the point                                                  
         of production when the average price per barrel for Alaska                                                             
         North Slope crude oil for sale on the United States West Coast                                                         
         during the calendar year for which the tax is due is over $20                                                          
         but not over $25;                                                                                                      
                  (D) [(C)]  two percent of the gross value at the point                                                    
         of production when the average price per barrel for Alaska                                                             
         North Slope crude oil for sale on the United States West Coast                                                         
         during the calendar year for which the tax is due is over                                                              
         $17.50 but not over $20;                                                                                               
                  (E) [(D)]  one percent of the gross value at the point                                                    
         of production when the average price per barrel for Alaska                                                             
         North Slope crude oil for sale on the United States West Coast                                                         
         during the calendar year for which the tax is due is over $15                                                          
         but not over $17.50; or                                                                                                
                  (F) [(E)]  zero percent of the gross value at the point                                                   
         of production when the average price per barrel for Alaska                                                             
         North Slope crude oil for sale on the United States West Coast                                                         
         during the calendar year for which the tax is due is $15 or                                                            
         less.                                                                                                                  
   * Sec. 15. AS 43.55.011(f), as amended by sec. 14 of this Act, is                                                          
amended to read:                                                                                                                
         (f)  The levy of tax under (e) of this section for                                                                     
              (1)  oil and gas produced before January 1, 2017, from                                                            
     leases or properties that include land north of 68 degrees North                                                           
     latitude [, OTHER THAN GAS SUBJECT TO (o) OF THIS                                                                          
     SECTION,] may not be less than                                                                                             
                  (A)  four percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is more than                                                         
         $25;                                                                                                                   
                  (B)  three percent of the gross value at the point of                                                         

2016-05-13                     House Journal                      Page 2825
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $20                                                          
         but not over $25;                                                                                                      
                  (C)  two percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over                                                              
         $17.50 but not over $20;                                                                                               
                  (D)  one percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $15                                                          
         but not over $17.50; or                                                                                                
                  (E)  zero percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is $15 or                                                            
         less;                                                                                                                  
              (2)  oil and gas produced after December 31, 2016, and                                                            
     before January 1, 2022, from leases or properties that include land                                                        
     north of 68 degrees North latitude, other than gas subject to (o) of                                                       
     this section, may not be less than                                                                                         
                  (A)  five percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is more than                                                         
         $70;                                                                                                                   
                  (B)  four percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $25                                                          
         but not over $70;                                                                                                      
                  (C)  three percent of the gross value at the point of                                                         
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $20                                                          
         but not over $25;                                                                                                      
                  (D)  two percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          

2016-05-13                     House Journal                      Page 2826
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over                                                              
         $17.50 but not over $20;                                                                                               
                  (E)  one percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $15                                                          
         but not over $17.50; or                                                                                                
                  (F)  zero percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is $15 or                                                            
         less; and                                                                                                              
              (3)oil produced on and after January 1, 2022, from                                                                
     leases or properties that include land north of 68 degrees North                                                           
     latitude, may not be less than                                                                                             
                  (A)  five percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is more than                                                         
         $70;                                                                                                                   
                  (B)four percent of the gross value at the point of                                                            
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $25                                                          
         but not over $70;                                                                                                      
                  (C)  three percent of the gross value at the point of                                                         
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $20                                                          
         but not over $25;                                                                                                      
                  (D)  two percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over                                                              
         $17.50 but not over $20;                                                                                               
                  (E)  one percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $15                                                          

2016-05-13                     House Journal                      Page 2827
         but not over $17.50; or                                                                                                
                  (F)  zero percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is $15 or                                                            
         less.                                                                                                                  
   * Sec. 16. AS 43.55.011(m) is amended to read:                                                                             
         (m)  Notwithstanding any contrary provision of                                                                         
     [AS 38.05.180(i), AS 41.09.010,] AS 43.55.024 [,] or 43.55.025,                                                            
     the department shall provide by regulation a method to ensure                                                              
     that, for a calendar year for which a producer's tax liability is                                                          
     limited by (j), (k), or (o) of this section, tax credits based on a                                                        
     lease expenditure incurred before January 1, 2011, that are                                                                
     otherwise available under [AS 38.05.180(i), AS 41.09.010,]                                                                 
     AS 43.55.024 [,] or 43.55.025 and allocated to gas subject to the                                                          
     limitations in (j), (k), and (o) of this section are accounted for as                                                      
     though the credits had been applied first against a tax liability                                                          
     calculated without regard to the limitations under (j), (k), and (o)                                                       
     of this section so as to reduce the tax liability to the maximum                                                           
     amount provided for under (j) or (o) of this section for the                                                               
     production of gas or (k) of this section for the production of oil.                                                        
     The regulation must provide for a reasonable method to allocate                                                            
     tax credits to gas subject to (j) and (o) of this section. Only the                                                        
     amount of a tax credit remaining after the accounting provided for                                                         
     under this subsection may be used for a later calendar year,                                                               
     transferred to another person, or applied against a tax levied on the                                                      
     production of oil or gas not subject to (j), (k), or (o) of this section                                                   
     to the extent otherwise allowed.                                                                                           
   * Sec. 17. AS 43.55.020(a) 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)  for oil and gas produced before January 1, 2014, 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                                                           

2016-05-13                     House Journal                      Page 2828
     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 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                                                          
              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                                                          

2016-05-13                     House Journal                      Page 2829
              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)  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 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 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                                                         

2016-05-13                     House Journal                      Page 2830
         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;                                                          
              (5)  for oil and gas produced on and after January 1, 2014,                                                       
     and before January 1, 2022, 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 (6) and (10) 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)  35 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;                                                                            
                  (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                                                            

2016-05-13                     House Journal                      Page 2831
              from the leases or properties during the month for which                                                          
              the installment payment is calculated; or                                                                         
                       (iii)  35 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, except that,                                                         
              for the purposes of this calculation, a reduction from the                                                        
              gross value at the point of production may apply for oil                                                          
              and gas subject to AS 43.55.160(f) or (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)  35 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)  35 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; 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;                                                              
              (6)  an amount calculated under (5)(C) of this subsection                                                         

2016-05-13                     House Journal                      Page 2832
     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;                                                                   
              (7)  for oil and gas produced on or after January 1, 2022,                                                        
     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 provided in (10) 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 produced from leases or properties that                                                          
         include land north of 68 degrees North latitude, 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 produced from the                                                           
              leases or properties during the month for which the                                                               
              installment payment is calculated; or                                                                             
                       (iii)  35 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 under AS 43.55.160(h)(1) from the gross value at                                                          
              the point of production of the oil produced from those                                                            
              leases or properties during the month for which the                                                               
              installment payment is calculated, except that, for the                                                           
              purposes of this calculation, a reduction from the gross                                                          
              value at the point of production may apply for oil subject                                                        
              to AS 43.55.160(f) or 43.55.160(f) and (g);                                                                       
                  (B)  for oil produced before or during the last                                                               

2016-05-13                     House Journal                      Page 2833
         calendar year under AS 43.55.024(b) for which the producer                                                             
         could take a tax credit under AS 43.55.024(a), from leases or                                                          
         properties in the state outside the Cook Inlet sedimentary                                                             
         basin, no part of which is north of 68 degrees North latitude,                                                         
         other than leases or properties subject to AS 43.55.011(p), the                                                        
         greater of                                                                                                             
                       (i)  zero; or                                                                                            
                       (ii)  35 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 under AS 43.55.160(h)(2) from the gross value at                                                          
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated;                                                                                
                  (C)  for oil and gas produced from leases or                                                                  
         properties subject to AS 43.55.011(p), except as otherwise                                                             
         provided under (8) of this subsection, the sum of                                                                      
                       (i)  35 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 under AS 43.55.160(h)(3) from the gross value at                                                          
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated, but not less than zero;                                                        
              and                                                                                                               
                       (ii)  13 percent of the gross value at the point of                                                      
              production of the gas produced from the leases or                                                                 
              properties during the month, but not less than zero;                                                              
                  (D)  for oil produced from leases or properties in the                                                        
         state, no part of which is north of 68 degrees North latitude,                                                         
         other than leases or properties subject to (B) or (C) of this                                                          
         paragraph, the greater of                                                                                              
                       (i)  zero; or                                                                                            
                       (ii)  35 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 under AS 43.55.160(h)(4) from the gross value at                                                          

2016-05-13                     House Journal                      Page 2834
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated;                                                                                
                  (E)  for gas produced from each lease or property in                                                          
         the state, other than a lease or property subject to                                                                   
         AS 43.55.011(p), 13 percent of the gross value at the point of                                                         
         production of the gas produced from the lease or property                                                              
         during the month for which the installment payment is                                                                  
         calculated, but not less than zero;                                                                                    
              (8)  an amount calculated under (7)(C) of this subsection                                                         
     may not exceed four percent of the gross value at the point of                                                             
     production of the oil and gas produced from leases or properties                                                           
     subject to AS 43.55.011(p) during the month for which the                                                                  
     installment payment is calculated;                                                                                         
              (9)  for purposes of the calculation under (1)(B)(ii),                                                            
     (5)(B)(ii), and (7)(A)(ii) of this subsection, the applicable                                                              
     percentage of the gross value at the point of production is                                                                
     determined under AS 43.55.011(f)(1) - (3) [AS 43.55.011(f)(1)                                                          
     OR (2)] but substituting the phrase "month for which the                                                                   
     installment payment is calculated" in AS 43.55.011(f)(1) - (3)                                                         
     [AS 43.55.011(f)(1) AND (2)] for the phrase "calendar year for                                                             
     which the tax is due";                                                                                                 
              (10)  after December 31, 2016, for the purposes of a                                                          
     calculation under (5) or (7) of this subsection, a credit under                                                        
     AS 43.55.024(j) may not be applied to reduce an installment                                                            
     payment to less than the applicable percentage under                                                                   
     AS 43.55.011(f). ["]                                                                                                   
   * Sec. 18. AS 43.55.020(a), as amended by sec. 17 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)  [FOR OIL AND GAS PRODUCED BEFORE                                                                             
     JANUARY 1, 2014, 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,                                                                               

2016-05-13                     House Journal                      Page 2835
     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 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                                                                            

2016-05-13                     House Journal                      Page 2836
              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;                                                                            
                  (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 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)  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                                                                            

2016-05-13                     House Journal                      Page 2837
              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                                                                         
     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;                                                               
              (2) [(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                                                            

2016-05-13                     House Journal                      Page 2838
     on March 31 of the year following the calendar year of                                                                     
     production;                                                                                                                
              (3) [(5)]  for oil and gas produced on and after January 1,                                                   
     2014, and before January 1, 2022, 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 (7) [(6) AND (10)] 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(p)                                                       
         [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)  35 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;                                                                            
                  (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)  35 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                                                           

2016-05-13                     House Journal                      Page 2839
              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, except that,                                                         
              for the purposes of this calculation, a reduction from the                                                        
              gross value at the point of production may apply for oil                                                          
              and gas subject to AS 43.55.160(f) or (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)  35 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)  35 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; 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;                                                              
              (4) [(6)  AN AMOUNT CALCULATED UNDER (5)(C)                                                                   
     OF THIS SUBSECTION FOR OIL OR GAS SUBJECT TO                                                                               
     AS 43.55.011(j), (k), OR (o) MAY NOT EXCEED THE                                                                            

2016-05-13                     House Journal                      Page 2840
     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;                                                                                                  
              (7)]  for oil and gas produced on or after January 1, 2022,                                                       
     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 provided in (7) [(10)] 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 produced from leases or properties that                                                          
         include land north of 68 degrees North latitude, 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 produced from the                                                           
              leases or properties during the month for which the                                                               
              installment payment is calculated; or                                                                             
                       (iii)  35 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 under AS 43.55.160(h)(1) from the gross value at                                                          
              the point of production of the oil produced from those                                                            
              leases or properties during the month for which the                                                               
              installment payment is calculated, except that, for the                                                           
              purposes of this calculation, a reduction from the gross                                                          

2016-05-13                     House Journal                      Page 2841
              value at the point of production may apply for oil subject                                                        
              to AS 43.55.160(f) or 43.55.160(f) and (g);                                                                       
                  (B)  for oil produced before or during the last                                                               
         calendar year under AS 43.55.024(b) for which the producer                                                             
         could take a tax credit under AS 43.55.024(a), from leases or                                                          
         properties in the state outside the Cook Inlet sedimentary                                                             
         basin, no part of which is north of 68 degrees North latitude,                                                         
         other than leases or properties subject to AS 43.55.011(p), the                                                        
         greater of                                                                                                             
                       (i)  zero; or                                                                                            
                       (ii)  35 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 under AS 43.55.160(h)(2) from the gross value at                                                          
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated;                                                                                
                  (C)  for oil and gas produced from leases or                                                                  
         properties subject to AS 43.55.011(p), except as otherwise                                                             
          provided under (5) [(8)] of this subsection, the sum of                                                          
                       (i)  35 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 under AS 43.55.160(h)(3) from the gross value at                                                          
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated, but not less than zero;                                                        
              and                                                                                                               
                       (ii)  13 percent of the gross value at the point of                                                      
              production of the gas produced from the leases or                                                                 
              properties during the month, but not less than zero;                                                              
                  (D)  for oil produced from leases or properties in the                                                        
         state, no part of which is north of 68 degrees North latitude,                                                         
         other than leases or properties subject to (B) or (C) of this                                                          
         paragraph, the greater of                                                                                              
                       (i)  zero; or                                                                                            
                       (ii)  35 percent multiplied by the remainder                                                             
              obtained by subtracting 1/12 of the producer's adjusted                                                           

2016-05-13                     House Journal                      Page 2842
              lease expenditures for the calendar year of production                                                            
              under AS 43.55.165 and 43.55.170 that are deductible for                                                          
              the oil under AS 43.55.160(h)(4) from the gross value at                                                          
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated;                                                                                
                  (E)  for gas produced from each lease or property in                                                          
         the state, other than a lease or property subject to                                                                   
         AS 43.55.011(p), 13 percent of the gross value at the point of                                                         
         production of the gas produced from the lease or property                                                              
         during the month for which the installment payment is                                                                  
         calculated, but not less than zero;                                                                                    
              (5) [(8)]  an amount calculated under (4)(C) [(7)(C)] of                                                  
     this subsection may not exceed four percent of the gross value at                                                          
     the point of production of the oil and gas produced from leases or                                                         
     properties subject to AS 43.55.011(p) during the month for which                                                           
     the installment payment is calculated;                                                                                     
              (6) [(9)]  for purposes of the calculation under (3)(B)(ii)                                               
     [(1)(B)(ii), (5)(B)(ii),] and (4)(A)(ii) [(7)(A)(ii)] of this                                                          
     subsection, the applicable percentage of the gross value at the                                                            
     point of production is determined under AS 43.55.011(f)(1) - (3)                                                           
     but substituting the phrase "month for which the installment                                                               
     payment is calculated" in AS 43.55.011(f)(1) - (3) for the phrase                                                          
     "calendar year for which the tax is due";                                                                                  
              (7) [(10)]  after December 31, 2016, for the purposes of a                                                    
     calculation under (3) or (4) [(5) OR (7)] of this subsection, a                                                        
     credit under AS 43.55.024(j) may not be applied to reduce an                                                               
     installment payment to less than the applicable percentage under                                                           
     AS 43.55.011(f).                                                                                                           
   * Sec. 19. AS 43.55.020(g) is amended to read:                                                                             
         (g)  Notwithstanding any contrary provision of AS 43.05.225,                                                           
              (1)  before January 1, 2014, an unpaid amount of an                                                               
     installment payment required under (a)(1) [(a)(1) - (3)] of this                                                       
     section that is not paid when due bears interest (A) at the rate                                                           
     provided for an underpayment under 26 U.S.C. 6621 (Internal                                                                
     Revenue Code), as amended, compounded daily, from the date the                                                             
     installment payment is due until March 31 following the calendar                                                           
     year of production, and (B) as provided for a delinquent tax under                                                         
     AS 43.05.225 after that March 31; interest accrued under (A) of                                                            
     this paragraph that remains unpaid after that March 31 is treated as                                                       

