Legislature(2003 - 2004)
05/08/2003 04:03 PM Senate RES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 61-OIL & GAS TAX CREDIT FOR EXPLORATION/DEV CHAIR OGAN informed committee members that the bill contains a 10-year sunset provision. He wrestled with the idea of shortening that timeframe but instead decided to propose an amendment [Amendment 1] that treats the problem in a different manner. Amendment 1 reads as follows. 23-LS0270\S.1 Chenoweth A M E N D M E N T 1 OFFERED IN THE SENATE BY SENATOR OGAN TO: CSHB 61(FIN) Page 4, following line 30: Insert a new bill section to read: "* Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to read: REPORT ON EFFECT OF GAS EXPLORATION AND DEVELOPMENT TAX CREDIT. Not later than November 30, 2008, the Department of Revenue shall prepare and publish a report on the effect of the gas exploration and development tax credit authorized by AS 43.20.043, added by sec. 1 of this Act. The department shall advise the legislature of the availability of the report and, within the first 10 days of the First Regular Session of the Twenty-Sixth Alaska State Legislature, transmit copies of the report to the chairs or co-chairs of the House and Senate Resources Committees and the chairs or co-chairs of the House and Senate Special Committees on Oil and Gas, if established. The report must address (1) the number of successful gas discoveries for which a tax credit is provided under AS 43.20.043; (2) the volume or amount of new gas reserves brought into production for which a tax credit is provided under AS 43.20.043; (3) the total credits allowed under AS 43.20.043 that are applied to the tax liability through the date of preparation of the report; (4) the total credits applied for under AS 43.20.043 that are not yet approved as of the date of preparation of the report; (5) royalties obtained and oil and gas property production taxes paid from new gas production and anticipated from gas production for production for which credits are allowed under AS 43.20.043; and (6) any other information that, in the judgment of the commissioner of revenue, would evaluate the effectiveness of the gas exploration and development tax credit authorized under AS 43.20.043." Renumber the following bill sections accordingly. Page 5, line 1: Delete "sec. 4" Insert "sec. 5" SENATOR WAGONER objected to the adoption of Amendment 1 for the purpose of discussion. CHAIR OGAN explained that Amendment 1 instructs the Department of Revenue (DOR) to provide a report in five years. The report is to contain information specific to items 1 through 6 listed in the amendment. That report will let the legislature know how this program is working out in 5 years from now. He believes that is a better approach than sunsetting the program, which is cause for uncertainty. The report will be delivered to the House and Senate Resources Committee co-chairs and House and Senate Special Committees on Oil and Gas, if established. SENATOR WAGONER withdrew his objection to the adoption of Amendment 1, therefore it was adopted. CHAIR OGAN announced that Mr. Logsdon was available to answer questions. With no questions, he took public testimony. MR. LARRY HOULE, Alaska Support Industry Alliance, stated strong support for this legislation. It is a successful efforts bill, meaning no credits are given for dry holes. The Alliance sees this as the proper role of government and applauds the sponsor for introducing this legislation. [SENATOR LINCOLN arrived.] SENATOR WAGONER moved SCS CSHB 61(RES) from committee with individual recommendations and its zero fiscal note. There being no objection, the motion carried.
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