Legislature(2015 - 2016)BARNES 124

03/22/2016 06:00 PM RESOURCES

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Audio Topic
06:02:04 PM Start
06:02:06 PM HB247
10:30:23 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time --
+= HB 247 TAX;CREDITS;INTEREST;REFUNDS;O & G TELECONFERENCED
Moved CSHB 247(RES) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 22, 2016                                                                                         
                           6:02 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Benjamin Nageak, Co-Chair                                                                                        
Representative David Talerico, Co-Chair                                                                                         
Representative Bob Herron                                                                                                       
Representative Craig Johnson                                                                                                    
Representative Kurt Olson                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Geran Tarr                                                                                                       
Representative Mike Chenault (alternate)                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Hawker, Vice Chair                                                                                          
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 247                                                                                                              
"An Act  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;                                                               
relating  to disclosure  of  oil and  gas  production tax  credit                                                               
information;  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 minimum tax for certain                                                               
oil and gas  production; relating to the  minimum tax calculation                                                               
for monthly  installment payments  of estimated tax;  relating to                                                               
interest  on  monthly  installment  payments  of  estimated  tax;                                                               
relating  to  limitations for  the  application  of tax  credits;                                                               
relating  to  oil and  gas  production  tax credits  for  certain                                                               
losses   and   expenditures;    relating   to   limitations   for                                                               
nontransferable oil and  gas production tax credits  based on oil                                                               
production  and  the  alternative  tax credit  for  oil  and  gas                                                               
exploration;  relating to  purchase  of  tax credit  certificates                                                               
from the oil  and gas tax credit fund; relating  to a minimum for                                                               
gross  value  at  the  point of  production;  relating  to  lease                                                               
expenditures  and tax  credits for  municipal entities;  adding a                                                               
definition   for  "qualified   capital  expenditure";   adding  a                                                               
definition for  "outstanding liability  to the  state"; repealing                                                               
oil  and   gas  exploration  incentive  credits;   repealing  the                                                               
limitation on  the application of  credits against  tax liability                                                               
for  lease   expenditures  incurred   before  January   1,  2011;                                                               
repealing provisions related to  the monthly installment payments                                                               
for  estimated tax  for oil  and gas  produced before  January 1,                                                               
2014;  repealing  the  oil  and gas  production  tax  credit  for                                                               
qualified  capital expenditures  and  certain well  expenditures;                                                               
repealing   the  calculation   for  certain   lease  expenditures                                                               
applicable before January 1,  2011; making conforming amendments;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 247                                                                                                                  
SHORT TITLE: TAX;CREDITS;INTEREST;REFUNDS;O & G                                                                                 
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/19/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/16       (H)       RES, FIN                                                                                               
02/03/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/03/16       (H)       Heard & Held                                                                                           
02/03/16       (H)       MINUTE(RES)                                                                                            
02/05/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/05/16       (H)       -- MEETING CANCELED --                                                                                 
02/10/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/10/16       (H)       Heard & Held                                                                                           
02/10/16       (H)       MINUTE(RES)                                                                                            
02/12/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/12/16       (H)       Heard & Held                                                                                           
02/12/16       (H)       MINUTE(RES)                                                                                            
02/13/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/13/16       (H)       -- MEETING CANCELED --                                                                                 
02/22/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/22/16       (H)       Heard & Held                                                                                           
02/22/16       (H)       MINUTE(RES)                                                                                            
02/24/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/24/16       (H)       Heard & Held                                                                                           
02/24/16       (H)       MINUTE(RES)                                                                                            
02/25/16       (H)       RES AT 8:30 AM BARNES 124                                                                              
02/25/16       (H)       Heard & Held                                                                                           
02/25/16       (H)       MINUTE(RES)                                                                                            
02/25/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/25/16       (H)       Heard & Held                                                                                           
02/25/16       (H)       MINUTE(RES)                                                                                            
02/26/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/26/16       (H)       Heard & Held                                                                                           
02/26/16       (H)       MINUTE(RES)                                                                                            
02/27/16       (H)       RES AT 10:00 AM BARNES 124                                                                             
02/27/16       (H)       Heard & Held                                                                                           
02/27/16       (H)       MINUTE(RES)                                                                                            
02/29/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/29/16       (H)       Heard & Held                                                                                           
02/29/16       (H)       MINUTE(RES)                                                                                            
02/29/16       (H)       RES AT 6:00 PM BARNES 124                                                                              
02/29/16       (H)       Heard & Held                                                                                           
02/29/16       (H)       MINUTE(RES)                                                                                            
03/01/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/01/16       (H)       Heard & Held                                                                                           
03/01/16       (H)       MINUTE(RES)                                                                                            
03/02/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/02/16       (H)       Heard & Held                                                                                           
03/02/16       (H)       MINUTE(RES)                                                                                            
03/02/16       (H)       RES AT 6:00 PM BARNES 124                                                                              
03/02/16       (H)       Heard & Held                                                                                           
03/02/16       (H)       MINUTE(RES)                                                                                            
03/07/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/07/16       (H)       Heard & Held                                                                                           
03/07/16       (H)       MINUTE(RES)                                                                                            
03/07/16       (H)       RES AT 6:00 PM BARNES 124                                                                              
03/07/16       (H)       Heard & Held                                                                                           
03/07/16       (H)       MINUTE(RES)                                                                                            
03/08/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/08/16       (H)       Heard & Held                                                                                           
03/08/16       (H)       MINUTE(RES)                                                                                            
03/09/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/09/16       (H)       Heard & Held                                                                                           
03/09/16       (H)       MINUTE(RES)                                                                                            
03/11/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/11/16       (H)       -- MEETING CANCELED --                                                                                 
03/14/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/14/16       (H)       Heard & Held                                                                                           
03/14/16       (H)       MINUTE(RES)                                                                                            
03/14/16       (H)       RES AT 6:00 PM BARNES 124                                                                              
03/14/16       (H)       Heard & Held                                                                                           
03/14/16       (H)       MINUTE(RES)                                                                                            
03/16/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/16/16       (H)       Scheduled but Not Heard                                                                                
03/18/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/18/16       (H)       Scheduled but Not Heard                                                                                
03/19/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/19/16       (H)       Heard & Held                                                                                           
03/19/16       (H)       MINUTE(RES)                                                                                            
03/21/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/21/16       (H)       Heard & Held                                                                                           
03/21/16       (H)       MINUTE(RES)                                                                                            
03/21/16       (H)       RES AT 6:00 PM BARNES 124                                                                              
03/21/16       (H)       -- MEETING CANCELED --                                                                                 
03/22/16       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/22/16       (H)       RES AT 6:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SUSIE SHUTTS, Attorney                                                                                                          
Legislative Legal Counsel                                                                                                       
Legislative Legal and Research Services                                                                                         
Legislative Affairs Agency                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Answered questions  related  to  proposed                                                             
amendments  to  the proposed  committee  substitute  for HB  247,                                                               
Version P.                                                                                                                      
                                                                                                                                
RENA DELBRIDGE, Staff                                                                                                           
Representative Mike Hawker                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Answered  questions  related to  proposed                                                             
amendments  to  the proposed  committee  substitute  for HB  247,                                                               
Version P.                                                                                                                      
                                                                                                                                
KEN ALPER, Director                                                                                                             
Tax Division                                                                                                                    
Department of Revenue (DOR)                                                                                                     
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Answered questions  related  to  proposed                                                             
amendments  to  the proposed  committee  substitute  for HB  247,                                                               
Version P.                                                                                                                      
                                                                                                                                
EMILY NAUMAN, Attorney, Legislative Legal Counsel                                                                               
Legislative Legal and Research Services                                                                                         
Legislative Affairs Agency                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Answered questions  related  to  proposed                                                             
amendments  to  the proposed  committee  substitute  for HB  247,                                                               
Version P.                                                                                                                      
                                                                                                                                
MICHAEL HURLEY, Director                                                                                                        
Government Relations and Community Affairs                                                                                      
ConocoPhillips Alaska, Inc.                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:    Answered questions  related  to  proposed                                                             
amendments  to  the proposed  committee  substitute  for HB  247,                                                               
Version P.                                                                                                                      
                                                                                                                                
MARY HUNTER GRAMLING, Assistant Attorney General                                                                                
Natural Resources Section                                                                                                       
Civil Division (Juneau)                                                                                                         
Department of Law (DOL)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Answered questions  related  to  proposed                                                             
amendments  to  the proposed  committee  substitute  for HB  247,                                                               
Version P.                                                                                                                      
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
6:02:04 PM                                                                                                                    
                                                                                                                                
[CO-CHAIR  BENJAMIN NAGEAK  called the  House Resources  Standing                                                             
Committee meeting to order at  6:02 p.m.  Representatives Seaton,                                                               
Josephson,  Tarr, Herron,  Chenault (alternate),  Johnson, Olson,                                                               
Talerico, and Nageak were present at the call to order.]                                                                        
                                                                                                                                