2016-05-13                     House Journal                      Page 2843
     an addition to tax that bears interest under (B) of this paragraph;                                                        
     an unpaid amount of tax due under (a)(2) [(a)(4)] of this section                                                      
     that is not paid when due bears interest as provided for a                                                                 
     delinquent tax under AS 43.05.225;                                                                                         
              (2)  on and after January 1, 2014, an unpaid amount of an                                                         
     installment payment required under (a)(1), (3), or (4) [(a)(3), (5),                                                   
     (6), OR (7)] of this section that is not paid when due bears interest                                                      
     (A) at the rate provided for an underpayment under 26 U.S.C.                                                               
     6621 (Internal Revenue Code), as amended, compounded daily,                                                                
     from the date the installment payment is due until March 31                                                                
     following the calendar year of production, and (B) as provided for                                                         
     a delinquent tax under AS 43.05.225 after that March 31; interest                                                          
     accrued under (A) of this paragraph that remains unpaid after that                                                         
     March 31 is treated as an addition to tax that bears interest under                                                        
     (B) of this paragraph; an unpaid amount of tax due under (a)(2)                                                        
     [(a)(4)] of this section that is not paid when due bears interest as                                                       
     provided for a delinquent tax under AS 43.05.225.                                                                          
   * Sec. 20. AS 43.55.020(h) is amended to read:                                                                             
         (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                           
              (1)  an overpayment of an installment payment required                                                            
     under (a)(1), (3), or (4) [(a)(1), (2), (3), (5), (6), OR (7)] of this                                                 
     section bears interest at the rate provided for an overpayment                                                             
     under 26 U.S.C. 6621 (Internal Revenue Code), as amended,                                                                  
     compounded daily, from the later of the date the installment                                                               
     payment is due or the date the overpayment is made, until the                                                              
     earlier of                                                                                                                 
                  (A)  the date it is refunded or is applied to an                                                              
         underpayment; or                                                                                                       
                  (B)  March 31 following the calendar year of                                                                  
         production;                                                                                                            
              (2)  except as provided under (1) of this subsection,                                                             
     interest with respect to an overpayment is allowed only on any net                                                         
     overpayment of the payments required under (a) of this section                                                             
     that remains after the later of March 31 following the calendar                                                            
     year of production or the date that the statement required under                                                           
     AS 43.55.030(a) is filed;                                                                                                  
              (3)  interest is allowed under (2) of this subsection only                                                        
     from a date that is 90 days after the later of March 31 following                                                          
     the calendar year of production or the date that the statement                                                             
     required under AS 43.55.030(a) is filed; interest is not allowed if                                                        

2016-05-13                     House Journal                      Page 2844
     the overpayment was refunded within the 90-day period;                                                                     
              (4)  interest under (2) and (3) of this subsection is paid at                                                     
     the rate and in the manner provided in AS 43.05.225(1).                                                                    
   * Sec. 21. AS 43.55.020(i) is amended to read:                                                                             
         (i)  Notwithstanding any contrary provision of AS 43.05.225                                                            
     or (g) or (h) of this section, if the amount of a tax payment,                                                             
     including an installment payment, due under (a)(1) and (2) [(a)(1)                                                     
     - (4)] of this section is affected by the retroactive application of a                                                     
     regulation adopted under this chapter, the department shall                                                                
     determine whether the retroactive application of the regulation                                                            
     caused an underpayment or an overpayment of the amount due                                                                 
      and adjust the interest due on the affected payment as follows:                                                          
              (1)  if an underpayment of the amount due occurred, the                                                           
     department shall waive interest that would otherwise accrue for                                                            
     the underpayment before the first day of the second month                                                                  
     following the month in which the regulation became effective, if                                                          
                  (A)  the department determines that the producer's                                                            
         underpayment resulted because the regulation was not in                                                                
         effect when the payment was due; and                                                                                   
                  (B)  the producer demonstrates that it made a good                                                            
         faith estimate of its tax obligation in light of the regulations                                                       
         then in effect when the payment was due and paid the                                                                   
         estimated tax;                                                                                                         
              (2)  if an overpayment of the amount due occurred and                                                             
     the department determines that the producer's overpayment                                                                  
     resulted because the regulation was not in effect when the                                                                 
     payment was due, the obligation for a refund for the overpayment                                                           
     does not begin to accrue interest earlier than the following, as                                                           
     applicable:                                                                                                                
                  (A)  except as otherwise provided under (B) of this                                                           
         paragraph, the first day of the second month following the                                                             
         month in which the regulation became effective;                                                                        
                  (B)  90 days after an amended statement under                                                                 
         AS 43.55.030(a) and an application to request a refund of                                                              
         production tax paid is filed, if the overpayment was for a                                                             
         period for which an amended statement under                                                                            
         AS 43.55.030(a) was required to be filed before the regulation                                                         
         became effective.                                                                                                      
   * Sec. 22. AS 43.55.023(a) is amended to read:                                                                             
         (a)  A producer or explorer may take a tax credit for a                                                                

2016-05-13                     House Journal                      Page 2845
     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;                                                                                  
              (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                                                               
                  (A)  north of 68 degrees North latitude may be taken                                                      
         only if the expenditure is incurred before January 1, 2014;                                                        
                  (B)  in the Cook Inlet sedimentary basin may be                                                           
         taken only if the expenditure is incurred before July 1,                                                           
         2016.                                                                                                              
   * Sec. 23. AS 43.55.023(a), as amended by sec. 22 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 10 [20] percent of                                                      
     that expenditure;                                                                                                          
              (2)  a producer or explorer may take a credit for a                                                               
     qualified capital expenditure incurred in connection with                                                                  

2016-05-13                     House Journal                      Page 2846
     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                                                               
                  (A)north of 68 degrees North latitude may be taken                                                            
         only if the expenditure is incurred before January 1, 2014;                                                            
                  (B)  in the Cook Inlet sedimentary basin may be                                                               
         taken only if the expenditure is incurred before July 1, 2016.                                                         
   * Sec. 24. AS 43.55.023(b) is amended to read:                                                                             
         (b)  Before January 1, 2014, a producer or explorer may elect                                                          
     to take a tax credit in the amount of 25 percent of a carried-                                                             
     forward annual loss. For lease expenditures incurred on and after                                                          
     January 1, 2014, and before January 1, 2016, to explore for,                                                               
     develop, or produce oil or gas deposits located north of 68 degrees                                                        
     North latitude, a producer or explorer may elect to take a tax credit                                                      
     in the amount of 45 percent of a carried-forward annual loss. For                                                          
     lease expenditures incurred during calendar year 2016 [ON                                                              
     AND AFTER JANUARY 1, 2016,] to explore for, develop, or                                                                    
     produce oil or gas deposits located north of 68 degrees North                                                              
     latitude, a producer or explorer may elect to take a tax credit in the                                                     
     amount of 35 percent of a carried-forward annual loss. For lease                                                       
     expenditures incurred north of 68 degrees North latitude, a                                                            
     producer may elect to take a tax credit in the amount of 32                                                            
     percent of a carried-forward annual loss incurred during                                                               
     calendar year 2017 or 2018; 29 percent of a carried-forward                                                            
     annual loss incurred during calendar year 2019 or 2020; 26                                                             
     percent of a carried-forward annual loss incurred during                                                               
     calendar year 2021 or 2022; and 25 percent of a carried-                                                               
     forward annual loss incurred after calendar year 2021. For                                                             
     lease expenditures incurred on or after January 1, 2014, and                                                           
     before January 1, 2018, to explore for, develop, or produce oil or                                                     
     gas deposits located south of 68 degrees North latitude, a producer                                                        
     or explorer may elect to take a tax credit in the amount of 25                                                             
     percent of a carried-forward annual loss. For lease expenditures                                                       
     incurred after December 31, 2017, to explore for, develop, or                                                          

2016-05-13                     House Journal                      Page 2847
     produce oil or gas deposits located south of 68 degrees North                                                          
     latitude and outside of the Cook Inlet sedimentary basin, a                                                            
     producer may elect to take a tax credit in the amount of 25                                                            
     percent of a carried-forward annual loss. A credit under this                                                          
     subsection for an expenditure incurred after December 31,                                                              
     2016, is subject to the requirements of (q) of this section. A                                                         
     credit under this subsection may be applied against a tax levied by                                                        
     AS 43.55.011(e). For purposes of this subsection,                                                                          
              (1)  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;                                                                                      
              (2)  for lease expenditures incurred after                                                                    
     December 31, 2016, any reduction under AS 43.55.160(f) or (g)                                                          
     is added back to the calculation of production tax values for                                                          
     that calendar year under AS 43.55.160 for the determination                                                            
     of a carried-forward annual loss.                                                                                      
   * Sec. 25. AS 43.55.023(d) is amended 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 a transferable tax credit certificate. An application                                                       
     under this subsection must be in a form prescribed by the                                                                  
     department and must include supporting information and                                                                     
     documentation that the department reasonably requires. The                                                                 
     department shall grant or deny an application, or grant an                                                                 
     application as to a lesser amount than that claimed and deny it as                                                         
     to the excess, not later than 120 days after the latest of (1)                                                             
     March 31 of the year following the calendar year in which the                                                              
     [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward                                                                         
     annual loss for which the credit is claimed was incurred; (2) the                                                          
     date the statement required under AS 43.55.030(a) or (e) was filed                                                         
     for the calendar year in which the [QUALIFIED CAPITAL                                                                      
     EXPENDITURE OR] carried-forward annual loss for which the                                                                  
     credit is claimed was incurred; or (3) the date the application was                                                        
     received 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 a transferable tax credit certificate for the amount of the                                                      

2016-05-13                     House Journal                      Page 2848
    credit. A certificate issued under this subsection does not expire.                                                        
   * Sec. 26. AS 43.55.023(e) is amended to read:                                                                             
         (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 former (a) of this                                                  
     section and (b) - (d) [(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 43.55.011(e). However,                                                         
     a credit shown on a transferable tax credit certificate may not be                                                         
     applied to reduce a transferee's total tax liability under                                                                 
     AS 43.55.011(e) 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.                                                                    
   * Sec. 27. AS 43.55.023(l) is amended to read:                                                                             
         (l)  A producer or explorer may apply for a tax credit for a                                                           
     well lease expenditure incurred in the state [SOUTH OF 68                                                                  
     DEGREES NORTH LATITUDE] after June 30, 2010, as follows:                                                                   
              (1)  notwithstanding that a well lease expenditure                                                                
     incurred in the state [SOUTH OF 68 DEGREES NORTH                                                                           
     LATITUDE] 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 (a) of this section, [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 well lease expenditure in the state [SOUTH OF 68 DEGREES                                                                 
     NORTH LATITUDE] may elect to apply a tax credit against a tax                                                              
     levied by AS 43.55.011(e) in the amount of                                                                                 
                  (A)  40 percent of that expenditure incurred south of                                                 
             68 degrees North latitude before January 1, 2017;                                                             
                  (B)  20 percent of that expenditure incurred inside                                                       
         the Cook Inlet sedimentary basin after December 31,                                                                
         2016, and before January 1, 2018;                                                                                  
                  (C)  30 percent of that expenditure incurred                                                              
         outside the Cook Inlet sedimentary basin and south of 68                                                           
         degrees North latitude after December 31, 2016  [; A TAX                                                           
         CREDIT UNDER THIS PARAGRAPH MAY BE APPLIED                                                                             

2016-05-13                     House Journal                      Page 2849
         FOR A SINGLE CALENDAR YEAR];                                                                                           
              (2)  a producer or explorer may take a credit for a well                                                          
     lease expenditure incurred                                                                                                 
                  (A)  in the state south of 68 degrees North latitude in                                                   
         connection with geological or geophysical exploration or in                                                            
         connection with an exploration well only if the producer or                                                            
         explorer                                                                                                               
                       (i) [(A)]  agrees, in writing, to the applicable                                                     
              provisions of AS 43.55.025(f)(2); and                                                                             
                       (ii) [(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)  in the Cook Inlet sedimentary basin only if                                                          
         the producer or explorer produced oil or gas in the Cook                                                           
         Inlet sedimentary basin before January 1, 2017.                                                                    
   * Sec. 28. AS 43.55.023 is amended by adding new subsections to                                                            
read:                                                                                                                           
         (q)  For a calendar year after December 31, 2016, to qualify                                                           
     for a credit under (b) of this section,                                                                                    
              (1)  the producer incurring the expenditure may not have                                                          
     an average daily production of more than 15,000 BTU equivalent                                                             
     barrels a day in the state during the calendar year in which the                                                           
     expenditure is incurred;                                                                                                   
              (2)  the expenditure must be incurred for a lease                                                                 
                  (A)  from which the state receives a royalty under                                                            
         AS 38.05 or federal law and in a unit under a unit plan of                                                             
         development approved by the commissioner of natural                                                                    
         resources as consistent with AS 38.05.180 or by the                                                                    
         applicable federal agency; and                                                                                         
                  (B)  in which the producer has a working interest;                                                            
         and                                                                                                                    
              (3)  if the unit is in the Cook Inlet sedimentary basin, the                                                      
     producer incurring the expenditure must have produced oil or gas                                                           
     in the Cook Inlet sedimentary basin before January 1, 2017.                                                                
         (r)  Notwithstanding the limitation on the use of a transferable                                                       
     tax credit certificate by a transferee in (e) of this section, and                                                         
     subject to appropriation, the department shall issue a cash refund                                                         
     to the Alaska Retirement Management Board for a transferable tax                                                           
     credit certificate originally issued to a person under (d) of this                                                         
     section and purchased by the Alaska Retirement Management                                                                  

2016-05-13                     House Journal                      Page 2850
     Board under AS 37.10.220(b) within five years after the board's                                                            
     purchase of the certificate. The refund shall be made from funds                                                           
     appropriated from the general fund to the department for that                                                              
     purpose.                                                                                                                   
   * Sec. 29. AS 43.55.024(i) is amended to read:                                                                             
         (i)  A producer may apply against the producer's tax liability                                                         
     for the calendar year under AS 43.55.011(e) a tax credit of $5 for                                                         
     each barrel of oil taxable under AS 43.55.011(e) that receives a                                                       
     reduction in the gross value at the point of production under                                                          
     [MEETS ONE OR MORE OF THE CRITERIA IN]                                                                                     
     AS 43.55.160(f) or (g) and that is produced during a calendar year                                                         
     after December 31, 2013. A tax credit authorized by this                                                                   
     subsection may not reduce a producer's tax liability for a calendar                                                        
     year under AS 43.55.011(e) below zero.                                                                                     
   * Sec. 30. AS 43.55.024(j) is amended to read:                                                                             
         (j)  A producer may apply against the producer's tax liability                                                         
     for the calendar year under AS 43.55.011(e) a tax credit in the                                                            
     amount specified in this subsection for each barrel of oil taxable                                                         
     under AS 43.55.011(e) that does not receive a reduction in the                                                         
     gross value at the point of production under [MEET ANY OF                                                              
     THE CRITERIA IN] AS 43.55.160(f) or (g) and that is produced                                                               
     during a calendar year after December 31, 2013, from leases or                                                             
     properties north of 68 degrees North latitude. A tax credit under                                                          
     this subsection may not reduce a producer's tax liability for a                                                            
     calendar year under AS 43.55.011(e) below the amount calculated                                                            
     under AS 43.55.011(f). The amount of the tax credit for a barrel of                                                        
     taxable oil subject to this subsection produced during a month of                                                          
     the calendar year is                                                                                                       
              (1)  $8 for each barrel of taxable oil if the average gross                                                       
     value at the point of production for the month is less than $80 a                                                          
     barrel;                                                                                                                    
              (2)  $7 for each barrel of taxable oil if the average gross                                                       
     value at the point of production for the month is greater than or                                                          
     equal to $80 a barrel, but less than $90 a barrel;                                                                         
              (3)  $6 for each barrel of taxable oil if the average gross                                                       
     value at the point of production for the month is greater than or                                                          
     equal to $90 a barrel, but less than $100 a barrel;                                                                        
              (4)  $5 for each barrel of taxable oil if the average gross                                                       
     value at the point of production for the month is greater than or                                                          
     equal to $100 a barrel, but less than $110 a barrel;                                                                       

