2018-02-05                     Senate Journal                      Page 1928
SB 176                                                                                                                        
SENATE BILL NO. 176 BY THE SENATE RULES COMMITTEE                                                                               
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
                                                                                                                                
          "An Act establishing the Alaska Tax Credit                                                                            
          Certificate Bond Corporation; relating to purchases                                                                   
          of tax credit certificates; relating to overriding royalty                                                            
          interest agreements; and providing for an effective                                                                   
          date."                                                                                                                
                                                                                                                                
was read the first time and referred to the Resources and Finance                                                               
Committees.                                                                                                                     
                                                                                                                                
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, zero, Department of Natural Resources                                                                       
                                                                                                                                
Governor's transmittal letter dated February 2:                                                                                 
                                                                                                                                
Dear President Kelly:                                                                                                           
                                                                                                                                
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill to create a State corporation                                                            
authorized to issue bonds for the purpose of purchasing oil and gas                                                             
exploration tax credits.                                                                                                        
                                                                                                                                
The passage of legislation last year, HB 111 (CH. 3, SSSLA 17),                                                                 
signaled the end of the State's program to purchase oil and gas tax                                                             
credits. These credits were earned by small producers and explorers;                                                            
major producers have always been ineligible to participate. Since the                                                           
beginning of this program in 2007, Alaska has purchased over $3.5                                                               
billion in these credits, with about $800 million currently in company                                                          
hands awaiting payment. Another $200 million are expected before the                                                            
program is fully terminated. Just as we value our large producers, we                                                           
value these small producers. Some of the most exciting new                                                                      
developments in the past few years are the result of the efforts of these                                                       
new small producers.                                                                                                            
                                                                                                                                
After the downturn in oil prices and the State's budget challenges, the                                                         
State was no longer able to purchase these credits as quickly as they                                                           
were submitted. Since 2016, the State has appropriated funds based on