           HB 247-TAX;CREDITS;INTEREST;REFUNDS;O & G                                                                        
                                                                                                                                
6:02:06 PM                                                                                                                    
                                                                                                                                
[CO-CHAIR NAGEAK  announced that  the only  order of  business is                                                               
HOUSE BILL NO. 247, "An  Act 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; relating to disclosure  of oil and gas production                                                               
tax credit information;  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 minimum                                                               
tax for certain  oil and gas production; relating  to the minimum                                                               
tax  calculation for  monthly installment  payments of  estimated                                                               
tax;  relating to  interest on  monthly  installment payments  of                                                               
estimated  tax; relating  to limitations  for the  application of                                                               
tax credits; relating  to oil and gas production  tax credits for                                                               
certain  losses and  expenditures;  relating  to limitations  for                                                               
nontransferable oil and  gas production tax credits  based on oil                                                               
production  and  the  alternative  tax credit  for  oil  and  gas                                                               
exploration;  relating to  purchase  of  tax credit  certificates                                                               
from the oil  and gas tax credit fund; relating  to a minimum for                                                               
gross  value  at  the  point of  production;  relating  to  lease                                                               
expenditures  and tax  credits for  municipal entities;  adding a                                                               
definition   for  "qualified   capital  expenditure";   adding  a                                                               
definition for  "outstanding liability  to the  state"; repealing                                                               
oil  and   gas  exploration  incentive  credits;   repealing  the                                                               
limitation on  the application of  credits against  tax liability                                                               
for  lease   expenditures  incurred   before  January   1,  2011;                                                               
repealing provisions related to  the monthly installment payments                                                               
for  estimated tax  for oil  and gas  produced before  January 1,                                                               
2014;  repealing  the  oil  and gas  production  tax  credit  for                                                               
qualified  capital expenditures  and  certain well  expenditures;                                                               
repealing   the  calculation   for  certain   lease  expenditures                                                               
applicable before January 1,  2011; making conforming amendments;                                                               
and providing for an effective date."]                                                                                          
                                                                                                                                
[Before the committee was the  proposed committee substitute (CS)                                                               
for HB 247, Version 29-GH2609\P,  Shutts, 3/18/16, adopted as the                                                               
working document on 3/19/16.]                                                                                                   
                                                                                                                                
[During  this hearing,  amendments to  Version P  of HB  247 were                                                               
discussed  or  adopted.   Because  of  their length,  the  longer                                                               
amendments are  found at the  end of  the minutes for  this bill.                                                               
The shorter amendments are included in the main text.]                                                                          
                                                                                                                                
6:02:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 17,  labeled                                                               
29-GH2609\P.4, Shutts, 3/19/16, which read:                                                                                     
                                                                                                                                
     Page 3, line 10:                                                                                                           
          Delete "three"                                                                                                        
          Insert "five [THREE]"                                                                                             
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
CO-CHAIR  NAGEAK objected  to the  amendment for  the purpose  of                                                               
discussion.                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  supported Amendment  17, stating that  a 3                                                               
percent interest  rate [above  the Federal  Reserve rate]  is too                                                               
low, 7 percent is too high, and 5 percent seems about right.                                                                    
                                                                                                                                
6:03:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON explained Amendment 17.   He said the 11                                                               
percent interest  rate under Alaska's  Clear and  Equitable Share                                                               
(ACES)  [House Bill  2001, passed  in  2007, Twenty-Fifth  Alaska                                                               
State  Legislature] was  excessive.   However,  he continued,  an                                                               
opportunity  cost is  at  issue  here as  well  as a  sovereignty                                                               
discussion  to  some  degree.   According  to  the  Tax  Division                                                               
director, he  related, the administration's  goal [under  HB 247]                                                               
was  to strike  an  interest rate  that was  closer  to what  the                                                               
permanent fund might earn.   Amendment 17 proposes less than that                                                               
and is  still a friendly industry  rate, that is the  state could                                                               
make more with  its own money doing something else  than it would                                                               
receive  in  interest.   Representative  Josephson  recalled  the                                                               
committee's earlier  discussion [during its 1:00  p.m. hearing on                                                               
HB  247] about  what the  law calls  "scienter," which  basically                                                               
means what is in someone's mind  when thinking about not paying a                                                               
liability and whether  it is an honest dispute  or someone trying                                                               
in his/her  mind to  say he/she  could turn  this into  an honest                                                               
dispute.  He said  he is not going to go  there, but posited that                                                               
both sides  are obviously very  aware of  the interest rate.   He                                                               
offered his agreement  that the statute of  limitations, an issue                                                               
that has  come up  in regard  to the interest  rate, needs  to be                                                               
rectified by the state because it  would help the industry and be                                                               
fair.   But  at  the  same time,  he  continued,  the statute  of                                                               
limitations is  a very  much black  or white kind  of law.   [The                                                               
proposed interest rate in] Amendment  17 would be somewhat fairer                                                               
without being as excessive as was  the ACES number.  Five percent                                                               
is not  punitive, it is  a fair  compromise number, and  it still                                                               
recognizes the proper place of the industry in the state.                                                                       
                                                                                                                                
6:05:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO  noted that  in his  many discussions  with Co-                                                               
Chair  Nageak it  was recognized  that the  12th Federal  Reserve                                                               
District  is a  variable rate  based off  the commercial  banking                                                               
loans that  the Federal Reserve  will make and is  something over                                                               
which  the  state has  no  control.    He  pointed out  that  the                                                               
interest rate would  be the Federal Reserve rate  plus 3 percent.                                                               
The  rate is  variable and  can change  at any  time, so  what is                                                               
really being  looked at is a  rate that someone else  sets plus 3                                                               
percent on top  of that.  He  said he is opposed  to Amendment 17                                                               
because of the  variability in that rate and the  state's lack of                                                               
control over that rate.                                                                                                         
                                                                                                                                
REPRESENTATIVE TARR  offered her support  for Amendment 17.   She                                                               
said she  appreciates the  comments about  the variable  rate and                                                               
the state having  little control over that, but noted  that it is                                                               
cheaper to borrow  money with the low rates.   Amendment 17 tries                                                               
to  strike the  balance between  what kind  of opportunities  are                                                               
provided  at these  different  interest  rates and  consideration                                                               
must be  given as to whether  the state would earn  more if those                                                               
dollars were invested in the state's accounts.                                                                                  
                                                                                                                                
6:08:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  concluded his explanation  of Amendment                                                               
17.   In  regard  to  the co-chairs'  discussion  of the  Federal                                                               
Reserve,  he said  the Tax  Division  director previously  stated                                                               
that the  interest rate is two-way.   So, to the  extent that the                                                               
truth  is found  through the  hearings  process when  there is  a                                                               
contest, both  the industry  and the  state are  risking equally.                                                               
If  the rate  varies it  could impact  the state  as well  if the                                                               
state does  not have a  legitimate position.  He  understood that                                                               
when a  settlement is  achieved it usually  will also  settle the                                                               
interest rate, so that when there is  a meeting of the minds in a                                                               
settlement  over a  disputed issue  related to  these complicated                                                               
tax formulas, they will also generally settle the interest rate.                                                                
                                                                                                                                
6:09:41 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 17.                                                                     
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
Tarr voted  in favor  of Amendment  17.   Representatives Herron,                                                               
Chenault, Johnson, Olson, Talerico,  and Nageak voted against it.                                                               
Therefore, Amendment 17 failed by a vote of 3-6.                                                                                
                                                                                                                                
6:10:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 18,  labeled                                                               
29-GH2609\P.28,  Nauman/Shutts,   3/21/16.    [Amendment   18  is                                                               
provided at the end of the minutes on HB 247.]                                                                                  
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  explained Amendment 18, noting  that in                                                               
virtually every hearing  the subject came up of  trying to invest                                                               
state  dollars in  plays or  developments that  are a  better bet                                                               
than others.   He said Amendment  18 would add a  requirement for                                                               
receiving  credits that  a company  must show  in advance  that a                                                               
project  is  not  feasible  without  the  credit.    He  recalled                                                               
numerous  oil  and  gas  companies  telling  the  committee  that                                                               
without  the well  lease expenditure  [credit]  or the  qualified                                                               
capital  expense credit  they might  go  out of  business and  be                                                               
forced  to leave  Alaska.    If that  is  true,  then instead  of                                                               
repealing  these credits  altogether Amendment  18 would  provide                                                               
for credits  when necessary.   By July 1  of the year  before the                                                               
credit  is  to be  claimed  a  company  must demonstrate  to  the                                                               
commissioner of the  Department of Revenue (DOR),  who would then                                                               
consult  with  the  commissioner  of the  Department  of  Natural                                                               
Resources  (DNR),   and  together   they  would  find   that  the                                                               
activities  qualifying as  a well  lease expenditure  (WLE) or  a                                                               
qualified capital  expenditure (QCE) are  economically infeasible                                                               
without the  credits.  He  conceded that this law  would probably                                                               
need some regulations  to accompany it, but that if  a project is                                                               
feasible  without the  credits then  it is  feasible without  the                                                               
credits.  For example, this came  up in the Caelus Energy Alaska,                                                               
LLC, decision on  royalty relief and in the  Agrium Inc. dispute,                                                               
in which  he took Agrium's  position as  well as Caelus's.   When                                                               
there was  some vetting  and the  case was made  that it  was not                                                               
economical without state assistance, the  state saw the wisdom of                                                               
assisting and that, he said, is what Amendment 18 is about.                                                                     
                                                                                                                                
6:12:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  supported Amendment 18.   She said  it would                                                               
provide an opportunity  to be more careful and  thoughtful in how                                                               
these  credits are  applied so  the  state does  not find  itself                                                               
investing  in projects  that  do  not come  to  fruition and  are                                                               
costly to the state's unrestricted general fund.                                                                                
                                                                                                                                
CO-CHAIR  TALERICO  expressed  his   concern  that  it  would  be                                                               
cumbersome to the  company trying to identify a credit  a year in                                                               
advance  as  well  as  to  the  commissioner  trying  to  make  a                                                               
feasibility judgement  on that particular  credit.   He requested                                                               
the amendment sponsor to explain  how this would function, saying                                                               
this might be a detriment to doing as much work as possible.                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON said the difficulty  he sees is having the                                                               
two commissioners get together with  no end date, because without                                                               
an  end  date  the  commissioners  could run  a  project  out  of                                                               
business  by  not  meeting.   Without  a  required  deadline  for                                                               
approval or  disapproval the commissioners  could deny it  by not                                                               
meeting.  He  argued that this would put a  lot of responsibility                                                               
for the state's resources in the hands of two individuals.                                                                      
                                                                                                                                