2016-05-13                     House Journal                      Page 2851
              (5)  $4 for each barrel of taxable oil if the average gross                                                       
     value at the point of production for the month is greater than or                                                          
     equal to $110 a barrel, but less than $120 a barrel;                                                                       
              (6)  $3 for each barrel of taxable oil if the average gross                                                       
     value at the point of production for the month is greater than or                                                          
     equal to $120 a barrel, but less than $130 a barrel;                                                                       
              (7)  $2 for each barrel of taxable oil if the average gross                                                       
     value at the point of production for the month is greater than or                                                          
     equal to $130 a barrel, but less than $140 a barrel;                                                                       
              (8)  $1 for each barrel of taxable oil if the average gross                                                       
     value at the point of production for the month is greater than or                                                          
     equal to $140 a barrel, but less than $150 a barrel;                                                                       
              (9)  zero if the average gross value at the point of                                                              
     production for the month is greater than or equal to $150 a barrel.                                                        
   * Sec. 31. 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. Notwithstanding (b) of                                                      
     this section, exploration [EXPLORATION] expenditures eligible                                                          
     for the credit in this subsection must be incurred for work                                                                
     performed after June 1, 2012, and before July 1, 2017, except                                                          
     that expenditures to complete an exploration well that was                                                             
     spudded but not completed before July 1, 2017, are eligible for                                                        
     the credit under this subsection [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)(1), (c)(2)(A), and (c)(2)(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                                                      

2016-05-13                     House Journal                      Page 2852
     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 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                                                                
     another provision in this section for the same exploration                                                                 
     expenditure.                                                                                                               
   * Sec. 32. AS 43.55.025 is amended by adding a new subsection to                                                           
read:                                                                                                                           
         (q)  Notwithstanding the limitation on the use of a production                                                         
     tax credit certificate by a transferee in (f) of this section, and                                                         
     subject to appropriation, the department shall issue a cash refund                                                         
     to the Alaska Retirement Management Board for a production tax                                                             
     credit certificate originally issued to an explorer under (f) of this                                                      
     section and purchased by the Alaska Retirement Management                                                                  
     Board under AS 37.10.220(b) within five years of the board's                                                               
     purchase of the certificate. The refund shall be made from funds                                                           
     appropriated from the general fund to the department for that                                                              
     purpose.                                                                                                                   
   * Sec. 33. AS 43.55.028(a) is amended to read:                                                                             
         (a)  The oil and gas tax credit fund is established as a separate                                                      

2016-05-13                     House Journal                      Page 2853
     fund of the state. The purpose of the fund is to purchase                                                                  
     transferable tax credit certificates issued under AS 43.55.023 and                                                         
     production tax credit certificates issued under AS 43.55.025 and                                                           
     to pay refunds and payments claimed under AS 43.20.046,                                                                    
     43.20.047, or 43.20.053. The fund may not be used to purchase                                                          
     a transferable tax credit certificate or production tax credit                                                         
     certificate from the Alaska Retirement Management Board                                                                
     that the board purchased under AS 37.10.220(b) or to pay a                                                             
     refund under AS 43.55.023(r) or 43.55.025(q).                                                                          
   * Sec. 34. AS 43.55.028(e) is amended to read:                                                                             
         (e)  The department, on the written application of a person to                                                         
     whom a transferable tax credit certificate has been issued under                                                           
     AS 43.55.023(d) or former AS 43.55.023(m) or 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. The                                                     
     department may not purchase a total of more than                                                                       
     $70,000,000 in tax credit certificates from a person in a                                                              
     calendar year. The department may only purchase a                                                                      
     certificate or part of a 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 application is not the result of the division of a                                                   
     single entity into multiple entities that would reasonably be                                                          
     expected to apply as a single entity if the $70,000,000                                                                
     limitation in this subsection did not exist [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 15,000 [50,000] BTU equivalent barrels; and                                                                       
              (5)  the purchase is consistent with this section and                                                             
     regulations adopted under this section.                                                                                    
   * Sec. 35. AS 43.55.028(g) is amended to read:                                                                             
         (g)  The department shall [MAY] adopt regulations to carry                                                         

2016-05-13                     House Journal                      Page 2854
     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, 43.20.047, or 43.20.053 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, when allocating available money in                                                          
     the fund under this section,                                                                                           
              (1)  may not [, WHEN ALLOCATING AVAILABLE                                                                     
     MONEY IN THE FUND UNDER THIS SECTION,] distinguish                                                                         
     an application for the purchase of a credit certificate issued under                                                       
     former AS 43.55.023(m) or a claim for a refund or payment under                                                            
     AS 43.20.046, 43.20.047, or 43.20.053;                                                                                 
              (2)  must grant a preference, between two applicants,                                                         
     to the applicant with a higher percentage of resident workers                                                          
     in the applicant's workforce, including workers employed by                                                            
     the applicant's direct contractors, in the state in the previous                                                       
     calendar year; in this paragraph, "resident worker" has the                                                            
     meaning given in AS 43.40.092(b).                                                                                      
   * Sec. 36. AS 43.55.028 is amended by adding a new subsection to                                                           
read:                                                                                                                           
         (j)  If an applicant or claimant has an outstanding liability to                                                       
     the state directly related to the applicant's or claimant's oil or gas                                                     
     exploration, development, or production and the department has                                                             
     not previously reduced the amount paid to that applicant or                                                                
     claimant for a certificate or refund because of that outstanding                                                           
     liability, the department may purchase only that portion of a                                                              
     certificate or pay only that portion of a refund that exceeds the                                                          
     outstanding liability. The department may apply the amount by                                                              
     which the department reduced its purchase of a certificate or                                                              
     payment for a refund because of an outstanding liability to satisfy                                                        
     the outstanding liability. Satisfaction of an outstanding liability                                                        
     under this subsection does not affect the applicant's ability to                                                           
     contest that liability. The department may enter into contracts or                                                         
     agreements with another department to which the outstanding                                                                
     liability is owed. In this subsection, "outstanding liability" means                                                       
     an amount of tax, interest, penalty, fee, rental, royalty, or other                                                        
     charge for which the state has issued a demand for payment that                                                            
     has not been paid when due and, if contested, has not been finally                                                         
     resolved against the state.                                                                                                

2016-05-13                     House Journal                      Page 2855
   * Sec. 37. AS 43.55.029(a) is amended to read:                                                                             
         (a)  An explorer or producer that has applied for a production                                                         
     tax credit under AS 43.55.023(a) or [,] (b), [OR (l) OR]                                                               
     43.55.025(a), or former AS 43.55.023(l) may make a present                                                             
     assignment of the production tax credit certificate expected to be                                                         
     issued by the department to a third-party assignee. The assignment                                                         
     may be made either at the time the application is filed with the                                                           
     department or not later than 30 days after the date of filing with                                                         
     the department. Once a notice of assignment in compliance with                                                             
     this section is filed with the department, the assignment is                                                               
     irrevocable and cannot be modified by the explorer or producer                                                             
     without the written consent of the assignee named in the                                                                   
     assignment. If a production tax credit certificate is issued to the                                                        
     explorer or producer, the notice of assignment remains effective                                                           
     and shall be filed with the department by the explorer or producer                                                         
     together with any application for the department to purchase the                                                           
     certificate under AS 43.55.028(e).                                                                                         
   * Sec. 38. AS 43.55.029(a), as amended by sec. 37 of this Act, is                                                          
amended to read:                                                                                                                
         (a)  An explorer or producer that has applied for a production                                                         
     tax credit under AS 43.55.023(b) [AS 43.55.023(a) OR (b)],                                                             
     43.55.025(a), or former AS 43.55.023(a) or (l) [AS 43.55.023(l)]                                                       
     may make a present assignment of the production tax credit                                                                 
     certificate expected to be issued by the department to a third-party                                                       
     assignee. The assignment may be made either at the time the                                                                
     application is filed with the department or not later than 30 days                                                         
     after the date of filing with the department. Once a notice of                                                             
     assignment in compliance with this section is filed with the                                                               
     department, the assignment is irrevocable and cannot be modified                                                           
     by the explorer or producer without the written consent of the                                                             
     assignee named in the assignment. If a production tax credit                                                               
     certificate is issued to the explorer or producer, the notice of                                                           
     assignment remains effective and shall be filed with the                                                                   
     department by the explorer or producer together with any                                                                   
     application for the department to purchase the certificate under                                                           
     AS 43.55.028(e).                                                                                                           
   * Sec. 39. AS 43.55.030(a) is amended to read:                                                                             
         (a)  A producer that produces oil or gas from a lease or                                                               
     property in the state during a calendar year, whether or not any tax                                                       
     payment is due under AS 43.55.020(a) for that oil or gas, shall file                                                       

2016-05-13                     House Journal                      Page 2856
     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)  a description of each lease or property from which oil                                                       
     or gas was produced, by name, legal description, lease number, or                                                          
     accounting codes assigned by the department;                                                                               
              (2)  the names of the producer and, if different, the person                                                      
     paying the tax, if any;                                                                                                    
              (3)  the gross amount of oil and the gross amount of gas                                                          
     produced from each lease or property, separately identifying the                                                           
     gross amount of gas produced from each oil and gas lease to                                                                
     which an effective election under AS 43.55.014(a) applies, the                                                             
     amount of gas delivered to the state under AS 43.55.014(b), and                                                            
     the percentage of the gross amount of oil and gas owned by the                                                             
     producer;                                                                                                                  
              (4)  the gross value at the point of production of the oil                                                        
     and of the gas produced from each lease or property owned by the                                                           
     producer and the costs of transportation of the oil and gas;                                                               
              (5)  the name of the first purchaser and the price received                                                       
     for the oil and for the gas, unless relieved from this requirement in                                                      
     whole or in part by the department;                                                                                        
              (6)  the producer's qualified capital expenditures, [AS                                                           
     DEFINED IN AS 43.55.023,] other lease expenditures under                                                                   
     AS 43.55.165, and adjustments or other payments or credits under                                                           
     AS 43.55.170;                                                                                                              
              (7)  the production tax values of the oil and gas under                                                           
     AS 43.55.160(a) or of the oil under AS 43.55.160(h), as                                                                    
     applicable;                                                                                                                
              (8)  any claims for tax credits to be applied; and                                                                
              (9)  calculations showing the amounts, if any, that were or                                                       
     are due under AS 43.55.020(a) and interest on any underpayment                                                             
     or overpayment.                                                                                                            
   * Sec. 40. AS 43.55.030(e) is amended to read:                                                                             
         (e)  An explorer or producer that incurs a lease expenditure                                                           
     under AS 43.55.165 or receives a payment or credit under                                                                   
     AS 43.55.170 during a calendar year but does not produce oil or                                                            
     gas from a lease or property in the state during the calendar year                                                         
     shall file with the department, on March 31 of the following year,                                                         
     a statement, under oath, in a form prescribed by the department,                                                           
     giving, with other information required, the following:                                                                    

2016-05-13                     House Journal                      Page 2857
              (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.                                                                                       
   * Sec. 41. AS 43.55.150 is amended by adding a new subsection to                                                           
read:                                                                                                                           
         (d)  For purposes of calculating the tax under this chapter, the                                                       
     gross value at the point of production may not be less than zero.                                                         
   * Sec. 42. AS 43.55.160(a) is amended to read:                                                                             
         (a)  For oil and gas produced before January 1, 2022, except                                                           
     as provided in (b), (f), and (g) of this section, for the purposes of                                                      
              (1)  AS 43.55.011(e)(1) and (2), the annual production tax                                                        
     value of taxable oil, gas, or oil and gas produced during a calendar                                                       
     year in a category for which a separate annual production tax                                                              
     value is required to be calculated under this paragraph is the gross                                                       
     value at the point of production of that 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 in that category produced by the                                                           
     producer during the calendar year, as adjusted under                                                                       
     AS 43.55.170; a separate annual production tax value shall be                                                              
     calculated for                                                                                                             
                  (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 and that qualifies                                                         
         for a tax credit under AS 43.55.024(a) and (b); 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                                                                           
         EACH LEASE OR PROPERTY IN THE COOK INLET                                                                               
         SEDIMENTARY BASIN;                                                                                                     

2016-05-13                     House Journal                      Page 2858
                  (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;                                                                                
                  (D) [(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) or [,] (C)                                                  
         [, (D), (E), OR (F)] of this paragraph;                                                                                
              (2)  AS 43.55.011(g), for oil and gas produced before                                                             
     January 1, 2014, 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                                                              

2016-05-13                     House Journal                      Page 2859
         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.                                                           
   * Sec. 43. AS 43.55.160(e) 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                                                                    
     production tax value calculated under (a)(1) or (h) 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(p)                                                                 
     [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),] or (h)(3) 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(p) [AS 43.55.011(j), (k), (o), OR (p)] that                                                         

2016-05-13                     House Journal                      Page 2860
     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(p) [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."                                                                           
   * Sec. 44. AS 43.55.160(f) is amended to read:                                                                             
         (f)  On and after January 1, 2014, in the calculation of an                                                            
     annual production tax value of a producer under (a)(1)(A) or                                                               
     (h)(1) of this section, the gross value at the point of production of                                                      
     oil or gas produced from a lease or property north of 68 degrees                                                           
     North latitude meeting one or more of the following criteria is                                                            
     reduced by 20 percent: (1) the oil or gas is produced from a lease                                                         
     or property that does not contain a lease that was within a unit on                                                        
     January 1, 2003; (2) the oil or gas is produced from a participating                                                       
     area established after December 31, 2011, 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 December 31, 2011;                                                         
     (3) the oil or gas is produced from acreage that was added to an                                                           
     existing participating area by the Department of Natural                                                                   
     Resources on and after January 1, 2014, and the producer                                                                   
     demonstrates to the department that the volume of oil or gas                                                               
     produced is from acreage added to an existing participating area.                                                          
     This subsection does not apply to gas produced before 2022 that is                                                         
     used in the state or to gas produced on and after January 1, 2022.                                                         
     For oil and gas first produced from a lease or property after                                                          
     December 31, 2016, a reduction allowed under this subsection                                                           
     applies from the date of commencement of regular production                                                            
     of oil and gas in commercial quantities from that lease or                                                             
     property and expires after three years, consecutive or                                                                 
     nonconsecutive, in which the average annual price per barrel                                                           
     for Alaska North Slope crude oil for sale on the United States                                                         
     West Coast is more than $70 or after seven years, whichever                                                            
     occurs first.  For oil and gas first produced from a lease or                                                          
     property before January 1, 2017, a reduction allowed under                                                             
     this subsection expires on the earlier of January 1, 2023, or                                                          
     January 1 following three years, consecutive or                                                                        

2016-05-13                     House Journal                      Page 2861
     nonconsecutive, in which the average annual price per barrel                                                           
     for Alaska North Slope crude oil for sale on the United States                                                         
     West Coast is more than $70. A reduction under this subsection                                                         
     may not reduce the gross value at the point of production below                                                            
     zero. In this subsection, "participating area" means a reservoir or                                                        
     portion of a reservoir producing or contributing to production as                                                          
     approved by the Department of Natural Resources.                                                                           
   * Sec. 45. AS 43.55.160(g) is amended to read:                                                                             
         (g)  On and after January 1, 2014, in addition to the reduction                                                        
     under (f) of this section, in the calculation of an annual production                                                      
     tax value of a producer under (a)(1)(A) or (h)(1) of this section,                                                         
     the gross value at the point of production of oil or gas produced                                                          
     from a lease or property north of 68 degrees North latitude that                                                           
     does not contain a lease that was within a unit on January 1, 2003,                                                        
     is reduced by 10 percent if the oil or gas is produced from a unit                                                         
     made up solely of leases that have a royalty share of more than                                                            
     12.5 percent in amount or value of the production removed or sold                                                          
     from the lease as determined under AS 38.05.180(f). This                                                                   
     subsection does not apply if the royalty obligation for one or more                                                        
     of the leases in the unit has been reduced to 12.5 percent or less                                                         
     under AS 38.05.180(j) for all or part of the calendar year for                                                             
     which the annual production tax value is calculated. This                                                                  
     subsection does not apply to gas produced before 2022 that is used                                                         
     in the state or to gas produced on and after January 1, 2022. For                                                      
     oil or gas first produced after December 31, 2016, the                                                                 
     reduction under this subsection shall apply to oil or gas                                                              
     produced from a lease or property for the first five years after                                                       
     the commencement of production in commercial quantities of                                                             
     oil or gas from that lease or property. For oil or gas first                                                           
     produced before January 1, 2017, the reduction under this                                                              
     subsection for a lease or property shall expire January 1, 2021.                                                       
     A reduction under this subsection may not reduce the gross value                                                           
     at the point of production below zero.                                                                                     
   * Sec. 46. AS 43.55.165(a) is amended to read:                                                                             
         (a)  For [EXCEPT AS PROVIDED IN (j) AND (k) OF THIS                                                                
     SECTION, FOR] purposes of this chapter, a producer's lease                                                                 
     expenditures for a calendar year are                                                                                       
              (1)  costs, other than items listed in (e) of this section, that                                                  
     are                                                                                                                        
                  (A)  incurred by the producer during the calendar                                                             

2016-05-13                     House Journal                      Page 2862
         year after March 31, 2006, to explore for, develop, or produce                                                         
         oil or gas deposits located within the producer's leases or                                                            
         properties in the state or, in the case of land in which the                                                           
         producer does not own an operating right, operating interest,                                                          
         or working interest, to explore for oil or gas deposits within                                                         
         other land in the state; and                                                                                           
                  (B)  allowed by the department by regulation, based                                                           
         on the department's determination that the costs satisfy the                                                           
         following three requirements:                                                                                          
                       (i)  the costs must be incurred upstream of the                                                          
              point of production of oil and gas;                                                                               
                       (ii)  the costs must be ordinary and necessary                                                           
              costs of exploring for, developing, or producing, as                                                              
              applicable, oil or gas deposits; and                                                                              
                       (iii)  the costs must be direct costs of exploring                                                       
              for, developing, or producing, as applicable, oil or gas                                                          
              deposits; and                                                                                                     
              (2)  a reasonable allowance for that calendar year, as                                                            
     determined under regulations adopted by the department, for                                                                
     overhead expenses that are directly related to exploring for,                                                              
     developing, or producing, as applicable, the oil or gas deposits.                                                         
   * Sec. 47. 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, wilful 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;                                                                                                        

2016-05-13                     House Journal                      Page 2863
              (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                                                       
     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 43.55.014;                                                               
              (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                                                           

2016-05-13                     House Journal                      Page 2864
     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,                                                      
     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                                                           

2016-05-13                     House Journal                      Page 2865
         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;                                                                                                         
              (21)  costs of lobbying, public relations, public relations                                                       
     advertising, or policy advocacy.                                                                                           
   * Sec. 48. AS 43.55.165(f) is amended to read:                                                                             
         (f)  For purposes of AS 43.55.023(a) [AND (b)] 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." For                                                           
     purposes of AS 43.55.023(b), for expenditures incurred before                                                          
     January 1, 2017, 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. 49. AS 43.55.165(f), as amended by sec. 48 of this Act, is                                                          
amended to read:                                                                                                                
         (f)  [FOR PURPOSES OF AS 43.55.023(a) 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."] For purposes of AS 43.55.023(b), for                                                                          
     expenditures incurred before January 1, 2017, 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."                                                                                                       

2016-05-13                     House Journal                      Page 2866
   * Sec. 50. AS 43.55.165(h) is amended to read:                                                                             
         (h)  The department shall adopt regulations that provide for                                                           
     reasonable methods of allocating costs between oil and gas [,                                                              
     BETWEEN GAS SUBJECT TO AS 43.55.011(o) AND OTHER                                                                           
     GAS,] and between leases or properties in those circumstances                                                              
     where an allocation of costs is required to determine lease                                                                
     expenditures that are costs of exploring for, developing, or                                                               
     producing oil deposits or costs of exploring for, developing, or                                                           
     producing gas deposits, or that are costs of exploring for,                                                                
     developing, or producing oil or gas deposits located within                                                                
     different leases or properties.                                                                                            
   * Sec. 51. AS 43.55.170(c) is amended to read:                                                                             
         (c)  For purposes of AS 43.55.023(a) [AND (b)] 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."                                                         
     For purposes of AS 43.55.023(b), for expenditures incurred                                                             
     before January 1, 2017, 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. 52. AS 43.55.170(c), as amended by sec. 51 of this Act, is                                                          
amended to read:                                                                                                                
         (c)  [FOR PURPOSES OF AS 43.55.023(a) 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."] For purposes of AS 43.55.023(b), for                                                                          
     expenditures incurred before January 1, 2017, 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. 53. AS 43.55.890 is amended to read:                                                                                
         Sec. 43.55.890. Disclosure of tax information.                                                                       
     Notwithstanding any contrary provision of AS 40.25.100, and                                                                
     regardless of whether the information is considered under                                                                  
     AS 43.05.230(e) to constitute statistics classified to prevent the                                                         
     identification of particular returns or reports, the department may                                                        
     publish the following information under this chapter, if aggregated                                                        

2016-05-13                     House Journal                      Page 2867
     among three or more producers or explorers, showing by month or                                                            
    calendar year and by lease or property, unit, or area of the state:                                                        
              (1)  the amount of oil or gas production;                                                                         
              (2)  the amount of taxes levied under this chapter or paid                                                        
     under this chapter;                                                                                                        
             (3)  the effective tax rates under this chapter;                                                                  
              (4)  the gross value of oil or gas at the point of                                                                
     production;                                                                                                                
              (5)  the transportation costs for oil or gas;                                                                     
              (6)  qualified capital expenditures [, AS DEFINED IN                                                              
     AS 43.55.023];                                                                                                             
              (7)  exploration expenditures under AS 43.55.025;                                                                 
              (8)  production tax values of oil or gas under                                                                    
     AS 43.55.160;                                                                                                              
                (9)  lease expenditures under AS 43.55.165;                                                                    
              (10)  adjustments to lease expenditures under                                                                     
     AS 43.55.170;                                                                                                              
              (11)  tax credits applicable or potentially applicable                                                            
     against taxes levied by this chapter.                                                                                      
   * Sec. 54. AS 43.55.895(b) is amended to read:                                                                             
         (b)  A municipal entity subject to taxation because of this                                                            
     section                                                                                                                    
              (1)  is eligible for [ALL] tax credits proportionate to its                                               
     production taxable under AS 43.55.011(e); and                                                                          
              (2)  shall allocate its lease expenditures in proportion                                                      
     to its production taxable under AS 43.55.011(e) [UNDER THIS                                                            
     CHAPTER TO THE SAME EXTENT AS ANY OTHER                                                                                    
     PRODUCER].                                                                                                                 
   * Sec. 55. AS 43.55.900 is amended by adding a new paragraph to                                                            
read:                                                                                                                           
              (26)  "qualified capital expenditure"                                                                             
                  (A)  means, except as otherwise provided in (B) of                                                            
         this paragraph, an expenditure that is a lease expenditure                                                             
         under AS 43.55.165 and is                                                                                              
                       (i)  incurred for geological or geophysical                                                              
              exploration;                                                                                                      
                       (ii)  treated as a capitalized expenditure under 26                                                      
              U.S.C. (Internal Revenue Code), as amended, regardless                                                            
              of elections made under 26 U.S.C. 263(c) (Internal                                                                
              Revenue Code), as amended, and is treated as a                                                                    

2016-05-13                     House Journal                      Page 2868
              capitalized expenditure for federal income tax reporting                                                          
              purposes by the person incurring the expenditure; or                                                              
                       (iii)  treated as a capitalized expenditure under 26                                                     
              U.S.C. (Internal Revenue Code), as amended, regardless                                                            
              of elections made under 26 U.S.C. 263(c) (Internal                                                                
              Revenue Code), as amended, and is eligible to be                                                                  
              deducted as an expense under 26 U.S.C. 263(c) (Internal                                                           
              Revenue Code), as amended;                                                                                        
                  (B)  does not include an expenditure incurred to                                                              
         acquire an asset the cost of previously acquiring which was a                                                          
         lease expenditure under AS 43.55.165 or would have been a                                                              
         lease expenditure under AS 43.55.165 if it had been incurred                                                           
         after March 31, 2006, or that has previously been placed in                                                            
         service in the state; an expenditure to acquire an asset is not                                                        
         excluded under this subparagraph if not more than an                                                                   
         immaterial portion of the asset meets a description under this                                                         
         subparagraph; for purposes of this subparagraph, "asset"                                                               
         includes geological, geophysical, and well data and                                                                    
         interpretations.                                                                                                       
   * Sec. 56. AS 43.70 is amended by adding new sections to read:                                                             
         Sec. 43.70.025. Bond or cash deposit required for an oil or                                                          
     gas business. (a) At the time of applying for a license under this                                                       
     chapter, an applicant engaged in the business of oil or gas                                                                
     exploration, development, or production shall file a surety bond in                                                        
     the amount of $250,000 running to the state, conditioned upon the                                                          
     applicant's promise to pay all                                                                                             
              (1)  taxes and contributions due the state and political                                                          
     subdivisions; and                                                                                                          
              (2)  unsecured creditors furnishing labor or material or                                                          
     renting or supplying equipment to the applicant.                                                                           
         (b)  In lieu of the surety bond required under this section, the                                                       
     applicant may file with the commissioner a cash deposit or other                                                           
     negotiable security acceptable to the commissioner in the amount                                                           
     of $250,000.                                                                                                               
         (c)  The bond required by this section remains in effect until                                                         
     cancelled by action of the surety, the principal, or, if the                                                               
     commissioner finds that the business is producing oil or gas in                                                            
     commercial quantities, by the commissioner.                                                                                
         Sec. 43.70.028. Claims against an oil or gas business. (a) A                                                         
     person having a claim against a person required to file a surety                                                           

2016-05-13                     House Journal                      Page 2869
     bond under AS 43.70.025 because of the failure to pay a liability                                                          
     described in AS 43.70.025(a) may bring suit upon the bond. A                                                               
     copy of the complaint shall be served by registered or certified                                                           
     mail on the commissioner at the time suit is filed, and the                                                                
     commissioner shall maintain a record, available for public                                                                 
     inspection, of all suits commenced. This service on the                                                                    
     commissioner shall constitute service on the surety, and the                                                               
     commissioner shall transmit the complaint or a copy of it to the                                                           
     surety within 72 hours after it is received. The surety on the bond                                                        
     is not liable in an aggregate amount in excess of that named in the                                                        
     bond, but, if claims pending at any one time exceed the amount of                                                          
     the bond, the claims shall be satisfied from the bond in the                                                               
     following order:                                                                                                           
              (1)  material, equipment, and supplies delivered in the                                                           
     state by an unsecured creditor;                                                                                            
              (2)  labor, including employee benefits provided by an                                                            
     unsecured creditor;                                                                                                        
              (3)  taxes and other amounts due to the city and borough,                                                         
     in that order;                                                                                                             
              (4)  repair of public facilities;                                                                                 
              (5)  taxes and other amounts due to the state.                                                                   
         (b)  If a judgment is entered against a cash deposit, the                                                              
     commissioner, upon receipt of a certified copy of a final                                                                  
     judgment, shall pay the judgment from the amount of the deposit                                                            
     in accordance with the priorities set out in (a) of this section.                                                         
         (c)  An action described in (a) of this section may not be                                                             
     commenced on the bond more than three years after the bond's                                                               
     cancellation.                                                                                                              
   * Sec. 57. AS 38.05.180(i); AS 41.09.010, 41.09.020, 41.09.030,                                                            
41.09.090; and AS 43.20.053(j)(4) are repealed January 1, 2017.                                                                 
   * Sec. 58.  AS 43.55.011(j), 43.55.011(k), 43.55.011(m),                                                                   
43.55.011(o), 43.55.023(l), and 43.55.023(n) are repealed January 1,                                                            
2019.                                                                                                                           
   * Sec. 59. AS 43.55.023(a), 43.55.023(o), 43.55.028(i),                                                                    
43.55.075(d)(1), 43.55.165(j), and 43.55.165(k) are repealed                                                                    
January 1, 2022.                                                                                                                
   * Sec. 60. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   
     LEGISLATIVE WORKING GROUP. (a) A legislative working                                                                       
group is established to analyze the Cook Inlet fiscal regime for oil and                                                        

2016-05-13                     House Journal                      Page 2870
gas, review the state's tax structure and rates on oil and gas produced                                                         
south of 68 degrees North latitude, recommend changes to the                                                                    
legislature for consideration during the First Regular Session of the                                                           
Thirtieth Alaska State Legislature, and develop terms for a                                                                     
comprehensive fiscal regime, including                                                                                          
         (1)  a tax structure that accounts for the unique circumstances                                                        
for each oil and gas producing area south of 68 degrees North latitude;                                                         
         (2)  incentives other than direct monetary support from the                                                            
state for the exploration, development, and production of oil and gas                                                           
south of 68 degrees North latitude;                                                                                             
         (3)  consideration of the competitiveness of the area south of                                                         
68 degrees North latitude to attract new oil and gas development;                                                               
         (4)  consideration of the unique market considerations of the                                                          
Cook Inlet sedimentary basin and the need to support energy supply                                                              
security for communities in Southcentral Alaska;                                                                                
         (5)  alternative means of state support for the exploration,                                                           
development, and production of oil and gas in the Cook Inlet                                                                    
sedimentary basin, including loan guarantees or other financial support                                                         
through the Alaska Industrial Development and Export Authority, or                                                              
other state corporation or entity;                                                                                              
         (6) the applicability of the recommended tax structure to gas                                                          
currently subject to AS 43.55.011(o).                                                                                           
     (b)  The recommended changes under (a) of this section may not                                                             
include refundable or deductible tax credits or carried-forward lease                                                           
expenditures.                                                                                                                   
     (c) The working group consists of                                                                                          
         (1) two co-chairs, one of whom is a member of the house of                                                             
representatives appointed by the speaker of the house of                                                                        
representatives, and one of whom is a member of the senate appointed                                                            
by the president of the senate; and                                                                                             
         (2) members appointed by the co-chairs; members must be                                                                
legislators and must include members of the majority and minority                                                               
caucuses.                                                                                                                       
     (d) The co-chairs of the working group may form an advisory                                                                
group to the working group, composed of members who are not                                                                     
legislators and who have expertise and skills to assist in the review and                                                       
development of a new plan for the tax structure and rates on oil and                                                            
gas produced south of 68 degrees North latitude. The members of an                                                              
advisory group may include commissioners or employees of state                                                                  
departments, members of the oil and gas industry or trade associations,                                                         

2016-05-13                     House Journal                      Page 2871
and economists.                                                                                                                 
     (e) The working group may be supported by legislative                                                                      
consultants under contract through the Legislative Budget and Audit                                                             
Committee.                                                                                                                      
   * Sec. 61. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   
     APPLICABILITY. AS 43.20.046(e), as amended by sec. 10 of                                                                   
this Act, AS 43.20.047(e), as amended by sec. 11 of this Act,                                                                   
AS 43.20.053(e), as amended by sec. 12 of this Act, AS 43.55.028(e),                                                            
as amended by sec. 34 of this Act, AS 43.55.028(j), added by sec. 36                                                            
of this Act, and regulations related to a tax credit certificate purchase                                                       
preference for applicants with a workforce of resident workers,                                                                 
adopted under AS 43.55.028(g), as amended by sec. 35 of this Act,                                                               
apply to a purchase applied for on or after the effective date of secs. 10                                                      
- 12 and 34 - 36 of this Act.                                                                                                   
   * Sec. 62. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   
     TRANSITION: WELL LEASE EXPENDITURES. (a)                                                                                   
Notwithstanding the repeal of AS 43.55.023(l) and (n) by sec. 58 of                                                             
this Act, and the amendment to AS 43.55.029(a) by sec. 37 of this Act,                                                          
a taxpayer who incurs a well lease expenditure before the repeal of                                                             
AS 43.55.023(l) and (n) by sec. 58 of this Act that qualifies for a well                                                        
lease expenditure credit under AS 43.55.023(l) may apply for a credit                                                           
or transferable tax credit certificate under AS 43.55.023 and assign the                                                        
tax credit under AS 43.55.029, as those sections read on the day before                                                         
the repeal of AS 43.55.023(l) and (n) by sec. 58 of this Act.                                                                   
     (b) The Department of Revenue may continue to apply and                                                                    
enforce AS 43.55.023(l), as that section read on the day before the                                                             
repeal of AS 43.55.023(l) by sec. 58 of this Act, for well lease                                                                
expenditures incurred before the repeal of AS 43.55.023(l) by sec. 58                                                           
of this Act.                                                                                                                    
   * Sec. 63. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   
     TRANSITION: QUALIFIED CAPITAL EXPENDITURES. (a)                                                                            
Notwithstanding the repeal of AS 43.55.023(a) and (o) by sec. 59 of                                                             
this Act, and the amendments to AS 45.55.023(d) by sec. 25 of this                                                              
Act, AS 43.55.029(a) by sec. 38 of this Act, AS 43.55.030(a) and (e)                                                            
by secs. 39 and 40 of this Act, AS 43.55.165(f) by sec. 49 of this Act,                                                         
and AS 43.55.170(c) by sec. 52 of this Act, a taxpayer who incurs a                                                             
qualified capital expenditure before the repeal of AS 43.55.023(a) and                                                          