6:15:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  concluded his explanation  of Amendment                                                               
18.  He maintained that Amendment  18 does lay out something of a                                                               
schedule on [page  1], lines 14-15.  He said  the amendment would                                                               
result in  more economic analysis  of a  project so there  is not                                                               
this blanket approval  that has been going on and  that will next                                                               
year result in  $825 million of additional outlay  [by the state]                                                               
that  is  without  discretion,  it  just  happens.    While  this                                                               
description might be a little  different for exploration credits,                                                               
he added,  it is mostly not  different and for that  reason he is                                                               
offering Amendment 18.                                                                                                          
                                                                                                                                
6:16:51 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 18.                                                                     
                                                                                                                                
A roll call  vote was taken.  Representatives  Tarr and Josephson                                                               
voted  in  favor  of  Amendment   18.    Representatives  Herron,                                                               
Chenault,  Johnson, Olson,  Seaton,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 18 failed by a vote of 2-7.                                                                   
                                                                                                                                
6:17:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 19,  labeled                                                               
29-GH2609\P.49, Shutts, 3/21/16, which read:                                                                                    
                                                                                                                                
     Page 8, line 23:                                                                                                           
          Delete "$200,000,000"                                                                                             
          Insert "$75,000,000"                                                                                              
                                                                                                                                
     Page 8, line 23, following "person":                                                                                   
          Insert "for each lease"                                                                                           
                                                                                                                                
     Page 8, line 31:                                                                                                           
          Delete "$200,000,000"                                                                                             
          Insert "$75,000,000"                                                                                              
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  explained Amendment 19,  recalling that                                                               
yesterday Mr. Alper reported that  there have been 6 instances of                                                               
a  company  having received  more  than  $100 million  since  the                                                               
credit system began in about 2007,  and 11 instances of a company                                                               
having  received between  $50  million and  $100  million, for  a                                                               
total of  17 instances exceeding  $50 million.   This is  part of                                                               
the concern he  has generally, he said.  If  the state was making                                                               
$10-$12  billion per  year in  production  revenue as  it did  in                                                               
2009, 2010,  and 2011, and maybe  2012, then all things  would be                                                               
possible and  affordable.   However, the  new spring  forecast is                                                               
for a  $1.5 billion  deficit and  this is on  top of  the state's                                                               
other deficit  of about $3.5  billion.  The  committee substitute                                                               
spans  two  years of  spring  forecast.    The new  $1.5  billion                                                               
deficit  means the  tax  credits  really need  to  be reined  in.                                                               
Amendment  19  is an  effort  to  strike  some compromise.    The                                                               
committee has discussed how $200 million  could be a problem in a                                                               
situation like  Armstrong Oil & Gas  Inc.'s Pikka Unit.   At [the                                                               
committee's 1:00 p.m.  hearing today] it was  identified that the                                                               
$200  million  theoretically  would  not be  capped  for  certain                                                               
credits  that  are unlikely  to  apply  for repurchase,  such  as                                                               
refineries, gas storage [facilities],  and [liquefied natural gas                                                               
(LNG)  storage facilities].   Although  the $200  million cap  is                                                               
something, he said,  it is not very limiting and  for that reason                                                               
he is offering Amendment 19.                                                                                                    
                                                                                                                                
6:20:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  expressed his concern with  Amendment 19,                                                               
saying he is  perplexed in that there are a  lot more leases than                                                               
there  are companies.   [By  using the  word "lease"],  a company                                                               
holding  multiple  leases  could  get  to  the  $75  million  cap                                                               
multiple times,  as opposed  to per company  which would  only be                                                               
once.   He asserted that using  the word "lease" would  open this                                                               
up to a very large potential drain of money.                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 19.                                                                     
                                                                                                                                
6:21:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  concluded his explanation  of Amendment                                                               
19, stating that unless there  was a drafting error the intention                                                               
here is  a way  of saying  the entire lease  will only  enjoy $75                                                               
million.  As  written, Version P would prohibit  a single company                                                               
from breaking into, say, five  little companies with each getting                                                               
$200  million, making  this  a $1.2  billion  problem.   However,                                                               
Version P  would not  solve the problem  of partnering.   Drawing                                                               
attention to  the CS,  page 8,  line 23,  he explained  that with                                                               
Amendment 19 the CS would say  a $75 million limit for the entire                                                               
lease in one unit, presumably.                                                                                                  
                                                                                                                                
REPRESENTATIVE TARR  requested it be confirmed  that Amendment 19                                                               
is drafted as stated by the sponsor.                                                                                            
                                                                                                                                
SUSIE  SHUTTS, Attorney,  Legislative Legal  Counsel, Legislative                                                               
Legal and  Research Services, Legislative Affairs  Agency, Alaska                                                               
State Legislature, replied she would  read Amendment 19, lines 5-                                                               
6, to  be from a  person for each lease.   So, she  continued, "a                                                               
lease could have  more than one person that ...  has a tax credit                                                               
certificate purchased, but it would  be each person for one lease                                                               
would be limited."                                                                                                              
                                                                                                                                
6:23:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON,  regarding the explanation by  Ms. Shutts,                                                               
stated that units are composed of  multiple leases.  So, with the                                                               
terminology that is  had, this could be  multiple applications if                                                               
there  were  20 leases  in  an  area  that  was one  field  being                                                               
developed.  He requested Ms. Shutts to confirm if he is correct.                                                                
                                                                                                                                
MS. SHUTTS responded,  "Yes, this would only be  a limitation per                                                               
person per lease."                                                                                                              
                                                                                                                                
REPRESENTATIVE CHENAULT noted that leases  can be made up of many                                                               
leases inside  a field.   So, he surmised, if  he was John  Q Oil                                                               
Company  and he  owned  10  leases inside  a  field  he would  be                                                               
eligible for up to 10 credits if  he chose to take them that way.                                                               
He asked whether his interpretation is correct.                                                                                 
                                                                                                                                
MS. SHUTTS answered correct, it would  be per lease.  So if there                                                               
were 10 leases, then a person  would only be limited for the $200                                                               
million amount per lease.                                                                                                       
                                                                                                                                
REPRESENTATIVE CHENAULT  therefore surmised he could  be eligible                                                               
for up to $2 billion.                                                                                                           
                                                                                                                                
MS.  SHUTTS  replied  correct,  nothing  in  Amendment  19  would                                                               
prohibit that.   It would just  be a limitation per  lease and if                                                               
the person was otherwise eligible.                                                                                              
                                                                                                                                
REPRESENTATIVE JOHNSON inquired whether a  lease can be held by a                                                               
partnership.                                                                                                                    
                                                                                                                                
MS. SHUTTS responded that she was unsure.                                                                                       
                                                                                                                                
REPRESENTATIVE  JOHNSON remarked  that Representative  Chenault's                                                               
question is  germane, but if  there were  partners in a  lease it                                                               
could be multiplied  times two or three, and if  there were three                                                               
partners in each  of those leases as  described by Representative                                                               
Chenault,  it  could be  a  huge  amount.    He said  he  opposes                                                               
Amendment 19 due to this and the lack of clarity.                                                                               
                                                                                                                                
6:27:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON inquired  whether  the committee  would                                                               
entertain an amendment to Amendment 19  that would read on line 6                                                               
of the amendment "for each lease or property".                                                                                  
                                                                                                                                
REPRESENTATIVE  JOSEPHSON withdrew  Amendment  19 upon  committee                                                               
members expressing  their disapproval of this  proposed amendment                                                               
to Amendment 19.                                                                                                                
                                                                                                                                
6:27:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  20, labeled  29-                                                               
GH2609\P.37, Shutts, 3/21/16, which read:                                                                                       
                                                                                                                                
     Page 8, line 23:                                                                                                           
          Delete "$200,000,000"                                                                                             
          Insert "$100,000,000"                                                                                             
                                                                                                                                
     Page 8, line 31:                                                                                                           
          Delete "$200,000,000"                                                                                             
          Insert "$100,000,000"                                                                                             
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE TARR explained  Amendment 20.  She  noted that the                                                               
administration brought forward  HB 247 to look at  what the state                                                               
could afford and  sustain.  The substantially smaller  cap of $25                                                               
million  considered in  the original  version of  the bill  would                                                               
have had a substantial fiscal impact  in the near term.  She said                                                               
she is  concerned that the  $200 million [proposed in  Version P]                                                               
is such  a large amount.   While a big development  is hoped for,                                                               
the  state could  find itself  in  the position  where it  cannot                                                               
reasonably afford the  credits.  If the state  cannot afford this                                                               
today and it  is known the state likely cannot  afford those kind                                                               
of numbers  in the next few  years, does the state  put itself in                                                               
the same  potential for a  difficult situation where  those would                                                               
have to be  carried over to a future year,  causing an unintended                                                               
consequence  of actually  deterring  development?   She said  she                                                               
wants to  ensure the state  has a  reasonable number that  it can                                                               
afford  that does  not result  in  fiscal years  where the  state                                                               
would be  unable to fully pay  that commitment and would  have to                                                               
roll  it   forward,  creating  a   potential  ripple   effect  on                                                               
investment.  While $100 million may  not go very far in the world                                                               
of oil development on the North  Slope, she said it is still much                                                               
more  generous than  the $25  million cap  in the  original bill.                                                               
She posited that this is one  of the areas where the public might                                                               
be most critical of members' actions.                                                                                           
                                                                                                                                
6:31:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON stated  he  is definitely  of the  opinion                                                               
that $200  million is  too high.   However, he  continued, better                                                               
solutions  will be  coming up  in the  amendment process  and for                                                               
this reason he is opposed to Amendment 20.                                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON recalled  that $200 million was  put in to                                                               
protect  the state  against an  outlier, an  elephant field  that                                                               
could  be billions  of dollars.    Whether $200  million or  $100                                                               
million is the  right number he does not know,  but it serves the                                                               
purpose of  keeping the state out  of a huge billion  dollar plus                                                               
liability that  would happen if  there was another  Alpine field.                                                               
He said  he would like  to send  the committee substitute  to the                                                               
House Finance  Committee for that committee  to determine whether                                                               
$200 million is the right number.                                                                                               
                                                                                                                                