2016-05-13                     House Journal                      Page 2872
(o) by sec. 59 of this Act that qualifies for a qualified capital                                                               
expenditure credit under AS 43.55.023(a) may apply for a credit or tax                                                          
credit certificate under AS 43.55.023(d) and, as applicable, assign the                                                         
tax credit under AS 43.55.029, as those sections read on the day before                                                         
the repeal of AS 43.55.023(a) by sec. 59 of this Act.                                                                           
     (b) The Department of Revenue may continue to apply and                                                                    
enforce AS 43.55.023(a) and (o) and 43.55.029, as those sections read                                                           
on the day before the repeal of AS 43.55.023(a) by sec. 59 of this Act,                                                         
for qualified capital expenditures incurred before the repeal of                                                                
AS 43.55.023(a) by sec. 59 of this Act.                                                                                         
   * Sec. 64. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   
     TRANSITION: LEASE EXPENDITURES FOR A CALENDAR                                                                              
YEAR AFTER 2006 AND BEFORE 2010. Notwithstanding                                                                                
AS 43.55.165(a), as amended by sec. 46 of this Act, and the repeal of                                                           
AS 43.55.165(j) and (k) by sec. 59 of this Act, AS 43.55.165(j) and (k)                                                         
apply to a producer's total lease expenditures for a calendar year after                                                        
2006 and before 2010 under AS 43.55.165, as that section read on the                                                            
day before the repeal of AS 43.55.165(j) and (k) by sec. 59 of this Act.                                                        
   * Sec. 65. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   
     TRANSITION: PAYMENT OF TAX; FILING. (a)                                                                                    
Notwithstanding the amendments to AS 43.55.020 by secs. 18 - 21 of                                                              
this Act,                                                                                                                       
         (1) a person subject to tax under AS 43.55 that is required to                                                         
make one or more installment payments of estimated tax or other                                                                 
payments of tax under AS 43.55.020 for production before the                                                                    
effective date of secs. 18 - 21 of this Act shall pay the tax under                                                             
AS 43.55.020, as that section read on the day before the effective date                                                         
of secs. 18 - 21 of this Act;                                                                                                   
         (2) an unpaid amount of an installment payment required                                                                
under AS 43.55.020 for production before the effective date of secs.                                                            
18 - 21 of this Act that is not paid when due bears interest under                                                              
AS 43.55.020, as that section read on the day before the effective date                                                         
of secs. 18 - 21 of this Act;                                                                                                   
         (3) an overpayment of an installment payment required under                                                            
AS 43.55.020 for production before the effective date of secs. 18 - 21                                                          
of this Act bears interest under AS 43.55.020, as that section read on                                                          
the day before the effective date of secs. 18 - 21 of this Act.                                                                 
     (b) The Department of Revenue may continue to apply and                                                                    

2016-05-13                     House Journal                      Page 2873
enforce AS 43.55.020, as that section read on the day before the                                                                
effective date of secs. 18 - 21 of this Act, for a tax or installment                                                           
payment for production before the effective date of secs. 18 - 21 of                                                            
this Act.                                                                                                                       
   * Sec. 66. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   
     TRANSITION: PRODUCTION TAX AND CARRIED-                                                                                    
FORWARD ANNUAL LOSSES. Notwithstanding the repeal of                                                                            
AS 43.55.011(j), (k), (m), and (o) by sec. 58 of this Act, and the                                                              
amendments to AS 43.55.011(e) and (f) by secs. 13 and 15 of this Act,                                                           
43.55.160(a) and (e) by secs. 42 and 43 of this Act, and 43.55.165(h)                                                           
by sec. 50 of this Act,                                                                                                         
         (1) for oil and gas produced before the repeal of                                                                      
AS 43.55.011(j), (k), (m), and (o) by sec. 58 of this Act, the                                                                  
production tax and production tax value of that oil and gas shall be                                                            
determined under AS 43.55.011 and 43.55.160, as those sections read                                                             
on the day before the repeal of AS 43.55.011(j), (k), (m), and (o) by                                                           
sec. 58 of this Act;                                                                                                            
         (2) in determining lease expenditures incurred before the                                                              
effective date of sec. 50 of this Act, the Department of Revenue shall                                                          
continue to apply regulations that were adopted under                                                                           
AS 43.55.165(h) that were in effect on the day before the effective                                                             
date of sec. 50 of this Act; and                                                                                                
         (3) a lease expenditure incurred before the effective date of                                                          
sec. 43 of this Act may be used to establish a carried-forward annual                                                           
loss under AS 43.55.160(e), as that subsection read on the day before                                                           
the effective date of sec. 43 of this Act.                                                                                      
   * Sec. 67. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   
     TRANSITION: REGULATIONS. The Department of Revenue                                                                         
and the Department of Natural Resources may adopt regulations                                                                   
necessary to implement the changes made by this Act. The regulations                                                            
take effect under AS 44.62 (Administrative Procedure Act), but not                                                              
before the effective date of the law implemented by the regulation.                                                             
The Department of Revenue shall adopt regulations governing the use                                                             
of tax credits under AS 43.55 for a calendar year for which the                                                                 
applicable tax credit provisions of AS 43.55 differ as between parts of                                                         
the year as a result of this Act.                                                                                               
   * Sec. 68. The uncodified law of the State of Alaska is amended by                                                         
adding a new section to read:                                                                                                   

2016-05-13                     House Journal                      Page 2874
     TRANSITION: RETROACTIVITY OF REGULATIONS.                                                                                  
Notwithstanding any contrary provision of AS 44.62.240,                                                                         
         (1) if the Department of Revenue expressly designates in a                                                             
regulation that the regulation applies retroactively, a regulation                                                              
adopted by the Department of Revenue to implement, interpret, make                                                              
specific, or otherwise carry out this Act may apply retroactively to the                                                        
effective date of the law implemented by the regulation;                                                                        
         (2) if the Department of Natural Resources expressly                                                                   
designates in the regulation that the regulation applies retroactively, a                                                       
regulation adopted by the Department of Natural Resources to                                                                    
implement, interpret, make specific, or otherwise carry out the                                                                 
statutory amendments in this Act affecting the administration of oil                                                            
and gas leases issued under AS 38.05.180(f)(3)(B), (D), or (E), to the                                                          
extent the regulation relates to the treatment of oil and gas production                                                        
taxes in determining net profits under those leases, may apply                                                                  
retroactively to the effective date of the law implemented by the                                                               
regulation.                                                                                                                     
   * Sec. 69. Sections 31, 60, 67, and 68 of this Act take effect                                                             
immediately under AS 01.10.070(c).                                                                                              
   * Sec. 70. Section 22 of this Act takes effect July 1, 2016.                                                               
   * Sec. 71. Sections 13, 15, 18 - 21, 37, 42, 43, 50, 58, 62, 65, and 66                                                    
of this Act take effect January 1, 2019.                                                                                        
   * Sec. 72. Sections 25, 26, 38 - 40, 46, 47, 49, 52, 53, 55, 59, 63, and                                                   
64 of this Act take effect January 1, 2022.                                                                                     
   * Sec. 73. Except as provided in secs. 69 - 72 of this Act, this Act                                                       
takes effect January 1, 2017."                                                                                                  
                                                                                                                                
Representative Seaton moved and asked unanimous consent that                                                                    
Amendment No. 20 be adopted.                                                                                                    
                                                                                                                                
Representative Talerico objected.                                                                                               
                                                                                                                                
Amendment to Amendment No. 20 was offered by Representatives                                                                    
Seaton and Wilson:                                                                                                              
                                                                                                                                
Page 31, line 25 of the amendment, following "year":                                                                        
 Delete "2021"                                                                                                                  
 Insert "2022"                                                                                                                  
                                                                                                                                
                                                                                                                                

2016-05-13                     House Journal                      Page 2875
Representative Seaton moved and asked unanimous consent that                                                                    
Amendment to Amendment No. 20 be adopted.  There being no                                                                       
objection, it was so ordered.                                                                                                   
                                                                                                                                
The question being:  "Shall Amendment No. 20 as amended be                                                                      
adopted?"  The roll was taken with the following result:                                                                        
                                                                                                                                
2d CSHB 247 (RLS)                                                                                                               
Second Reading                                                                                                                  
Amendment No. 20 as amended                                                                                                     
                                                                                                                                
YEAS:  21   NAYS:  16   EXCUSED:  3   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Wilson, Wool, Colver, Drummond, Edgmon, Foster, Gara,                                                                    
Gattis, Guttenberg, Josephson, Kawasaki, Kito, Kreiss-Tomkins,                                                                  
LeDoux, Munoz, Ortiz, Seaton, Spohnholz, Stutes, Tarr, Tuck                                                                     
                                                                                                                                
Nays:  Vazquez, Herron, Hughes, Johnson, Keller, Lynn, Millett,                                                                 
Nageak, Neuman, Olson, Pruitt, Saddler, Talerico, Thompson, Tilton,                                                             
Chenault                                                                                                                        
                                                                                                                                
Excused:  Claman, Hawker, Reinbold                                                                                              
                                                                                                                                
And so, Amendment No. 20 as amended was adopted, and the new                                                                    
title follows:                                                                                                                  
                                                                                                                                
     2d CS FOR HOUSE BILL NO. 247(RLS) am                                                                                       
     "An Act amending the powers of the board of trustees of the                                                                
     Alaska Retirement Management Board to authorize purchase and                                                               
     sale of transferrable tax credit certificates issued in conjunction                                                        
     with the production tax on oil and gas; relating to interest                                                               
     applicable to delinquent tax; relating to the oil and gas production                                                       
     tax, tax payments, and credits; relating to exploration incentive                                                          
     credits; relating to refunds for the gas storage facility tax credit,                                                      
     the liquefied natural gas storage facility tax credit, and the                                                             
     qualified in-state oil refinery infrastructure expenditures tax credit;                                                    
     relating to confidential information status and public record status                                                       
     of information in the possession of the Department of Revenue;                                                             
     relating to oil and gas lease expenditures and production tax                                                              
     credits for municipal entities; requiring a bond or cash deposit                                                           
     with a business license application for an oil or gas business;                                                            
     establishing a legislative working group to study the fiscal regime                                                        

2016-05-13                     House Journal                      Page 2876
     and tax structure and rates for oil and gas produced south of 68                                                           
     degrees North latitude; and providing for an effective date."                                                              
                                                                                                                                
Amendment No. 21 was offered by Representatives Gara, Ortiz,                                                                    
Kawasaki, Drummond, Spohnholz, Guttenberg, Tarr, Josephson,                                                                     
Wool, Tuck, and Kreiss-Tomkins:                                                                                                 
                                                                                                                                
Page 1, line 6, following "interest;" (title amendment):                                                                      
        Insert "relating to the minimum oil and gas production tax"                                                          
                                                                                                                                
Page 5, following line 29:                                                                                                      
     Insert a new bill section to read:                                                                                         
"* Sec. 13. AS 43.55.011(f) is amended to read:                                                                               
         (f)  The levy of tax under (e) of this section for                                                                     
              (1)  oil and gas produced before January 1, 2017                                                              
     [JANUARY 1, 2022], from leases or properties that include land                                                             
     north of 68 degrees North latitude, other than gas subject to (o) of                                                       
     this section, may not be less than                                                                                         
                  (A)  four percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is more than                                                         
         $25;                                                                                                                   
                  (B)  three percent of the gross value at the point of                                                         
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $20                                                          
         but not over $25;                                                                                                      
                  (C)  two percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over                                                              
         $17.50 but not over $20;                                                                                               
                  (D)  one percent of the gross value at the point of                                                           
         production when the average price per barrel for Alaska North                                                          
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is over $15                                                          
         but not over $17.50; or                                                                                                
                  (E)  zero percent of the gross value at the point of                                                          
         production when the average price per barrel for Alaska North                                                          

2016-05-13                     House Journal                      Page 2877
         Slope crude oil for sale on the United States West Coast                                                               
         during the calendar year for which the tax is due is $15 or                                                            
         less; [AND]                                                                                                            
              (2)  oil and gas produced on and after January 1, 2017,                                                       
     but before January 1, 2022, from leases or properties that                                                             
     include land north of 68 degrees North latitude,                                                                       
                  (A)  by a producer that does not qualify under (B)                                                        
         of this paragraph, may not be less than                                                                            
                       (i)  7.5 percent of the gross value at the point                                                     
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
              the tax is due is more than $75;                                                                              
                       (ii)  seven percent of the gross value at the                                                        
              point of production when the average price per barrel                                                         
              for Alaska North Slope crude oil for sale on the United                                                       
              States West Coast during the calendar year for which                                                          
               the tax is due is over $71 but not over $75;                                                                
                       (iii)  six percent of the gross value at the point                                                   
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
               the tax is due is over $63 but not over $71;                                                                
                       (iv)  five percent of the gross value at the point                                                   
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
              the tax is due is over $55 but not over $63; or                                                               
                       (v)  four percent of the gross value at the point                                                    
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
              the tax is due is $55 or less; or                                                                             
                  (B) by a producer that produces less than an                                                              
         average of 15,000 barrels of oil a day, in total, from leases                                                      
         or properties located north of 68 degrees North latitude                                                           
         may not be less than                                                                                               
                       (i)  7.5 percent of the gross value at the point                                                     
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           

2016-05-13                     House Journal                      Page 2878
              States West Coast during the calendar year for which                                                          
              the tax is due is more than $90;                                                                              
                       (ii)  seven percent of the gross value at the                                                        
              point of production when the average price per barrel                                                         
              for Alaska North Slope crude oil for sale on the United                                                       
              States West Coast during the calendar year for which                                                          
               the tax is due is over $86 but not over $90;                                                                
                       (iii)  six percent of the gross value at the point                                                   
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
               the tax is due is over $78 but not over $86;                                                                
                       (iv)  five percent of the gross value at the point                                                   
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
              the tax is due is over $70 but not over $78; or                                                               
                       (v)  four percent of the gross value at the point                                                    
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
              the tax is due is $70 or less; and                                                                            
              (3) oil produced on and after January 1, 2022, from leases                                                    
     or properties that include land north of 68 degrees North latitude,                                                        
                  (A)  by a producer that does not qualify under (B)                                                        
         of this paragraph, may not be less than                                                                            
                       (i)  7.5 [(A) FOUR] percent of the gross value at                                                    
              the point of production when the average price per barrel                                                         
              for Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which the                                                          
              tax is due is more than $75 [$25];                                                                            
                       (ii)  seven [(B) THREE] percent of the gross                                                         
              value at the point of production when the average price                                                           
              per barrel for Alaska North Slope crude oil for sale on the                                                       
              United States West Coast during the calendar year for                                                             
              which the tax is due is over $71 [$20] but not over $75                                                   
              [$25];                                                                                                            
                       (iii)  six percent of the gross value at the point                                                   
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           

2016-05-13                     House Journal                      Page 2879
              States West Coast during the calendar year for which                                                          
               the tax is due is over $63 but not over $71;                                                                
                       (iv)  five percent of the gross value at the point                                                   
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
                the tax is due is over $55 but not over $63                                                                
                  [(C)  TWO PERCENT OF THE GROSS VALUE AT                                                                       
         THE POINT OF PRODUCTION WHEN THE AVERAGE                                                                               
         PRICE PER BARREL FOR ALASKA NORTH SLOPE                                                                                
         CRUDE OIL FOR SALE ON THE UNITED STATES WEST                                                                           
         COAST DURING THE CALENDAR YEAR FOR WHICH                                                                               
         THE TAX IS DUE IS OVER $17.50 BUT NOT OVER $20;                                                                        
                  (D)  ONE PERCENT OF THE GROSS VALUE AT                                                                        
         THE POINT OF PRODUCTION WHEN THE AVERAGE                                                                               
         PRICE PER BARREL FOR ALASKA NORTH SLOPE                                                                                
         CRUDE OIL FOR SALE ON THE UNITED STATES WEST                                                                           
         COAST DURING THE CALENDAR YEAR FOR WHICH                                                                               
         THE TAX IS DUE IS OVER $15 BUT NOT OVER $17.50];                                                                       
         or                                                                                                                     
                       (v)  four [(E) ZERO] percent of the gross value                                                      
              at the point of production when the average price per                                                             
              barrel for Alaska North Slope crude oil for sale on the                                                           
              United States West Coast during the calendar year for                                                             
               which the tax is due is $55 [$15] or less; or                                                           
                  (B)  by a producer that produces less than an                                                             
         average of 15,000 barrels of oil a day, in total, from leases                                                      
         or properties located north of 68 degrees North latitude                                                           
         may not be less than                                                                                               
                       (i)  7.5 percent of the gross value at the point                                                     
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
              the tax is due is more than $90;                                                                              
                       (ii)  seven percent of the gross value at the                                                        
              point of production when the average price per barrel                                                         
              for Alaska North Slope crude oil for sale on the United                                                       
              States West Coast during the calendar year for which                                                          
               the tax is due is over $86 but not over $90;                                                                
                       (iii)  six percent of the gross value at the point                                                   