6:32:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  concluded her  explanation of  Amendment 20.                                                               
She expressed her  concern that the House  Finance Committee will                                                               
not have  the time  to delve  deeply into the  bill with  only 26                                                               
days left  in the session.   She offered her hope  that the House                                                               
Finance Committee is watching the  conversation of this committee                                                               
and will be able to get up to  speed quickly.  While she does not                                                               
want  to deter  development, she  is having  a hard  time looking                                                               
forward should it continue being  a fiscal impact of $600 million                                                               
or more  and how the state  will be able to  afford that relative                                                               
to other essential state services.   If the state finds itself in                                                               
the situation  where it cannot,  and something must be  done like                                                               
what  was done  with the  [governor's] veto  last year,  then the                                                               
state  may end  up shooting  itself in  the foot.   She  said she                                                               
worries about the  state getting in over its  head and continuing                                                               
to stay there.                                                                                                                  
                                                                                                                                
6:33:56 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 20.                                                                     
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted  in  favor  of  Amendment   20.    Representatives  Herron,                                                               
Chenault,  Johnson, Olson,  Seaton,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 20 failed by a vote of 2-7.                                                                   
                                                                                                                                
6:34:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  withdrew  Amendment  21,  labeled  29-                                                               
GH2609\P.56, Shutts,  3/21/16, but  stated he still  has concerns                                                               
about the outstanding liability issue.                                                                                          
                                                                                                                                
6:35:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  22, labeled  29-                                                               
GH2609\P.38, Shutts, 3/21/16.   [Amendment 22 is  provided at the                                                               
end of the minutes on HB 247.]                                                                                                  
                                                                                                                                
REPRESENTATIVE OLSON objected to the amendment.                                                                                 
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  explained that instead of  adjusting the cap                                                               
from $200  million to $100  million, Amendment 22 would  keep the                                                               
earning  potential  of  $200  million but  would  limit  the  use                                                               
potential to  $100 million in  any calendar year and  anything in                                                               
excess of $100 million would  roll over to the following calendar                                                               
year.   She reiterated  her concern over  the state's  ability to                                                               
realistically afford an  annual credit cost in the  range of $600                                                               
million or more.   She said Amendment 22 is  an attractive option                                                               
because, given  it would  take a very  substantial project  to be                                                               
earning at  that level,  the frequency at  which it  would happen                                                               
will be limited and it is  known from the modeling that this type                                                               
of big  spend is only  going to be  in [a project's]  early years                                                               
during build out.  Under the  amendment there would not be a time                                                               
limit if  it rolled  over to  the next  calendar year  because it                                                               
would be  unlikely it  would continue for  an extended  period of                                                               
time and  would correct  itself within  a window  of a  few years                                                               
after  that.   Thus,  the extraordinarily  generous  cap of  $200                                                               
million per  year would remain  under Amendment 22, but  would be                                                               
limited to the use  of $100 million per year as  way to honor the                                                               
earning of  the credits while  considering the  state's near-term                                                               
financial outlook.                                                                                                              
                                                                                                                                
6:38:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON understood  Amendment 22  would limit  the                                                               
amount of credit  a company could earn in a  year to $200 million                                                               
no matter how much the company spends.                                                                                          
                                                                                                                                
REPRESENTATIVE TARR confirmed that that is correct.                                                                             
                                                                                                                                
REPRESENTATIVE  CHENAULT  asked  whether Amendment  22  would  be                                                               
diluting the value of the tax credits in a given year.                                                                          
                                                                                                                                
REPRESENTATIVE TARR replied she does not  see it in that way.  In                                                               
cases where there is transferability  it would have the potential                                                               
to have somewhat  of an impact there because of  the limit.  But,                                                               
that  is true  of all  the other  credits if  the transferability                                                               
option  is used,  so this  would not  be unique.   The  companies                                                               
would have  the certainty  that they can  earn that  large amount                                                               
but also  there would  be a  limit.   According to  the modeling,                                                               
there would be  a two or three year period  where a company would                                                               
earn like  that; once out  of the  major build years  the company                                                               
would  get into  much  lower credit  earning  scenarios where  it                                                               
would quickly be  able to roll those over into  the next calendar                                                               
year and would retain the value of the credit.                                                                                  
                                                                                                                                
REPRESENTATIVE  CHENAULT surmised  the company  would be  able to                                                               
stack those credits.  He said  he is concerned that if the earner                                                               
only gets  50 cents on  the dollar for the  tax credit and  it is                                                               
sold to  someone else, then  the incentive is not  really meeting                                                               
what the desire was for it to do.                                                                                               
                                                                                                                                
REPRESENTATIVE TARR responded that  there would be the limitation                                                               
in  statute, but  it would  be  the company's  choice whether  to                                                               
transfer the credits.   Should the company choose not  to use the                                                               
transferability option it  would retain 100 percent,  $1 would be                                                               
$1,  it just  would be  carried over  to a  credit earned  in the                                                               
following year.   Because the $200 million cap  is so substantial                                                               
it would,  she allowed, sort  of have the  unintended consequence                                                               
that Representative Chenault might be suggesting.                                                                               
                                                                                                                                
6:41:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  OLSON  asked whether  the  model  referred to  by                                                               
Representative Tarr was distributed to members.                                                                                 
                                                                                                                                
REPRESENTATIVE TARR  replied she  has many  pages of  models that                                                               
the [Department of Revenue] prepared for the committee.                                                                         
                                                                                                                                
REPRESENTATIVE OLSON  requested Representative  Tarr to  copy and                                                               
distribute the model she is referring to.                                                                                       
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 22.                                                                     
                                                                                                                                
REPRESENTATIVE TARR requested  an at-ease so she  could provide a                                                               
copy of the modeling.                                                                                                           
                                                                                                                                
6:42:40 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 6:42 p.m. to 6:47 p.m.                                                                       
                                                                                                                                
6:47:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  noted the  modeling in  question was  in the                                                               
Department  of  Revenue's  (DOR) 2/24/16  presentation  entitled,                                                               
"Additional Modeling and  Scenario Analysis - Part  2," on slides                                                               
27 through about  39 regarding field assumptions  for 750 million                                                               
barrels of  oil.   These slides  show the  example of  peak years                                                               
that  might butt  up to  the $200  million cap  and also  show it                                                               
would be a limited period of time  of about two or three years in                                                               
which those would be rolled over, and then it would be clear.                                                                   
                                                                                                                                
6:48:20 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 22.                                                                     
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted  in  favor  of  Amendment   22.    Representatives  Seaton,                                                               
Johnson, Olson,  Talerico, Nageak,  and Herron voted  against it.                                                               
Therefore, Amendment 22 failed by a vote of 2-6.                                                                                
                                                                                                                                
6:49:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  withdrew  Amendment  23,  labeled  29-                                                               
GH2609\P.23, Shutts, 3/20/16.                                                                                                   
                                                                                                                                
6:49:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  moved Amendment 24,  labeled 29-GH2609\P.39,                                                               
Shutts, 3/21/16, which read:                                                                                                    
                                                                                                                                
     Page 18, line 9, following "legislators":                                                                                  
          Insert "and must include members of the majority                                                                      
     and minority caucuses"                                                                                                     
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE TARR explained Amendment 24.   She pointed out she                                                               
has worked  with a  few pieces of  legislation that  provided for                                                               
task  forces or  working groups  and the  language was  sometimes                                                               
very prescriptive  on who  the members would  be.   The provision                                                               
[in Version  P] is not quite  as prescriptive and leaves  it more                                                               
to the discretion  of the co-chairs [of  the proposed legislative                                                               
working  group].   It  is important  to work  together  in a  bi-                                                               
partisan way through the Cook  Inlet working group, she stressed.                                                               
Making  this minor  improvement to  that working  group structure                                                               
would  be  important  for working  together,  something  that  is                                                               
appreciated by the public.                                                                                                      
                                                                                                                                
6:51:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  stated it is  not critical, but  he thinks                                                               
the  speaker  and  the  president  should  be  consulted  on  the                                                               
appointments of the members by the co-chairs.                                                                                   
                                                                                                                                
REPRESENTATIVE JOHNSON  said every task force  and committee that                                                               
he  has been  associated  with has  had  representation from  the                                                               
majority  and  the minority,  and  he  would anticipate  that  to                                                               
continue.  He  said he will support the  amendment, but qualified                                                               
that he does not think it is needed.                                                                                            
                                                                                                                                
6:52:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  referred to  page 18  of Version  P and                                                               
said he thought  Ms. Delbridge stated during  introduction of the                                                               
CS  that  interested members  of  the  minority caucus  would  be                                                               
represented  through  the president  and  the  speaker and  there                                                               
would not be a place at the table for minority caucus members.                                                                  
                                                                                                                                
RENA DELBRIDGE,  Staff, Representative Mike Hawker,  Alaska State                                                               
Legislature,  replied she  does not  know that  that is  what she                                                               
said.   She  recalled Representative  Tarr had  a question  as to                                                               
whether minority and  majority members would be  engaged and that                                                               
she had  offered her belief  that the co-chairs had  indicated in                                                               
drafting the  CS that  they fully intended  that everyone  in the                                                               
legislature is  able to participate  in a  group like this.   The                                                               
only  prescription is  that the  group would  be led  by two  co-                                                               
chairs,  one appointed  by the  President of  the Senate  and one                                                               
appointed by the Speaker of  the House, and those co-chairs would                                                               
appoint the members of the legislative working group.                                                                           
                                                                                                                                
6:53:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON supported Amendment  24, saying that the                                                               
Senate working group worked very  impressively.  There was a role                                                               
by   the  minority   caucus  and   it  was   filled  by   Senator                                                               
Wielechowski.  Everyone  was very respectful and  a good document                                                               
was produced on 12/1/15.                                                                                                        
                                                                                                                                