2016-05-13                     House Journal                      Page 2880
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
               the tax is due is over $78 but not over $86;                                                                
                       (iv)  five percent of the gross value at the point                                                   
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
              the tax is due is over $70 but not over $78; or                                                               
                       (v)  four percent of the gross value at the point                                                    
              of production when the average price per barrel for                                                           
              Alaska North Slope crude oil for sale on the United                                                           
              States West Coast during the calendar year for which                                                          
              the tax is due is $70 or less."                                                                               
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 7, following line 2:                                                                                                       
     Insert a new bill section to read:                                                                                         
"* Sec. 16. AS 43.55.020(a) is amended to read:                                                                               
         (a)  For a calendar year, a producer subject to tax under                                                              
     AS 43.55.011 shall pay the tax as follows:                                                                                 
              (1)  for oil and gas produced before January 1, 2014, 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)  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                                                          

2016-05-13                     House Journal                      Page 2881
              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;                                                                                            
                  (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                                                          
              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 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                                                          

2016-05-13                     House Journal                      Page 2882
         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 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 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                                                             

2016-05-13                     House Journal                      Page 2883
      March 31 of the year following the calendar year of production;                                                          
              (5)  for oil and gas produced on and after January 1, 2014,                                                       
     and before January 1, 2022, 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 (6) 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)  35 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;                                                                            
                  (B)  for oil and gas produced from leases or                                                                  
          properties subject to AS 43.55.011(f), the greatest of                                                               
                       (i)  zero;                                                                                               
                       (ii)  the [ZERO PERCENT, ONE PERCENT,                                                                
              TWO PERCENT, THREE PERCENT, OR FOUR]                                                                              
              percent [, AS] applicable under AS 43.55.011(f) [,] 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)  35 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                                                            

2016-05-13                     House Journal                      Page 2884
              from those leases or properties during the month for                                                              
              which the installment payment is calculated, except that,                                                         
              for the purposes of this calculation, a reduction from the                                                        
              gross value at the point of production may apply for oil                                                          
              and gas subject to AS 43.55.160(f) or (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)  35 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)  35 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; 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;                                                              
              (6)  an amount calculated under (5)(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,                                                        

2016-05-13                     House Journal                      Page 2885
     the amount of taxable oil produced during the month for the                                                                
     amount of taxable oil produced during the calendar year;                                                                   
              (7)  for oil and gas produced on or after January 1, 2022,                                                        
     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; 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 produced from leases or properties that                                                          
         include land north of 68 degrees North latitude, the greatest of                                                       
                       (i)  zero;                                                                                               
                       (ii)  the [ZERO PERCENT, ONE PERCENT,                                                                
              TWO PERCENT, THREE PERCENT, OR FOUR]                                                                              
              percent [,] as applicable under AS 43.55.011(f) [,] of the                                                    
              gross value at the point of production of the oil produced                                                        
              from the leases or properties during the month for which                                                          
              the installment payment is calculated; or                                                                         
                       (iii)  35 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 under AS 43.55.160(h)(1) from the gross value at                                                          
              the point of production of the oil produced from those                                                            
              leases or properties during the month for which the                                                               
              installment payment is calculated, except that, for the                                                           
              purposes of this calculation, a reduction from the gross                                                          
              value at the point of production may apply for oil subject                                                        
              to AS 43.55.160(f) or 43.55.160(f) and (g);                                                                       
                  (B)  for oil produced before or during the last                                                               
         calendar year under AS 43.55.024(b) for which the producer                                                             
         could take a tax credit under AS 43.55.024(a), from leases or                                                          
         properties in the state outside the Cook Inlet sedimentary                                                             
         basin, no part of which is north of 68 degrees North latitude,                                                         
         other than leases or properties subject to AS 43.55.011(p), the                                                        
         greater of                                                                                                             
                       (i)  zero; or                                                                                            
                       (ii)  35 percent multiplied by the remainder                                                             

2016-05-13                     House Journal                      Page 2886
              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 under AS 43.55.160(h)(2) from the gross value at                                                          
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated;                                                                                
                  (C)  for oil and gas produced from leases or                                                                  
         properties subject to AS 43.55.011(p), except as otherwise                                                             
         provided under (8) of this subsection, the sum of                                                                      
                       (i)  35 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 under AS 43.55.160(h)(3) from the gross value at                                                          
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated, but not less than zero;                                                        
              and                                                                                                               
                       (ii)  13 percent of the gross value at the point of                                                      
              production of the gas produced from the leases or                                                                 
              properties during the month, but not less than zero;                                                              
                  (D)  for oil produced from leases or properties in the                                                        
         state, no part of which is north of 68 degrees North latitude,                                                         
         other than leases or properties subject to (B) or (C) of this                                                          
         paragraph, the greater of                                                                                              
                       (i)  zero; or                                                                                            
                       (ii)  35 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 under AS 43.55.160(h)(4) from the gross value at                                                          
              the point of production of the oil produced from the                                                              
              leases or properties during the month for which the                                                               
              installment payment is calculated;                                                                                
                  (E)  for gas produced from each lease or property in                                                          
         the state, other than a lease or property subject to                                                                   
         AS 43.55.011(p), 13 percent of the gross value at the point of                                                         
         production of the gas produced from the lease or property                                                              
         during the month for which the installment payment is                                                                  

2016-05-13                     House Journal                      Page 2887
         calculated, but not less than zero;                                                                                    
              (8)  an amount calculated under (7)(C) of this subsection                                                         
     may not exceed four percent of the gross value at the point of                                                             
     production of the oil and gas produced from leases or properties                                                           
     subject to AS 43.55.011(p) during the month for which the                                                                  
     installment payment is calculated;                                                                                         
              (9)  for purposes of the calculation under (1)(B)(ii),                                                            
     (5)(B)(ii), and (7)(A)(ii) of this subsection, the applicable                                                              
     percentage of the gross value at the point of production is                                                                
     determined under AS 43.55.011(f) [AS 43.55.011(f)(1) OR (2)]                                                           
     but substituting the phrase "month for which the installment                                                               
     payment is calculated" in [AS 43.55.011(f)(1) AND (2)] for the                                                             
     phrase "calendar year for which the tax is due.""                                                                          
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 12, line 28:                                                                                                               
     Delete "sec. 21"                                                                                                           
     Insert "sec. 23"                                                                                                           
                                                                                                                                
Page 15, line 25:                                                                                                               
     Delete "sec. 25"                                                                                                           
     Insert "sec. 27"                                                                                                           
                                                                                                                                
Page 17, line 29:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 31"                                                                                                           
                                                                                                                                
Page 18, line 11:                                                                                                               
     Delete "secs. 29 and 30"                                                                                                   
     Insert "secs. 31 and 32"                                                                                                   
                                                                                                                                
Page 21, line 12:                                                                                                               
     Delete "sec. 35"                                                                                                           
     Insert "sec. 37"                                                                                                           
                                                                                                                                
Page 32, line 28:                                                                                                               
     Delete "sec. 25"                                                                                                           
     Insert "sec. 27"                                                                                                           
                                                                                                                                

2016-05-13                     House Journal                      Page 2888
Page 32, line 29:                                                                                                               
     Delete "sec. 28"                                                                                                           
     Insert "sec. 30"                                                                                                           
                                                                                                                                
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     Delete "sec. 27"                                                                                                           
     Insert "sec. 29"                                                                                                           
                                                                                                                                
Page 33, line 1:                                                                                                                
     Delete "secs. 25, 27, and 28"                                                                                              
     Insert "secs. 27, 29, and 30"                                                                                              
                                                                                                                                
Page 33, line 2:                                                                                                                
     Delete "sec. 39"                                                                                                           
     Insert "sec. 41"                                                                                                           
                                                                                                                                
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     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
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     Delete "sec. 16"                                                                                                           
     Insert "sec. 18"                                                                                                           
     Delete "sec. 29"                                                                                                           
     Insert "sec. 31"                                                                                                           
                                                                                                                                
Page 33, line 9:                                                                                                                
     Delete "secs. 32 and 33"                                                                                                   
     Insert "secs. 34 and 35"                                                                                                   
     Delete "sec. 41"                                                                                                           
     Insert "sec. 43"                                                                                                           
                                                                                                                                
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     Insert "sec. 44"                                                                                                           
                                                                                                                                
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     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                

2016-05-13                     House Journal                      Page 2889
Page 33, lines 14 - 15:                                                                                                         
     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
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     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
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     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
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     Delete "sec. 50"                                                                                                           
     Insert "sec. 52"                                                                                                           
                                                                                                                                
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     Delete "sec. 30"                                                                                                           
     Insert "sec. 32"                                                                                                           
                                                                                                                                
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     Delete "sec. 50"                                                                                                           
     Insert "sec. 52"                                                                                                           
                                                                                                                                
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     Delete "sec. 50"                                                                                                           
     Insert "sec. 52"                                                                                                           
                                                                                                                                
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     Delete "sec. 50"                                                                                                           
     Insert "sec. 52"                                                                                                           
                                                                                                                                
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     Delete "sec. 50"                                                                                                           
     Insert "sec. 52"                                                                                                           
                                                                                                                                
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     Delete "sec. 51"                                                                                                           
     Insert "sec. 53"                                                                                                           
                                                                                                                                

2016-05-13                     House Journal                      Page 2890
Page 34, line 6:                                                                                                                
     Delete "sec. 31"                                                                                                           
     Insert "sec. 33"                                                                                                           
     Delete "sec. 34"                                                                                                           
     Insert "sec. 36"                                                                                                           
                                                                                                                                
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     Delete "sec. 36"                                                                                                           
     Insert "sec. 38"                                                                                                           
                                                                                                                                
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     Delete "sec. 51"                                                                                                           
     Insert "sec. 53"                                                                                                           
                                                                                                                                
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     Delete "sec. 51"                                                                                                           
     Insert "sec. 53"                                                                                                           
                                                                                                                                
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     Delete "sec. 51"                                                                                                           
     Insert "sec. 53"                                                                                                           
                                                                                                                                
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     Delete "sec. 51"                                                                                                           
     Insert "sec. 53"                                                                                                           
                                                                                                                                
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     Delete "sec. 51"                                                                                                           
     Insert "sec. 53"                                                                                                           
                                                                                                                                
Page 34, line 21:                                                                                                               
     Delete "sec. 22"                                                                                                           
     Insert "sec. 24"                                                                                                           
     Delete "secs. 24 and 26"                                                                                                   
     Insert "secs. 26 and 28"                                                                                                   
                                                                                                                                
Page 34, line 22:                                                                                                               
     Delete "sec. 31"                                                                                                           
     Insert "sec. 33"                                                                                                           
     Delete "sec. 34"                                                                                                           
     Insert "sec. 36"                                                                                                           

2016-05-13                     House Journal                      Page 2891
Page 34, line 23:                                                                                                               
     Delete "sec. 43"                                                                                                           
     Insert "sec. 45"                                                                                                           
                                                                                                                                
Page 34, line 25:                                                                                                               
     Delete "sec. 51" in both places.                                                                                           
     Insert "sec. 53" in both places.                                                                                           
                                                                                                                                
Page 34, line 30:                                                                                                               
     Delete "sec. 39"                                                                                                           
     Insert "sec. 41"                                                                                                           
                                                                                                                                
Page 34, line 31:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
Page 35, line 3:                                                                                                                
     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
Page 35, line 8:                                                                                                                
     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
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     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
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     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
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     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                
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     Delete "sec. 49"                                                                                                           
     Insert "sec. 51"                                                                                                           
                                                                                                                                

2016-05-13                     House Journal                      Page 2892
Page 36, line 13:                                                                                                               
     Delete "Sections 21, 52, 60, and 61"                                                                                       
     Insert "Sections 23, 54, 62, and 63"                                                                                       
                                                                                                                                
Page 36, line 15:                                                                                                               
     Delete "Sections 30, 50, and 55"                                                                                           
     Insert "Sections 32, 52, and 57"                                                                                           
                                                                                                                                
Page 36, line 16:                                                                                                               
     Delete "Sections 22, 24, 26, 31, 34, 36, 43, 51, 56, and 57"                                                               
     Insert "Sections 24, 26, 28, 33, 36, 38, 45, 53, 58, and 59"                                                               
                                                                                                                                
Page 36, line 18:                                                                                                               
     Delete "secs. 62 - 64"                                                                                                     
     Insert "secs. 64 - 66"                                                                                                     
                                                                                                                                
Representative Gara moved and asked unanimous consent that                                                                      
Amendment No. 21 be adopted.                                                                                                    
                                                                                                                                
Representative Saddler objected.                                                                                                
                                                                                                                                
The question being:  "Shall Amendment No. 21 be adopted?"  The roll                                                             
was taken with the following result:                                                                                            
                                                                                                                                
2d CSHB 247 (RLS) am                                                                                                            
Second Reading                                                                                                                  
Amendment No. 21                                                                                                                
                                                                                                                                
YEAS:  14   NAYS:  21   EXCUSED:  3   ABSENT:  2                                                                              
                                                                                                                                
Yeas:  Wool, Drummond, Edgmon, Foster, Gara, Guttenberg,                                                                        
Josephson, Kawasaki, Kito, Kreiss-Tomkins, Ortiz, Spohnholz, Tarr,                                                              
Tuck                                                                                                                            
                                                                                                                                
Nays:  Wilson, Colver, Gattis, Herron, Hughes, Johnson, Keller, Lynn,                                                           
Millett, Munoz, Nageak, Neuman, Olson, Pruitt, Saddler, Seaton,                                                                 
Stutes, Talerico, Tilton, Vazquez, Chenault                                                                                     
                                                                                                                                
Excused:  Claman, Hawker, Reinbold                                                                                              
                                                                                                                                
Absent:  LeDoux, Thompson                                                                                                       
                                                                                                                                
And so, Amendment No. 21 was not adopted.                                                                                       
                                                                                                                                

2016-05-13                     House Journal                      Page 2893
Amendment No. 22 was offered by Representatives Kawasaki, Tarr,                                                                 
Josephson, Drummond, Tuck, Kito, Guttenberg, Ortiz, Gara, and                                                                   
Spohnholz:                                                                                                                      
                                                                                                                                
Page 1, line 4, following "tax;" (title amendment):                                                                           
     Insert "relating to the minimum oil and gas production tax for                                                           
certain oil and gas;"                                                                                                         
                                                                                                                                
Page 7, following line 2:                                                                                                       
     Insert a new bill section to read:                                                                                         
"* Sec. 15. AS 43.55.019(e) is amended to read:                                                                               
         (e)  The credit under this section may not reduce a person's                                                           
     tax liability for the calendar year under AS 43.55.011(e) to                                                           
     below the amount calculated under AS 43.55.011(f) [ZERO                                                                
     FOR ANY TAX YEAR]. An unused credit or portion of a credit                                                                 
     not used under this section for a tax year may not be sold, traded,                                                        
     transferred, or applied in a subsequent tax year."                                                                         
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 8, following line 5:                                                                                                       
     Insert a new bill section to read:                                                                                         
"* Sec. 17. AS 43.55.023(c) is amended to read:                                                                               
         (c)  A credit or portion of a credit under this section may not                                                        
     be used to reduce a person's tax liability under AS 43.55.011(e)                                                           
     for any calendar year below the amount calculated under                                                                
     AS 43.55.011(f) [ZERO], and any unused credit or portion of a                                                          
     credit not used under this subsection may be applied in a later                                                            
     calendar year."                                                                                                            
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 10, following line 2:                                                                                                      
     Insert new bill sections to read:                                                                                          
"* Sec. 21. 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) 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 the amount                                                          

2016-05-13                     House Journal                      Page 2894
     calculated under AS 43.55.011(f) [ZERO].                                                                               
   * Sec. 22. 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) below the amount calculated under                                                                
     AS 43.55.011(f) [ZERO]."                                                                                               
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 10, line 10:                                                                                                               
     Delete "zero"                                                                                                              
     Insert "the amount calculated under AS 43.55.011(f) [ZERO]"                                                            
                                                                                                                                
Page 12, line 28:                                                                                                               
     Delete "sec. 21"                                                                                                           
     Insert "sec. 25"                                                                                                           
                                                                                                                                
Page 14, following line 24:                                                                                                     
     Insert a new bill section to read:                                                                                         
"* Sec. 28. AS 43.55.025 is amended by adding a new subsection to                                                             
read:                                                                                                                           
         (q)  A credit or portion of a credit under this section may not                                                        
     be used to reduce a person's tax liability under AS 43.55.011(e)                                                           
     for any calendar year below the amount calculated under                                                                    
     AS 43.55.011(f)."                                                                                                          
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 15, line 25:                                                                                                               
     Delete "sec. 25"                                                                                                           
     Insert "sec. 30"                                                                                                           
                                                                                                                                
Page 17, line 29:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 34"                                                                                                           
                                                                                                                                
Page 18, line 11:                                                                                                               
     Delete "secs. 29 and 30"                                                                                                   
     Insert "secs. 34 and 35"                                                                                                   
                                                                                                                                

2016-05-13                     House Journal                      Page 2895
Page 21, line 12:                                                                                                               
     Delete "sec. 35"                                                                                                           
     Insert "sec. 40"                                                                                                           
                                                                                                                                
Page 32, line 28:                                                                                                               
     Delete "sec. 25"                                                                                                           
     Insert "sec. 30"                                                                                                           
                                                                                                                                
Page 32, line 29:                                                                                                               
     Delete "sec. 28"                                                                                                           
     Insert "sec. 33"                                                                                                           
                                                                                                                                
Page 32, line 31:                                                                                                               
     Delete "sec. 27"                                                                                                           
     Insert "sec. 32"                                                                                                           
                                                                                                                                
Page 33, line 1:                                                                                                                
     Delete "secs. 25, 27, and 28"                                                                                              
     Insert "secs. 30, 32, and 33"                                                                                              
                                                                                                                                
Page 33, line 2:                                                                                                                
     Delete "sec. 39"                                                                                                           
     Insert "sec. 44"                                                                                                           
                                                                                                                                
Page 33, line 7:                                                                                                                
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 33, line 8:                                                                                                                
     Delete "sec. 16"                                                                                                           
     Insert "sec. 18"                                                                                                           
     Delete "sec. 29"                                                                                                           
     Insert "sec. 34"                                                                                                           
                                                                                                                                
Page 33, line 9:                                                                                                                
     Delete "secs. 32 and 33"                                                                                                   
     Insert "secs. 37 and 38"                                                                                                   
     Delete "sec. 41"                                                                                                           
     Insert "sec. 46"                                                                                                           
                                                                                                                                

2016-05-13                     House Journal                      Page 2896
Page 33, line 10:                                                                                                               
     Delete "sec. 42"                                                                                                           
     Insert "sec. 47"                                                                                                           
                                                                                                                                
Page 33, line 11:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 33, lines 14 - 15:                                                                                                         
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 33, line 18:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 33, line 19:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 33, line 23:                                                                                                               
     Delete "sec. 50"                                                                                                           
     Insert "sec. 55"                                                                                                           
                                                                                                                                
Page 33, lines 23 - 24:                                                                                                         
     Delete "sec. 30"                                                                                                           
     Insert "sec. 35"                                                                                                           
                                                                                                                                
Page 33, line 25:                                                                                                               
     Delete "sec. 50"                                                                                                           
     Insert "sec. 55"                                                                                                           
                                                                                                                                
Page 33, line 28:                                                                                                               
     Delete "sec. 50"                                                                                                           
     Insert "sec. 55"                                                                                                           
                                                                                                                                
Page 33, line 30:                                                                                                               
     Delete "sec. 50"                                                                                                           
     Insert "sec. 55"                                                                                                           
                                                                                                                                

2016-05-13                     House Journal                      Page 2897
Page 33, line 31:                                                                                                               
     Delete "sec. 50"                                                                                                           
     Insert "sec. 55"                                                                                                           
                                                                                                                                
Page 34, line 5:                                                                                                                
     Delete "sec. 51"                                                                                                           
     Insert "sec. 56"                                                                                                           
                                                                                                                                
Page 34, line 6:                                                                                                                
     Delete "sec. 31"                                                                                                           
     Insert "sec. 36"                                                                                                           
     Delete "sec. 34"                                                                                                           
     Insert "sec. 39"                                                                                                           
                                                                                                                                
Page 34, line 7:                                                                                                                
     Delete "sec. 36"                                                                                                           
     Insert "sec. 41"                                                                                                           
                                                                                                                                
Page 34, line 8:                                                                                                                
     Delete "sec. 51"                                                                                                           
     Insert "sec. 56"                                                                                                           
                                                                                                                                
Page 34, line 12:                                                                                                               
     Delete "sec. 51"                                                                                                           
     Insert "sec. 56"                                                                                                           
                                                                                                                                
Page 34, line 14:                                                                                                               
     Delete "sec. 51"                                                                                                           
     Insert "sec. 56"                                                                                                           
                                                                                                                                
Page 34, line 15:                                                                                                               
     Delete "sec. 51"                                                                                                           
     Insert "sec. 56"                                                                                                           
                                                                                                                                
Page 34, line 20:                                                                                                               
     Delete "sec. 51"                                                                                                           
     Insert "sec. 56"                                                                                                           
                                                                                                                                
                                                                                                                                

2016-05-13                     House Journal                      Page 2898
Page 34, line 21:                                                                                                               
     Delete "sec. 22"                                                                                                           
     Insert "sec. 26"                                                                                                           
     Delete "secs. 24 and 26"                                                                                                   
     Insert "secs. 29 and 31"                                                                                                   
                                                                                                                                
Page 34, line 22:                                                                                                               
     Delete "sec. 31"                                                                                                           
     Insert "sec. 36"                                                                                                           
     Delete "sec. 34"                                                                                                           
     Insert "sec. 39"                                                                                                           
                                                                                                                                
Page 34, line 23:                                                                                                               
     Delete "sec. 43"                                                                                                           
     Insert "sec. 48"                                                                                                           
                                                                                                                                
Page 34, line 25:                                                                                                               
     Delete "sec. 51" in both places.                                                                                           
     Insert "sec. 56" in both places.                                                                                           
                                                                                                                                
Page 34, line 30:                                                                                                               
     Delete "sec. 39"                                                                                                           
     Insert "sec. 44"                                                                                                           
                                                                                                                                
Page 34, line 31:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 35, line 3:                                                                                                                
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 35, line 8:                                                                                                                
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 35, line 10:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                

2016-05-13                     House Journal                      Page 2899
Page 35, line 13:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 35, line 16:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 35, line 18:                                                                                                               
     Delete "sec. 49"                                                                                                           
     Insert "sec. 54"                                                                                                           
                                                                                                                                
Page 36, line 13:                                                                                                               
     Delete "Sections 21, 52, 60, and 61"                                                                                       
     Insert "Sections 25, 57, 65, and 66"                                                                                       
                                                                                                                                
Page 36, line 15:                                                                                                               
     Delete "Sections 30, 50, and 55"                                                                                           
     Insert "Sections 35, 55, and 60"                                                                                           
                                                                                                                                
Page 36, line 16:                                                                                                               
     Delete "Sections 22, 24, 26, 31, 34, 36, 43, 51, 56, and 57"                                                               
     Insert "Sections 26, 29, 31, 36, 39, 41, 48, 56, 61, and 62"                                                               
                                                                                                                                
Page 36, line 18:                                                                                                               
     Delete "secs. 62 - 64"                                                                                                     
     Insert "secs. 67 - 69"                                                                                                     
                                                                                                                                
Representative Kawasaki moved and asked unanimous consent that                                                                  
Amendment No. 22 be adopted.                                                                                                    
                                                                                                                                
Representative Saddler objected.                                                                                                
                                                                                                                                
The question being:  "Shall Amendment No. 22 be adopted?"  The roll                                                             
was taken with the following result:                                                                                            
                                                                                                                                
2d CSHB 247 (RLS) am                                                                                                            
Second Reading                                                                                                                  
Amendment No. 22                                                                                                                
                                                                                                                                
YEAS:  12   NAYS:  25   EXCUSED:  3   ABSENT:  0                                                                              
                                                                                                                                

2016-05-13                     House Journal                      Page 2900
Yeas:  Wool, Drummond, Gara, Guttenberg, Josephson, Kawasaki,                                                                   
Kito, Kreiss-Tomkins, Ortiz, Spohnholz, Tarr, Tuck                                                                              
                                                                                                                                
Nays:  Colver, Edgmon, Foster, Gattis, Herron, Hughes, Johnson,                                                                 
Keller, LeDoux, Lynn, Millett, Munoz, Nageak, Neuman, Olson,                                                                    
Pruitt, Saddler, Seaton, Stutes, Talerico, Thompson, Tilton, Vazquez,                                                           
Wilson, Chenault                                                                                                                
                                                                                                                                
Excused:  Claman, Hawker, Reinbold                                                                                              
                                                                                                                                
And so, Amendment No. 22 was not adopted.                                                                                       
                                                                                                                                
Amendment No. 23 was offered by Representatives Tarr, Kawasaki,                                                                 
Josephson, Wool, Gara, Tuck, Drummond, Spohnholz, Ortiz, Kreiss-                                                                
Tomkins, Guttenberg, and Drummond:                                                                                              
                                                                                                                                
Page 15, line 6:                                                                                                                
     Delete "$75,000,000"                                                                                                   
     Insert "$25,000,000"                                                                                                   
                                                                                                                                
Page 15, line 14:                                                                                                               
     Delete "$75,000,000"                                                                                                   
     Insert "$25,000,000"                                                                                                   
                                                                                                                                
Page 15, line 31:                                                                                                               
     Delete "$75,000,000"                                                                                                       
     Insert "$25,000,000"                                                                                                       
                                                                                                                                
Page 16, line 8:                                                                                                                
     Delete "$75,000,000"                                                                                                       
     Insert "$25,000,000"                                                                                                       
                                                                                                                                
Representative Tarr moved and asked unanimous consent that                                                                      
Amendment No. 23 be adopted.                                                                                                    
                                                                                                                                
Representative Saddler objected.                                                                                                
                                                                                                                                
The question being:  "Shall Amendment No. 23 be adopted?"  The roll                                                             
was taken with the following result:                                                                                            
                                                                                                                                
                                                                                                                                

2016-05-13                     House Journal                      Page 2901
2d CSHB 247 (RLS) am                                                                                                            
Second Reading                                                                                                                  
Amendment No. 23                                                                                                                
                                                                                                                                
YEAS:  12   NAYS:  23   EXCUSED:  3   ABSENT:  2                                                                              
                                                                                                                                
Yeas:  Drummond, Gara, Guttenberg, Josephson, Kawasaki, Kito,                                                                   
Kreiss-Tomkins, Ortiz, Spohnholz, Tarr, Tuck, Wool                                                                              
                                                                                                                                
Nays:  Colver, Edgmon, Foster, Gattis, Herron, Johnson, Keller,                                                                 
LeDoux, Lynn, Millett, Munoz, Nageak, Olson, Pruitt, Saddler,                                                                   
Seaton, Stutes, Talerico, Thompson, Tilton, Vazquez, Wilson,                                                                    
Chenault                                                                                                                        
                                                                                                                                
Excused:  Claman, Hawker, Reinbold                                                                                              
                                                                                                                                
Absent:  Hughes, Neuman                                                                                                         
                                                                                                                                
And so, Amendment No. 23 was not adopted.                                                                                       
                                                                                                                                
Amendment No. 24 was offered by Representatives Tuck and Gara:                                                                  
                                                                                                                                
Page 1, line 6, following "interest;" (title amendment):                                                                      
     Insert "relating to the oil and gas production tax rate;"                                                                
                                                                                                                                
Page 5, following line 29:                                                                                                      
     Insert new bill sections to read:                                                                                          
"* Sec. 13. 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 or for which a tax is levied by AS 43.55.014. Except as                                                           
     otherwise provided under (f), (j), (k), (o), and (p) of this section,                                                      
     for oil and gas produced                                                                                                   
              (1)  before January 1, 2014, the tax is equal to the sum of                                                       
                  (A)  the annual production tax value of the taxable oil                                                       
         and gas as calculated under AS 43.55.160(a)(1) multiplied by                                                           
         25 percent; and                                                                                                        
                  (B)  the sum, over all months of the calendar year, of                                                        
           the tax amounts determined under (g) of this section;                                                               
              (2)  on and after January 1, 2014, and before January 1,                                                      
     2017 [JANUARY 1, 2022], the tax is equal to the annual                                                                 

2016-05-13                     House Journal                      Page 2902
     production tax value of the taxable oil and gas as calculated under                                                        
     AS 43.55.160(a)(1) multiplied by 35 percent;                                                                               
              (3)  on and after January 1, 2017, and before                                                                 
     January 1, 2022, the tax is equal to the sum of                                                                        
                  (A)  the annual production tax value of the taxable                                                       
         oil and gas as calculated under AS 43.55.160(a)(1)                                                                 
         multiplied by 35 percent; and                                                                                      
                  (B)  the sum, over all the months of the calendar                                                         
         year, of the amounts determined under (g) of this section;                                                         
              (4)  on and after January 1, 2022, the tax for                                                               
                  (A)  oil is equal to the sum of                                                                           
                       (i)  the annual production tax value of the taxable                                                  
              oil as calculated under AS 43.55.160(h) multiplied by 35                                                          
              percent; and                                                                                                  
                       (ii)  the sum, over all the months of the                                                            
              calendar year, of the amounts determined under (g) of                                                         
              this section;                                                                                                 
                  (B)  gas is equal to 13 percent of the gross value at                                                         
         the point of production of the taxable gas; if the gross value at                                                      
         the point of production of gas produced from a lease or                                                                
         property is less than zero, that gross value at the point of                                                           
         production is considered zero for purposes of this                                                                     
         subparagraph.                                                                                                          
   * Sec. 14. AS 43.55.011(g) is amended to read:                                                                             
         (g)  For purposes of (e) of this section, the tax amount is                                                        
     determined as follows:                                                                                                 
         (1) before January 1, 2014, for [FOR] each month of a                                                              
     calendar year [BEFORE 2014] 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)(1)(B) of this section is                                                                 
     determined by multiplying the monthly production tax value of                                                              
     the taxable oil and gas produced during the month by the tax rate                                                          
     calculated as follows:                                                                                                     
              (A) [(1)]  if the producer's average monthly production                                                       
     tax value of a 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                                                                                                         

2016-05-13                     House Journal                      Page 2903
              (B) [(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 subparagraph                                                                 
     [PARAGRAPH] may not exceed 50 percent;                                                                                 
              (2) on or after January 1, 2017, 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 $50,                                                         
     the difference between the monthly production tax value of a                                                           
     BTU equivalent barrel and $50 multiplied by the volume of oil                                                          
     and gas produced by the producer for the month multiplied by                                                           
     10 percent."                                                                                                           
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 7, following line 2:                                                                                                       
     Insert a new bill section to read:                                                                                         
"* Sec. 17. AS 43.55.020(a) 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)  for oil and gas produced before January 1, 2014, 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)  the sum of 25 percent and the tax rate                                                             

2016-05-13                     House Journal                      Page 2904
              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 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                                                          
              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 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                                                               

2016-05-13                     House Journal                      Page 2905
              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 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 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                                                         

2016-05-13                     House Journal                      Page 2906
     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;                                                          
              (5)  for oil and gas produced on and after January 1, 2014,                                                       
     and before January 1, 2022, 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 (6) 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 35 percent and the tax rate                                                     
              calculated for the month under AS 43.55.011(g), as                                                            
              applicable, 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;                                                                                
                  (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 35 percent and the tax rate                                                    
              calculated for the month under AS 43.55.011(g), as                                                            
              applicable, multiplied by the remainder obtained by                                                           

2016-05-13                     House Journal                      Page 2907
              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, except that, for the                                                           
              purposes of this calculation, a reduction from the gross                                                          
              value at the point of production may apply for oil and gas                                                        
              subject to AS 43.55.160(f) or (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)  the sum of 35 percent and the tax rate                                                     
              calculated for the month under AS 43.55.011(g), as                                                            
              applicable, 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)  the sum of 35 percent and the tax rate                                                      
              calculated for the month under AS 43.55.011(g), as                                                            
              applicable, 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;                                                        
              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;                                                              