CO-CHAIR NAGEAK  commented he thinks  this body is  as respectful                                                               
as the other body.                                                                                                              
                                                                                                                                
REPRESENTATIVE JOSEPHSON said that is his point.                                                                                
                                                                                                                                
REPRESENTATIVE  JOHNSON  quipped that  the  Senate  was not  that                                                               
respectful because  there were  no House  members on  that Senate                                                               
working group and upon asking the  House was told it would not be                                                               
on the group.                                                                                                                   
                                                                                                                                
REPRESENTATIVE CHENAULT noted it  was stated earlier that efforts                                                               
have been  made to try  to include  minority members in  any task                                                               
force and he  does not see that changing.   If Amendment 24 makes                                                               
the minority more comfortable, he said, then he will support it.                                                                
                                                                                                                                
6:55:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  concluded her  explanation of  Amendment 24,                                                               
stating it would  give her constituents an  idea that legislative                                                               
members are  going to  work together  on this,  which would  be a                                                               
positive thing during these challenging times.                                                                                  
                                                                                                                                
CO-CHAIR NAGEAK said  he thinks there has been  fairness and that                                                               
that will continue.                                                                                                             
                                                                                                                                
6:55:46 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO removed his objection to Amendment 24.                                                                        
                                                                                                                                
REPRESENTATIVE JOHNSON objected  in order to put the  vote on the                                                               
record.                                                                                                                         
                                                                                                                                
A  roll call  vote  was taken.    Representatives Olson,  Seaton,                                                               
Josephson, Tarr, Herron, Chenault,  Johnson, Talerico, and Nageak                                                               
voted in favor  of Amendment 24.  Therefore,  Amendment 24 passed                                                               
by a vote of 9-0.                                                                                                               
                                                                                                                                
6:56:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  withdrew  Amendment  25,  labeled  29-                                                               
GH2609\P.9, Nauman,  3/20/16, stating it is  redundant of another                                                               
amendment.                                                                                                                      
                                                                                                                                
6:57:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  26, labeled  29-                                                               
GH2609\P.40, Nauman/Shutts,  3/21/16.  [Amendment 26  is provided                                                               
at the end of the minutes on HB 247.]                                                                                           
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
6:57:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR explained  Amendment 26.  She  noted that the                                                               
original version of HB 247  included a couple of provisions about                                                               
making  information  more available  to  the  public.   She  said                                                               
another amendment will be forthcoming  to address getting at more                                                               
detailed  information related  to tax  records while  being clear                                                               
not  to  violate any  Internal  Revenue  Service (IRS)  rules  or                                                               
antitrust laws.   Amendment 26, however, is much  more generic in                                                               
application.   She pointed out  that page  2, lines 3-10,  of the                                                               
amendment are  very similar  to the  provision in  the governor's                                                               
original bill, although  the format in the  amendment is slightly                                                               
different.  It is basically the  same request for the name of the                                                               
person  claiming  the  credit,   the  aggregate  amount  for  the                                                               
calendar year, and a brief  description to give the Alaska public                                                               
a better  understanding of how  things are  going.  This  has the                                                               
potential to support  the work that is trying  to be accomplished                                                               
with the credits,  she posited.  For example,  in conversing with                                                               
neighbors she has  noticed that they do not  have the opportunity                                                               
to  hear  the  lengthy  conversations that  take  place  in  this                                                               
building and in  some ways there may be mistrust  that may not be                                                               
warranted.  Sharing  this information with the public  in a legal                                                               
way,  while still  protecting the  companies,  could help  bridge                                                               
that  gap and  help  people understand  more.   It  even has  the                                                               
potential for  people to think  that more should be  done because                                                               
these investments  are what is  leading to this activity  and job                                                               
growth and new opportunities can be seen.                                                                                       
                                                                                                                                
6:59:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON supported Amendment  26, saying he wants                                                               
to echo  what was said by  Representative Tarr.  The  cost of the                                                               
credits is  under $700 million this  year and is projected  to be                                                               
under $900  million next year, he  said. As this cost  grows, his                                                               
constituents  are going  to be  asking more  and more  about what                                                               
[the state] is doing and what  [the state] is getting for what it                                                               
is doing.  He maintained there is  a way to disclose the names of                                                               
companies, their aggregate amounts,  and the description of their                                                               
activities without disclosing  proprietary information that would                                                               
violate the IRS  code.  [The credits] have become  such a massive                                                               
part  of  the  state's  portfolio,   third  after  education  and                                                               
healthcare, so  that the questions  from constituents  will grow,                                                               
not  lessen,  and  they  are  entitled  to  know  what  they  are                                                               
investing in.  Thus, Amendment 26 is very important.                                                                            
                                                                                                                                
7:01:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  requested Mr. Alper be  allowed to address                                                               
Amendment 26  and whether DOR would  be able to put  forward this                                                               
information without disclosing taxpayer information.                                                                            
                                                                                                                                
REPRESENTATIVE  TARR  noted that  the  language  in Amendment  26                                                               
comes from Section  8, page 4, lines 25-29, of  the original bill                                                               
and she therefore surmised that the provision was done right.                                                                   
                                                                                                                                
KEN ALPER,  Director, Tax Division, Department  of Revenue (DOR),                                                               
responded that  the structure of  Amendment 26 is  different, the                                                               
legislative drafting put in numbers 1,  2, and 3, but the content                                                               
of what is being  asked for is identical to that  in Section 8 of                                                               
the administration's  original bill.   A concern was  raised that                                                               
if  the [net]  operating loss  credits are  released it  might in                                                               
fact be  disclosing confidential taxpayer information.   However,                                                               
that  is  no  longer  an issue  because  the  [qualified  capital                                                               
expenditure] credit has been retained  at least for the next five                                                               
years, so DOR  thinks that is less of a  problem because there is                                                               
going to be a blended set  of information.  Bringing attention to                                                               
[page 2 of  Amendment 26], line 8, exemption to  the credit in AS                                                               
43.55.024(j), he  noted that this  is the per-barrel credit.   He                                                               
explained that everyone knows how  many barrels were produced and                                                               
everyone knows  what the price of  oil is more or  less, so there                                                               
can be a  back-in to what people got.   If the per-barrel credits                                                               
received  by a  company are  disclosed, it  would be  possible to                                                               
tell how  much a  company received  for its  oil, which  might be                                                               
perceived to  be a  way of backing-in  to the  company's revenue.                                                               
[The department] did  its best to restrict this, but  the goal is                                                               
to make more information available related to these credits.                                                                    
                                                                                                                                
7:03:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO expressed  his concern with page 2,  line 7, of                                                               
Amendment  26, which  states, "a  description  of the  taxpayer's                                                               
activities" and  line 9, which  states, "the aggregate  amount of                                                               
credits".   He  said "the  taxpayer's activities"  sounds to  him                                                               
like  proprietary information  for the  operations of  what these                                                               
folks do  on a regular basis  and he thinks that  they are pretty                                                               
sensitive  to that  information  to operate  their business,  and                                                               
therefore it is a red flag to him.                                                                                              
                                                                                                                                
REPRESENTATIVE  SEATON  requested DOR  be  allowed  to state  the                                                               
meaning of  "taxpayer's activities  that generated  the credits".                                                               
For  example, whether  that description  is  meaning North  Slope                                                               
activity or particular well lease activity.                                                                                     
                                                                                                                                
CO-CHAIR NAGEAK said his understanding  is that "a description of                                                               
the taxpayer's activities" would mean anything.                                                                                 
                                                                                                                                
MR. ALPER  reiterated that  the language in  Amendment 26  is all                                                               
but identical to that proposed in  the original bill.  He said he                                                               
therefore he is comfortable speaking  to what the intent was when                                                               
proposing the original  bill and it is a much  more general sense                                                               
of activities,  such as  "we drilled an  exploration well  in XYZ                                                               
Unit  in  the months  of  May  through September  or  something."                                                               
There is no  desire for a detailed sense  of the minute-to-minute                                                               
or what  the detailed  project was.   That is  the sort  of thing                                                               
that he  would be amenable  to more restrictive language  or that                                                               
DOR  would resolve  in the  regulatory process.   The  department                                                               
only wants  to be able  to give the  type of information  to give                                                               
the public  the sense as  to where  the people's money  is going;                                                               
for  example,  a  credit  was  provided  towards  an  exploration                                                               
project or  a drill  pad or  simply that  there was  an operating                                                               
loss for overall North Slope activities.                                                                                        
                                                                                                                                
REPRESENTATIVE  JOHNSON stated  he has  the utmost  confidence in                                                               
this administration and in Mr.  Alper, but future administrations                                                               
might view  that language as opening  the door to anything.   The                                                               
committee is hopefully coming up  with a document that is durable                                                               
and will  not need to  be revisited, he continued,  and therefore                                                               
he cannot support Amendment 26 as it stands.                                                                                    
                                                                                                                                
7:06:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  concluded her  explanation of  Amendment 26.                                                               
She reiterated  that there  were parts of  the original  bill she                                                               
liked and that is what she worked  from.  She said her thought in                                                               
keeping this  a little more  generic was  to be more  succinct in                                                               
the  statute and  let the  regulations be  more descriptive,  and                                                               
suggested it  may be  slightly more generic  than what  Mr. Alper                                                               
said.   Given her  constituents would  like to  better understand                                                               
exploration,  development, and  production activities,  and their                                                               
associated  costs, she  said it  could be  positive because  many                                                               
times during budget conversations people  are shocked at the cost                                                               
of  things.   These  developments  are  very expensive  and  this                                                               
proposed provision could have the  impact of people having a much                                                               
better understanding and why the  state being a co-investor might                                                               
be necessary  even in tough budget  times.  The good  thing about                                                               
leaving it a little more generic  in the statute and relying on a                                                               
regulatory  process   is  all  the   people  who  do   this  work                                                               
professionally then would  have the opportunity to  work with DOR                                                               
to define in  more detail what that would mean.   Everybody would                                                               
have the  chance to  weigh in through  the public  comment period                                                               
and that  would be the  better way  to inform the  department and                                                               
come  up  with the  detailed  language  that would  outline  what                                                               
information would  become public.   She said her thought  is that                                                               
it would  be a couple-page  document, something that is  easy for                                                               
people to look at.                                                                                                              
                                                                                                                                
7:09:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 26.                                                                     
                                                                                                                                
A roll  call vote  was taken.   Representatives  Josephson, Tarr,                                                               
and  Seaton voted  in  favor of  Amendment  26.   Representatives                                                               
Herron,  Chenault, Johnson,  Olson,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 26 failed by a vote of 3-6.                                                                   
                                                                                                                                
7:10:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  withdrew  Amendment  27,  labeled  29-                                                               
GH2609\P.11, Nauman/Shutts, 3/19/16.                                                                                            
                                                                                                                                
7:10:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 28,  labeled                                                               
29-GH2609\P.54,  Nauman/Shutts,   3/21/16.    [Amendment   28  is                                                               
provided at the end of the minutes on HB 247.]                                                                                  
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON explained  Amendment 28  is about  data                                                               
sharing.   It would  enable the  Department of  Natural Resources                                                               
(DNR)  to  receive seismic  and  downhole  information after  the                                                               
sunset of  the alternative credits for  exploration, which sunset                                                               
in about four  months for the North Slope and  in about six years                                                               
for the Cook  Inlet and Middle Earth.  Between  2004 and 2014, he                                                               
related,  DNR received  725 line  miles of  onshore and  offshore                                                               
two-dimensional (2D) data and around  600 square miles of similar                                                               
three-dimensional  (3D)  data.   Frontier  Basin  explorers  made                                                               
significant contributions  to the  state in exchange  for credits                                                               
by  providing seismic  data to  the State  of Alaska,  along with                                                               
gravity magnetics  and lakebed geochemical surveys.   Current law                                                               
states that to be reimbursed for  seismic and well work under the                                                               
alternative  credit for  exploration, the  applying company  will                                                               
have  its well,  seismic,  and geographic  data  made public  two                                                               
years  after filing  for a  rebate for  well data  and ten  years                                                               
after filing for a rebate for  seismic and geophysical data.  The                                                               
Senate  working   group  in  its   final  report  made   two  key                                                               
recommendations, he said.  One was  about a hard 4 percent floor,                                                               
and the second was about the  importance of disclosure of data to                                                               
the state  for a number of  reasons.  The first  reason stated by                                                               
the  working group  is  that the  proprietary  information is  so                                                               
valuable  that  companies  are likely  to  warehouse  it  without                                                               
moving  the project  forward.    By sharing  it  with the  public                                                               
eventually  other  firms  can  use  it to  develop  oil  and  gas                                                               
resources.   The  second reason  stated by  the working  group is                                                               
that  if a  company  collects  data but  cannot  fully execute  a                                                               
project, another firm  will later be able to  use the information                                                               
so it  does not  go to waste.   The third  stated reason  is that                                                               
when the State  of Alaska actually owns the data  it is a benefit                                                               
because of its high value.   The Senate working group, chaired by                                                               
Senator Giessel, found  it was critical that the  State of Alaska                                                               
get all the seismic and well  data possible, he said, and that is                                                               
what Amendment 28 aims to achieve.                                                                                              
                                                                                                                                
7:13:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  said what he  takes out of  Amendment 28                                                               
is  that  it is  for  all  credits.   He  believed  that the  net                                                               
operating  loss (NOL)  [credit] does  not currently  separate the                                                               
company's  activities for  the  whole year.    For the  qualified                                                               
capital  expense (QCE)  [credit] and  the well  lease expenditure                                                               
(WLE)  [credit],  he  continued,  if  a  company  applies  as  an                                                               
explorer the  company already  has to share  that data  with DNR.                                                               
That is  the data DNR has  to-date and that should  be enough for                                                               
DNR to  use to help  bring others to the  state and to  show what                                                               
great potential is here.  For  well work that is not exploration,                                                               
companies  already   give  data  to   the  Alaska  Oil   and  Gas                                                               
Conservation Commission  (AOGCC) and much of  that information is                                                               
already made  public.   While more information  may be  great, he                                                               
said he thinks  that a number of these issues  being asked for in                                                               
Amendment 28 are already in statute.                                                                                            
                                                                                                                                
REPRESENTATIVE  TARR specified  she is  interested in  this issue                                                               
because in the co-investor relationship  this data is of material                                                               
value and can  help with further development  of Alaska's natural                                                               
resources.   Providing  access  to that  data  makes the  state's                                                               
investment have more  value.  Version P  retained some provisions                                                               
but made  some changed ones,  and therefore she  understands that                                                               
there is  a gap under the  language of Version P.   She suggested                                                               
it  would be  of help  to hear  a response  to what  was said  by                                                               
Representative Chenault.                                                                                                        
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 28.                                                                     
                                                                                                                                
7:15:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  requested  that   Ms.  Delbridge  or  the                                                               
Department of Revenue be allowed to address the aforementioned.                                                                 
                                                                                                                                
MS. DELBRIDGE  confirmed the  alternative credit  for exploration                                                               
expires in  a few  months as  stated by  Representative Josephson                                                               
and offered her  belief that this credit has covered  the bulk of                                                               
exploration work,  also supported by  other credits.   The desire                                                               
to keep  seismic and exploration  data coming to DNR  was clearly                                                               
articulated  by  the department,  she  continued.   The  problem,                                                               
then, is what  credit to use to  access that data.   The NOL does                                                               
not segregate  exploration and other activity;  it simply applies                                                               
to a  company's statewide activities  as a loss.   Companies that                                                               
are  in Middle  Earth keep  getting that  alternative credit  for                                                               
exploration until 2022, she believed,  so some data will continue                                                               
coming from  that.   For companies doing  business in  Cook Inlet                                                               
that  choose to  claim the  AS [43].53.023  QCE credit,  there is                                                               
paragraph  (2)  for  an  explorer to  take  in  conjunction  with                                                               
geological or  geophysical exploration  or in connection  with an                                                               
exploration  well.   They are  bound to  take that  only if  they                                                               
agree in writing  to the terms of .025(f)(2),  which she believes                                                               
is the  same statute that  Representative Josephson  mentioned in                                                               
his amendment.   For  companies that are  interested in  the well                                                               
lease  expenditure  credit, AS  43.55.023(l),  there  is again  a                                                               
paragraph (2)  for an explorer  who may  take a credit  for lease                                                               
expenditures incurred  in the state  south of the North  Slope in                                                               
connection  with that  geological or  geophysical exploration  in                                                               
exploration wells.   Again, if an explorer takes  this credit the                                                               
explorer must agree  in writing to submit that data  to DNR along                                                               
the same  lines of AS  43.55.025(f)(2).   So, she said,  there is                                                               
data that  would still  come to  DNR under  those same  terms for                                                               
exploration  and  geophysical  seismic   work  for  those  people                                                               
working under  the QCE and WLE  credits and also in  Middle Earth                                                               
for the alternative exploration credit.                                                                                         
                                                                                                                                
7:19:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON posed  a scenario  of a  producer drilling                                                               
wells and shooting  seismic within the unit  generating data, and                                                               
noted that  since the  producer has  it under lease  it is  not a                                                               
competitive advantage  or disadvantage.  Using  the net operating                                                               
loss credit  there, or other  credits under .023, seems  like the                                                               
state is basically  buying that data with the  35 percent credits                                                               
or whatever  credits that  are being applied.   He  asked whether                                                               
there is a downside to having this section apply to .023.                                                                       
                                                                                                                                
MS. DELBRIDGE  requested clarification on  whether Representative                                                               
Seaton is talking about exploration  wells in an existing unit or                                                               
simply additional production wells.                                                                                             
                                                                                                                                
REPRESENTATIVE   SEATON   replied   it   is   already   unitized;                                                               
exploration  work  within the  unit,  the  unit is  covering  the                                                               
entire pool.                                                                                                                    
                                                                                                                                
MS.  DELBRIDGE  answered  that for  additional  exploration  work                                                               
within  a  unit,  the  company   essentially  has  a  proprietary                                                               
interest  in how  it chooses  to develop  that and  what kind  of                                                               
potential it  has.  It  might include the addition  of additional                                                               
leases into  a unit  at some  point, they are  working that.   In                                                               
regard  to production  related drilling  for well  activity, once                                                               
something  is  going  the  AOGCC  gets all  that  data  from  the                                                               
producer and  it is  made public on  AOGCC's website  within, she                                                               
believed, 30  days.   So, once a  company is  producing something                                                               
there  is  no  real  proprietary   interest,  but  there  is  not                                                               
necessarily  the   value  to  DNR  in   having  that  information                                                               
available  to promote  the  value  of a  piece  of property  that                                                               
someone  else already  has  claim to  develop.   For  exploration                                                               
activity related  to the NOL,  again the  NOL does not  break out                                                               
exploration  or  any particular  activities,  it  is a  company's                                                               
overall  loss incurred  for  that tax  year.   Hypothetically,  a                                                               
company  could  have  an  NOL that  relates  to  three  different                                                               
properties that it is working in  different parts of Alaska.  She                                                               
imagined that to  segregate certain parts of  that as exploration                                                               
or not part of the NOL could be extraordinarily challenging.                                                                    
                                                                                                                                
7:21:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR pointed  out that  .023, paragraph  (2), and                                                               
.025(f)(2)  are the  exploration components  of the  QCE and  the                                                               
WLE.  She surmised that in  the case of a producer, that producer                                                               
would previously have had to share that data.                                                                                   
                                                                                                                                