2016-05-13                     House Journal                      Page 2908
              (6)  an amount calculated under (5)(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;                                                                   
              (7)  for oil and gas produced on or after January 1, 2022,                                                        
     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; 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 produced from leases or properties that                                                          
         include land north of 68 degrees North latitude, 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 produced from the                                                           
              leases or properties during the month for which the                                                               
              installment payment is calculated; or                                                                             
                       (iii)  the sum of 35 percent and the tax rate                                                    
              calculated for the month under AS 43.55.011(g), as                                                            
              applicable, 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                                                        
              under AS 43.55.160(h)(1) from the gross value at the                                                              
              point of production of the oil produced from those leases                                                         
              or properties during the month for which the installment                                                          
              payment is calculated, except that, for the purposes of this                                                      
              calculation, a reduction from the gross value at the point                                                        
              of production may apply for oil subject to                                                                        

2016-05-13                     House Journal                      Page 2909
              AS 43.55.160(f) or 43.55.160(f) and (g);                                                                          
                  (B)  for oil produced before or during the last                                                               
         calendar year under AS 43.55.024(b) for which the producer                                                             
         could take a tax credit under AS 43.55.024(a), from leases or                                                          
         properties in the state outside the Cook Inlet sedimentary                                                             
         basin, no part of which is north of 68 degrees North latitude,                                                         
         other than leases or properties subject to AS 43.55.011(p), the                                                        
         greater of                                                                                                             
                       (i)  zero; or                                                                                            
                       (ii)  the sum of 35 percent and the tax rate                                                     
              calculated for the month under AS 43.55.011(g), as                                                            
              applicable, 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                                                        
              under AS 43.55.160(h)(2) from the gross value at the                                                              
              point of production of the oil produced from the leases or                                                        
              properties during the month for which the installment                                                             
              payment is calculated;                                                                                            
                  (C)  for oil and gas produced from leases or                                                                  
         properties subject to AS 43.55.011(p), except as otherwise                                                             
         provided under (8) of this subsection, the sum of                                                                      
                       (i)  the sum of 35 percent and the tax rate                                                      
              calculated for the month under AS 43.55.011(g), as                                                            
              applicable, 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                                                        
              under AS 43.55.160(h)(3) from the gross value at the                                                              
              point of production of the oil produced from the leases or                                                        
              properties during the month for which the installment                                                             
              payment is calculated, but not less than zero; and                                                                
                       (ii)  13 percent of the gross value at the point of                                                      
              production of the gas produced from the leases or                                                                 
              properties during the month, but not less than zero;                                                              
                  (D)  for oil produced from leases or properties in the                                                        
         state, no part of which is north of 68 degrees North latitude,                                                         
         other than leases or properties subject to (B) or (C) of this                                                          
         paragraph, the greater of                                                                                              
                       (i)  zero; or                                                                                            

2016-05-13                     House Journal                      Page 2910
                       (ii)  the sum of 35  percent and the tax rate                                                    
              calculated for the month under AS 43.55.011(g), as                                                            
              applicable, 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                                                        
              under AS 43.55.160(h)(4) from the gross value at the                                                              
              point of production of the oil produced from the leases or                                                        
              properties during the month for which the installment                                                             
              payment is calculated;                                                                                            
                  (E)  for gas produced from each lease or property in                                                          
         the state, other than a lease or property subject to                                                                   
         AS 43.55.011(p), 13 percent of the gross value at the point of                                                         
         production of the gas produced from the lease or property                                                              
         during the month for which the installment payment is                                                                  
         calculated, but not less than zero;                                                                                    
              (8)  an amount calculated under (7)(C) of this subsection                                                         
     may not exceed four percent of the gross value at the point of                                                             
     production of the oil and gas produced from leases or properties                                                           
     subject to AS 43.55.011(p) during the month for which the                                                                  
     installment payment is calculated;                                                                                         
              (9)  for purposes of the calculation under (1)(B)(ii),                                                            
     (5)(B)(ii), and (7)(A)(ii) of this subsection, the applicable                                                              
     percentage of the gross value at the point of production is                                                                
     determined under AS 43.55.011(f)(1) or (2) but substituting the                                                            
     phrase "month for which the installment payment is calculated" in                                                          
     AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which                                                         
     the tax is due.""                                                                                                          
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 12, line 28:                                                                                                               
     Delete "sec. 21"                                                                                                           
     Insert "sec. 24"                                                                                                           
                                                                                                                                
Page 15, line 25:                                                                                                               
     Delete "sec. 25"                                                                                                           
     Insert "sec. 28"                                                                                                           
                                                                                                                                
                                                                                                                                

2016-05-13                     House Journal                      Page 2911
Page 17, line 29:                                                                                                               
     Delete "sec. 29"                                                                                                           
     Insert "sec. 32"                                                                                                           
                                                                                                                                
Page 18, line 11:                                                                                                               
     Delete "secs. 29 and 30"                                                                                                   
     Insert "secs. 32 and 33"                                                                                                   
                                                                                                                                
Page 21, line 12:                                                                                                               
     Delete "sec. 35"                                                                                                           
     Insert "sec. 38"                                                                                                           
                                                                                                                                
Page 32, line 28:                                                                                                               
     Delete "sec. 25"                                                                                                           
     Insert "sec. 28"                                                                                                           
                                                                                                                                
Page 32, line 29:                                                                                                               
     Delete "sec. 28"                                                                                                           
     Insert "sec. 31"                                                                                                           
                                                                                                                                
Page 32, line 31:                                                                                                               
     Delete "sec. 27"                                                                                                           
     Insert "sec. 30"                                                                                                           
                                                                                                                                
Page 33, line 1:                                                                                                                
     Delete "secs. 25, 27, and 28"                                                                                              
     Insert "secs. 28, 30, and 31"                                                                                              
                                                                                                                                
Page 33, line 2:                                                                                                                
     Delete "sec. 39"                                                                                                           
     Insert "sec. 42"                                                                                                           
                                                                                                                                
Page 33, line 7:                                                                                                                
     Delete "sec. 49"                                                                                                           
     Insert "sec. 52"                                                                                                           
                                                                                                                                
Page 33, line 8:                                                                                                                
     Delete "sec. 16"                                                                                                           
     Insert "sec. 19"                                                                                                           
     Delete "sec. 29"                                                                                                           
     Insert "sec. 32"                                                                                                           

2016-05-13                     House Journal                      Page 2912
Page 33, line 9:                                                                                                                
     Delete "secs. 32 and 33"                                                                                                   
     Insert "secs. 35 and 36"                                                                                                   
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2016-05-13                     House Journal                      Page 2913
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2016-05-13                     House Journal                      Page 2914
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2016-05-13                     House Journal                      Page 2915
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Representative Tuck moved and asked unanimous consent that                                                                      
Amendment No. 24 be adopted.                                                                                                    
                                                                                                                                
Objection was heard.                                                                                                            
                                                                                                                                
The question being:  "Shall Amendment No. 24 be adopted?"  The roll                                                             
was taken with the following result:                                                                                            
                                                                                                                                
2d CSHB 247 (RLS) am                                                                                                            
Second Reading                                                                                                                  
Amendment No. 24                                                                                                                
                                                                                                                                
YEAS:  12   NAYS:  25   EXCUSED:  3   ABSENT:  0                                                                              
                                                                                                                                

2016-05-13                     House Journal                      Page 2916
Yeas:  Drummond, Gara, Guttenberg, Josephson, Kawasaki, Kito,                                                                   
Kreiss-Tomkins, Ortiz, Spohnholz, Tarr, Tuck, Wool                                                                              
                                                                                                                                
Nays:  Colver, Edgmon, Foster, Gattis, Herron, Hughes, Johnson,                                                                 
Keller, LeDoux, Lynn, Millett, Munoz, Nageak, Neuman, Olson,                                                                    
Pruitt, Saddler, Seaton, Stutes, Talerico, Thompson, Tilton, Vazquez,                                                           
Wilson, Chenault                                                                                                                
                                                                                                                                
Excused:  Hawker, Reinbold, Claman                                                                                              
                                                                                                                                
And so, Amendment No. 24 was not adopted.                                                                                       
                                                                                                                                
Amendment No. 25 was offered by Representatives Josephson, Tarr,                                                                
Wool, Gara, Kawasaki, and Tuck:                                                                                                 
                                                                                                                                
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Representative Josephson moved and asked unanimous consent that                                                                 
Amendment No. 25 be adopted.                                                                                                    
                                                                                                                                
Objection was heard.                                                                                                            
                                                                                                                                
The question being:  "Shall Amendment No. 25 be adopted?"  The roll                                                             
was taken with the following result:                                                                                            
                                                                                                                                
                                                                                                                                

2016-05-13                     House Journal                      Page 2917
2d CSHB 247 (RLS) am                                                                                                            
Second Reading                                                                                                                  
Amendment No. 25                                                                                                                
                                                                                                                                
YEAS:  12   NAYS:  25   EXCUSED:  3   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Drummond, Gara, Guttenberg, Josephson, Kawasaki, Kito,                                                                   
Kreiss-Tomkins, Ortiz, Spohnholz, Tarr, Tuck, Wool                                                                              
                                                                                                                                
Nays:  Edgmon, Foster, Gattis, Herron, Hughes, Johnson, Keller,                                                                 
LeDoux, Lynn, Millett, Munoz, Nageak, Neuman, Olson, Pruitt,                                                                    
Saddler, Seaton, Stutes, Talerico, Thompson, Tilton, Vazquez, Wilson,                                                           
Colver, Chenault                                                                                                                
                                                                                                                                
Excused:  Hawker, Reinbold, Claman                                                                                              
                                                                                                                                
And so, Amendment No. 25 was not adopted.                                                                                       
                                                                                                                                
2d CSHB 247(RLS) am was automatically in third reading.                                                                         
                                                                                                                                
The question being:  "Shall 2d CSHB 247(RLS) am pass the House?"                                                                
The roll was taken with the following result:                                                                                   
                                                                                                                                
2d CSHB 247 (RLS) am                                                                                                            
Third Reading                                                                                                                   
Final Passage                                                                                                                   
                                                                                                                                
YEAS:  25   NAYS:  12   EXCUSED:  3   ABSENT:  0                                                                              
                                                                                                                                
Yeas:  Edgmon, Foster, Gara, Gattis, Guttenberg, Herron, Josephson,                                                             
Kawasaki, Kito, Kreiss-Tomkins, LeDoux, Millett, Munoz, Neuman,                                                                 
Ortiz, Seaton, Spohnholz, Stutes, Tarr, Thompson, Tuck, Wilson,                                                                 
Wool, Colver, Drummond                                                                                                          
                                                                                                                                
Nays:  Hughes, Johnson, Keller, Lynn, Nageak, Olson, Pruitt, Saddler,                                                           
Talerico, Tilton, Vazquez, Chenault                                                                                             
                                                                                                                                
Excused:  Hawker, Reinbold, Claman                                                                                              
                                                                                                                                
And so, 2d CSHB 247(RLS) am passed the House.                                                                                   
                                                                                                                                
Representative Millett moved the effective date clause.                                                                         
                                                                                                                                
The question being:  "Shall the effective date clause be adopted?"  The                                                         
roll was taken with the following result:                                                                                       
                                                                                                                                

2016-05-13                     House Journal                      Page 2918
2d CSHB 247 (RLS) am                                                                                                            
Third Reading                                                                                                                   
Effective Date                                                                                                                  
                                                                                                                                
YEAS:  37   NAYS:  0   EXCUSED:  3   ABSENT:  0                                                                               
                                                                                                                                
Yeas:  Foster, Gara, Gattis, Guttenberg, Herron, Hughes, Johnson,                                                               
Josephson, Kawasaki, Keller, Kito, Kreiss-Tomkins, LeDoux, Lynn,                                                                
Millett, Munoz, Nageak, Neuman, Olson, Ortiz, Pruitt, Saddler,                                                                  
Seaton, Spohnholz, Stutes, Talerico, Tarr, Thompson, Tilton, Tuck,                                                              
Vazquez, Wilson, Wool, Colver, Drummond, Edgmon, Chenault                                                                       
                                                                                                                                
Excused:  Hawker, Reinbold, Claman                                                                                              
                                                                                                                                
And so, the effective date clause was adopted.                                                                                  
                                                                                                                                
2d CSHB 247(RLS) am was referred to the Chief Clerk for                                                                         
engrossment.                                                                                                                    
                                                                                                                                
                           LEGISLATIVE CITATIONS                                                                             
                                                                                                                                
Representative Millett moved and asked unanimous consent that the                                                               
House approve the citations on the calendar.  There being no                                                                    
objection, the following citations were approved and sent to enrolling:                                                         
                                                                                                                                
Honoring - Teagen Tanner and Helmets on Heads                                                                                   
By Representatives Tilton, Hughes, Gattis, Neuman, Colver, Keller,                                                              
Chenault, Claman, Drummond, Edgmon, Foster, Gara, Guttenberg,                                                                   
Hawker, Herron, Johnson, Josephson, Kawasaki, Kito III, Kreiss-                                                                 
Tomkins, LeDoux, Lynn, Millett, Munoz, Nageak, Olson, Ortiz,                                                                    
Pruitt, Saddler, Seaton, Spohnholz, Stutes, Talerico, Tarr, Thompson,                                                           
Tuck, Vazquez, Wilson, Wool; Senators Stoltze, Dunleavy, Huggins                                                                
                                                                                                                                
Honoring - Alaska Military Youth Academy                                                                                        
By Representatives LeDoux, Saddler, Chenault, Claman, Colver,                                                                   
Drummond, Edgmon, Foster, Gara, Gattis, Guttenberg, Hawker,                                                                     
Herron, Hughes, Johnson, Josephson, Kawasaki, Keller, Kito, Kreiss-                                                             
Tomkins, Lynn, Millett, Munoz, Nageak, Neuman, Olson, Ortiz,                                                                    
Pruitt, Seaton, Spohnholz, Stutes, Talerico, Tarr, Thompson, Tilton,                                                            
Tuck, Vazquez, Wilson, Wool                                                                                                     
                                                                                                                                
                                                                                                                                

2016-05-13                     House Journal                      Page 2919
In Memoriam - Delores Calista Rose Espinosa Grumbling                                                                           
By Representatives LeDoux, Chenault, Claman, Colver, Drummond,                                                                  
Edgmon, Foster, Gara, Gattis, Guttenberg, Hawker, Herron, Hughes,                                                               
Johnson, Josephson, Kawasaki, Keller, Kito, Kreiss-Tomkins, Lynn,                                                               
Millett, Munoz, Nageak, Neuman, Olson, Ortiz, Pruitt, Saddler,                                                                  
Seaton, Spohnholz, Stutes, Talerico, Tarr, Thompson, Tilton, Tuck,                                                              
Vazquez, Wilson, Wool; Senator Wielechowski                                                                                     
                                                                                                                                
In Memoriam - Lyle Von Bergen                                                                                                   
By Senator Dunleavy; Representatives Chenault, Claman, Colver,                                                                  
Drummond, Edgmon, Foster, Gara, Gattis, Guttenberg, Hawker,                                                                     
Herron, Hughes, Johnson, Josephson, Kawasaki, Keller, Kito, Kreiss-                                                             
Tomkins, LeDoux, Lynn, Millett, Munoz, Nageak, Neuman, Olson,                                                                   
Ortiz, Pruitt, Saddler, Seaton, Spohnholz, Stutes, Talerico, Tarr,                                                              
Thompson, Tilton, Tuck, Vazquez, Wilson, Wool                                                                                   
                                                                                                                                
                                ENGROSSMENT                                                                                  
                                                                                                                                
HB 247                                                                                                                        
2d CSHB 247(RLS) am was engrossed, signed by the Speaker and                                                                    
Chief Clerk, and transmitted to the Senate for consideration.                                                                   
                                                                                                                                
                               ANNOUNCEMENTS                                                                                 
                                                                                                                                
With appointment of the Conference Committee on the operating                                                                   
budget, Rule 23(d) of the Uniform Rules is in effect as of April 6,                                                             
2016.                                                                                                                           
                                                                                                                                
House committee schedules are published under separate cover.                                                                   
                                                                                                                                
                                ADJOURNMENT                                                                                  
                                                                                                                                
Representative Millett moved and asked unanimous consent that the                                                               
House adjourn until 1:00 p.m., May 15, 2016.  There being no                                                                    
objection, the House adjourned at 5:11 p.m.                                                                                     
                                                                                                                                
                                              Crystaline Jones                                                                  
                                              Chief Clerk