MS.  DELBRIDGE  offered her  belief  that  that would  depend  on                                                               
whether the producer applied for one  of those credits and if the                                                               
producer applied for  it as that exploration  credit, given there                                                               
are the  other exploration credits  available on the  North Slope                                                               
and in Cook  Inlet.  The value to DNR  of having that exploration                                                               
data is  for properties that  someone chooses not to  develop and                                                               
then  at  the end  of  10  years DNR  can  make  that public  and                                                               
potentially  attract  other investors  to  look  at those  fields                                                               
since the  rocks don't change.   What is seen out  of those could                                                               
have value 10 years in the  future to someone else with different                                                               
technology and interests.                                                                                                       
                                                                                                                                
7:23:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  noted the  QCEs  would  remain on  the                                                               
books if  Version P stands as  it is through the  process and the                                                               
WLEs would away  (the WLEs are QCEs plus something  more), but he                                                               
is still  concerned about gaps in  the process.  Version  P calls                                                               
for a  gradual elimination of  the well lease expenditure  and he                                                               
does  not  see in  AS  43.55  an  unequivocal statement  like  is                                                               
presented in proposed  subsection (q) of Amendment  28 that would                                                               
say for  all credits,  whether credits come  or credits  go, they                                                               
would  all appear  in AS  43.55.023.   Seismic and  well data  is                                                               
tangible property  interest and cannot be  demanded without being                                                               
paid  for, but  in exchange  for generous  credits the  state can                                                               
command some  strength in requiring  that the data  be delivered.                                                               
Alaska has a  pressing deficit, that deficit changed  in the last                                                               
three or four days, and it  is unknown whether the state is going                                                               
to have  QCEs or well lease  expenditures at the end  of the day.                                                               
It is unknown what the credit  regime will look like exactly, but                                                               
it is known  that it will be  in AS 43.55 and  Amendment 28 would                                                               
cover it so the state would  be guaranteed that it would continue                                                               
to get that data and that there would be no gap in the process.                                                                 
                                                                                                                                
7:25:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 28.                                                                     
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted in favor of Amendment  28.  Representatives Seaton, Herron,                                                               
Chenault, Johnson, Olson, Talerico,  and Nageak voted against it.                                                               
Therefore, Amendment 28 failed by a vote of 2-7.                                                                                
                                                                                                                                
7:26:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   TARR   withdrew   Amendment  29,   labeled   29-                                                               
GH2609\P.45, Shutts, 3/21/16, stating  this amendment was already                                                               
covered under Amendment 2, which was adopted earlier.                                                                           
                                                                                                                                
7:26:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  30, labeled  29-                                                               
GH2609\P.42, Shutts, 3/21/16.   [Amendment 30 is  provided at the                                                               
end of the minutes on HB 247.]                                                                                                  
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR explained  that  Amendment 30  is along  the                                                               
same lines as  the previous amendment and that  the committee had                                                               
some  discussion  about  this  when  it  adopted  [Amendment  2].                                                               
Amendment 2  defined outstanding  liability to  the state  as not                                                               
just  unpaid   delinquent  taxes   but  also   other  outstanding                                                               
liabilities.   Amendment 30  would still  be relevant  because it                                                               
relates  to  delinquent  taxes   as  well  as  other  outstanding                                                               
liabilities.  She said that  when developing Amendment 30 she was                                                               
working from the original version of  the bill, page 4, lines 30-                                                               
31, through page 5, line 29.                                                                                                    
                                                                                                                                
7:28:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  asked  what   the  target  is  for  these                                                               
conforming changes.  For example,  whether the target is in-state                                                               
refineries, liquefied  natural gas  (LNG) storage  facilities, or                                                               
gas storage facilities.                                                                                                         
                                                                                                                                
REPRESENTATIVE TARR  answered, "All three."   While that  was not                                                               
well described  in the  original version of  the bill,  she said,                                                               
Version P included those three.                                                                                                 
                                                                                                                                
REPRESENTATIVE  HERRON   inquired  whether   Representative  Tarr                                                               
believes these are necessary conforming changes.                                                                                
                                                                                                                                
REPRESENTATIVE TARR drew attention to  the language that would be                                                               
replaced under  Amendment 30 and said  the key thing is  that the                                                               
deleted  language   just  has   "unpaid  delinquent   taxes"  and                                                               
Amendment  30   would  say  "outstanding  liability".     So,  in                                                               
reference   to  the   three  particular   credits  mentioned   by                                                               
Representative  Herron,  it  would expand  what  the  outstanding                                                               
liability means  to be  beyond just the  delinquent taxes  and be                                                               
what  Amendment 2  put back  into Version  P, which  is the  same                                                               
definition that was in the original version of the bill.                                                                        
                                                                                                                                
7:30:50 PM                                                                                                                    
                                                                                                                                
[Co-Chair  Talerico's objection  to Amendment  30 was  treated as                                                               
maintained.]                                                                                                                    
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted in favor  of Amendment 30.   Representatives Olson, Herron,                                                               
Chenault,  Johnson, Talerico,  Nageak, and  Seaton voted  against                                                               
it.  Therefore, Amendment 30 failed by a vote of 2-7.                                                                           
                                                                                                                                
7:31:45 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  TALERICO specified  for the  public that  NOL is  a net                                                               
operating loss,  a QCE  is qualified  capital expenditure,  and a                                                               
WLE is a well lease expenditure.                                                                                                
                                                                                                                                
7:32:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   TARR   withdrew   Amendment  31,   labeled   29-                                                               
GH2609\P.41,  Nauman/Shutts,  3/21/16,  stating it  is  the  same                                                               
amendment as Amendment 32.                                                                                                      
                                                                                                                                
7:32:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 32,  labeled                                                               
29-GH2609\P.53,  Nauman/Shutts,   3/21/16.    [Amendment   32  is                                                               
provided at the end of the minutes on HB 247.]                                                                                  
                                                                                                                                
REPRESENTATIVE OLSON objected to the amendment.                                                                                 
                                                                                                                                
7:33:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON explained that,  in effect, Amendment 32                                                               
is an  amendment to  Senate Bill 21  [More Alaska  Production Act                                                               
(MAPA), passed in 2013,  Twenty-Eighth Alaska State Legislature].                                                               
He recalled  that in  [Governor Walker's]  gubernatorial campaign                                                               
prior  to December  2014,  around  the time  the  state began  to                                                               
seriously deficit  spend, the governor  had said he did  not want                                                               
to make  any changes to  Senate Bill 21.   His sense  of Governor                                                               
Walker's  fiscal  plan, he  said,  is  that the  governor  wanted                                                               
everyone to contribute,  so he included in his fiscal  plan a tax                                                               
on  fishing,  cruise  ships  relative to  other  local  taxes  in                                                               
Southeast Alaska, tobacco, mining,  personal income, alcohol, and                                                               
motor fuel, plus a cut to the  permanent fund dividend.  A tax on                                                               
marijuana has been  introduced by a colleague,  not the governor.                                                               
Representative  Josephson   said  he   suspects  that   when  the                                                               
administration was looking at its  fiscal plan, probably sometime                                                               
after July 1 because it took that  long to come up with a budget,                                                               
the administration thought  the oil industry a  major player that                                                               
should  contribute something  as well,  so the  administration is                                                               
recommending an increase to the  floor on gross production from 4                                                               
percent to  5 percent.   As has been  heard before, there  was no                                                               
vetting  or modeling  of oil  prices at  the prices  found today.                                                               
The  governor has  said he  wants everyone  to have  skin in  the                                                               
game.    Amendment  32  is  a $50  million  revenue  measure,  he                                                               
continued,  that is  worth offering  even though  he suspects  it                                                               
will not gain the favor of five members of the committee.                                                                       
                                                                                                                                
7:35:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  supported Amendment  32.   What is  best for                                                               
the state  and the  financial pressure  on the  state is  what is                                                               
guiding her, she  said.  Amendment 32 would make  HB 247 start to                                                               
have  a bigger  impact  and would  be a  good  step forward  when                                                               
combined with  other proposed  measures.   She recalled  that the                                                               
minimum  tax of  Senate  Bill  21 keeps  Alaska  on  the low  end                                                               
relative to  other jurisdictions.   The  state would  remain very                                                               
competitive relative to other areas, she concluded.                                                                             
                                                                                                                                
CO-CHAIR TALERICO asked whether  Amendment 32 would eliminate the                                                               
step-down should oil prices decline below $25.                                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON  responded that  he knows  the step-down                                                               
Co-Chair Talerico is  talking about, but he  thinks the amendment                                                               
just targets today's  price range of $30-$18.  He  allowed he may                                                               
need to "phone a friend" in  this regard.  However, he continued,                                                               
Amendment 32  was not  designed to change  the step-down;  it was                                                               
designed  to  reinstate the  original  bill  and provide  for  an                                                               
increase of the gross floor from 4 percent to 5 percent.                                                                        
                                                                                                                                
7:38:42 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 7:38 p.m. to 7:47 p.m.                                                                       
                                                                                                                                
7:47:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  clarified that  page 2 of  Amendment 32                                                               
does eliminate  the step-down,  so the  amendment would  create a                                                               
hard floor of 5 percent.  He  said he cannot speak to whether the                                                               
amendment  would deal  with deductions  underneath the  5 percent                                                               
for  credits; that  will be  taken up  in other  amendments.   He                                                               
understood that  at current prices  the net operating  loss would                                                               
drive someone's profit beneath zero anyway.                                                                                     
                                                                                                                                
7:48:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON maintained his objection to Amendment 32.                                                                  
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted in favor of Amendment  32.  Representatives Johnson, Olson,                                                               
Seaton, Herron, Chenault, Talerico,  and Nageak voted against it.                                                               
Therefore, Amendment 32 failed by a vote of 2-7.                                                                                
                                                                                                                                
7:49:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 33,  labeled                                                               
29-GH2609\P.27,  Nauman/Shutts,   3/19/16.    [Amendment   33  is                                                               
provided at the end of the minutes on HB 247.]                                                                                  
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
7:49:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON explained  Amendment 33.   He  recalled                                                               
the legislature's  consultant, enalytica,  saying that  in fiscal                                                               
year (FY) 2014 this amendment might  have saved the state as much                                                               
as $100  million.   Amendment 33 would  harden the  [minimum tax]                                                               
floor.   Because  the  floor would  be fixed  at  4 percent,  the                                                               
amendment  would also  disallow  the movement  of per-barrel  tax                                                               
credits  within a  month, which  DOR referred  to as  a migration                                                               
problem.  There  is some foundation for that for  two reasons, he                                                               
said.  One, it appears there  was some inadvertence in not seeing                                                               
this phenomenon.   The  2013 legislature that  looked at  the tax                                                               
regime did not vet the  situation of fluctuating barrels where if                                                               
a company  could not use  all of  its per-barrel credit  it could                                                               
then carry credit  over into the next month.   Part of the factor                                                               
was the volatility  of the market, which was  probably not vetted                                                               
as  much,  although  he  cannot  say  that  the  committee  asked                                                               
Director Alper  about that as  much as the general  due diligence                                                               
applied to that  issue.  The committee heard  testimony about the                                                               
inability to claim an entire  per-barrel credit during a specific                                                               
month could be held and used  later.  The testimony was that this                                                               
was  total  inadvertence, it  arises  during  a period  of  price                                                               
volatility.   Very approximately  this item was  part of  a floor                                                               
hardening  spreadsheet  that indicated  loss  of  $50 million  in                                                               
revenue  to the  state, which  the committee  saw as  recently as                                                               
yesterday.                                                                                                                      
                                                                                                                                
REPRESENTATIVE JOSEPHSON continued,  explaining that Amendment 33                                                               
would revive subsections  (b) and (c) of the  original Section 17                                                               
of HB  247.  Under  current law, he noted,  sliding-scale credits                                                               
lost due to minimum tax can  be recovered at annual true-ups.  He                                                               
recalled that the bi-partisan Senate  working group met about six                                                               
times  [in fall  2015], meeting  for  a total  of about  eighteen                                                               
hours,  and  bringing  together many  experts  and  many  people,                                                               
including AOGA.   Lenders addressing the  working group expressed                                                               
a  need  for  borrowers  to  provide  monthly  reports  regarding                                                               
capital requirements  and cash  positions.   One could  take from                                                               
that that  it is unlikely  that that  is not happening,  and that                                                               
there  is  some great  accounting  difficulty  in following  this                                                               
amendment.  Then  again, the Senate working group  wanted a fixed                                                               
floor and  the chair  of the working  group recommended  as much.                                                               
He offered his belief that this was  a nod to the need to reflect                                                               
that this was  a 4 percent floor and that  people believed it was                                                               
a 4  percent floor.   However, he said,  it never really  was and                                                               
for that reason he is offering Amendment 32.                                                                                    
                                                                                                                                
7:53:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  recalled the committee looking  at this in                                                               
testimony, and  questioning and  finding that  it was  related to                                                               
the  monthly tax  calculation for  the  per-barrel credit,  which                                                               
mirrored the monthly  progressivity tax that was  in the previous                                                               
tax regime.   Given that is  what it was  built for and if  it is                                                               
not doing  that job,  then the  committee did not  do the  job it                                                               
thought  it was  doing  when it  created this,  he  posited.   He                                                               
offered his support for Amendment  33, saying it is essential the                                                               
committee implement  what it intended  to implement  when passing                                                               
[Senate Bill 21].                                                                                                               
                                                                                                                                
REPRESENTATIVE  JOSEPHSON noted  that Representative  Seaton also                                                               
stated the  aforementioned at a  previous committee meeting.   It                                                               
corroborates what he has said, which  is that to the extent there                                                               
is legislative  history, it  reflects a  different result.   This                                                               
was inadvertent and  is resulting in millions of  dollars lost to                                                               
the state, particularly in times of volatility.                                                                                 
                                                                                                                                
7:55:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 33.                                                                     
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and  Tarr  voted  in  favor of  Amendment  33.    Representatives                                                               
Chenault,  Johnson, Olson,  Herron,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 33 failed by a vote of 3-6.                                                                   
                                                                                                                                
7:56:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  34, labeled  29-                                                               
GH2609\P.36, Shutts, 3/21/16, which read:                                                                                       
                                                                                                                                
     Page 6, line 6:                                                                                                            
          Delete "and before January 1, 2017,"                                                                              
                                                                                                                                
     Page 6, lines 9 - 12:                                                                                                      
          Delete "For lease expenditures incurred on or                                                                     
     after  January 1, 2017,  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 10 percent                                                                
     of a carried-forward annual loss."                                                                                     
                                                                                                                                
     Page 8, line 2:                                                                                                            
          Delete "40"                                                                                                           
          Insert "30 [40]"                                                                                                  
                                                                                                                                
     Page 8, line 4:                                                                                                            
          Delete "30"                                                                                                       
          Insert "20"                                                                                                       
                                                                                                                                
     Page 8, lines 5 - 8:                                                                                                       
          Delete ", and before January 1, 2018;                                                                             
               (C)  20 percent of an expenditure incurred                                                                   
     on or after January 1, 2018"                                                                                           
                                                                                                                                
REPRESENTATIVE OLSON objected to Amendment 34.                                                                                  
                                                                                                                                
7:56:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR  explained  Amendment   34.    She  reminded                                                               
members  that  the  credits  kept  for Cook  Inlet  are  the  net                                                               
operating loss,  the qualified capital expenditure,  and the well                                                               
lease expenditure credits.   Version P would  provide a step-down                                                               
of the well  lease expenditure credit, keeping it  at 40 percent,                                                               
then dropping  it to 30  percent in  the next calendar  year, and                                                               
then going down to 20 percent.   Amendment 34 would get to the 20                                                               
percent one  year earlier.  Amendment  34 would also keep  the 25                                                               
percent  net operating  loss [credit],  whereas  Version P  would                                                               
provide for  a 10 percent net  operating loss [credit].   In some                                                               
ways  this is  a  matter of  philosophy  regarding the  different                                                               
levers.  On  the North Slope there is a  35 percent net operating                                                               
loss [credit]  when a company  has a  loss, which matches  the 35                                                               
percent tax rate, barring the  per-barrel credit.  However, those                                                               
credits  are split  differently in  Cook Inlet,  and there  is no                                                               
production tax opportunity to the state  to match things up.  She                                                               
said  her thinking  is that  the  state should  be more  generous                                                               
during the early end of things  when companies are operating at a                                                               
loss and this is where she sees  the credits being able to play a                                                               
bigger role.   Then, once in  production and a company  is paying                                                               
production tax, except  in Cook Inlet, the state  has less reason                                                               
to be generous.  The net impact  under Version P would be that it                                                               
actually goes  down to  30 percent  by the  end of  that two-year                                                               
period, and the  QCE and WLE would expire in  2022.  Amendment 34                                                               
would not  affect the  expiration date  for those  two particular                                                               
credits  but  would make  adjustment  on  the  WLE and  NOL,  and                                                               
because these credits  can be stacked it would end  up being more                                                               
generous under  the amendment for  a company operating at  a loss                                                               
than is Version P.                                                                                                              
                                                                                                                                
7:59:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO opposed Amendment  34, pointing out that during                                                               
development  of  the  committee   substitute  he  was  trying  to                                                               
navigate a little more of a  transition in the elimination of tax                                                               
credits in Cook Inlet.  He said  he does not want to pull the rug                                                               
out from under  someone and wants to provide them  some time.  He                                                               
understood that Amendment 34 would  remove that date and would be                                                               
effective nearly immediately.                                                                                                   
                                                                                                                                
8:00:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON said  that in looking at  the amendment and                                                               
the bill, there might be an inadvertent retroactive clause.                                                                     
                                                                                                                                
REPRESENTATIVE TARR stated it is not inadvertent.                                                                               
                                                                                                                                
REPRESENTATIVE HERRON asked whether that is a good thing.                                                                       
                                                                                                                                
REPRESENTATIVE  TARR replied  that the  committee looked  at work                                                               
currently being  done in Cook Inlet  and there is a  company that                                                               
is really still  in production that would be able  to have access                                                               
to  these  credits.   It  is  a  matter  of philosophy  with  the                                                               
different levers,  she said, and  she thinks the state  should be                                                               
more generous  in the pre-production  phase where there  is truly                                                               
loss, so the  larger net operating loss should be  kept.  Version                                                               
P would accommodate some existing  work, which makes her slightly                                                               
uncomfortable in thinking it is  leaning towards special interest                                                               
legislation because  it favors maybe one  particular company more                                                               
than others.  In general, she  continued, she would prefer to err                                                               
on the  side of a more  generous net operating loss  for support,                                                               
which is how  the legislature has structured things  on the North                                                               
Slope and leads her to look at that type of infrastructure.                                                                     
                                                                                                                                
8:02:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT  stated that  the  tax  credits in  Cook                                                               
Inlet have done exactly what  the legislature expected them to do                                                               
and exactly what the legislature hoped  for them to do, which was                                                               
to incentivize  exploration and more  production of both  oil and                                                               
gas.  He said  he is aware of at least two  companies that are on                                                               
the verge  of continuing  to increase the  supply of  natural gas                                                               
and oil  to Alaska  refineries and the  majority of  citizens who                                                               
live in  the Railbelt.   While some  may make the  argument about                                                               
Cook  Inlet gas  prices compared  to  other areas  of the  world,                                                               
those tax credits did exactly what  they were intended to do.  He                                                               
allowed  he is  okay  with downsizing  those,  but asserted  that                                                               
cutting  them  or going  back  retroactively  is a  disincentive.                                                               
These corporations can  go elsewhere and they may.   Care must be                                                               
taken as  those levers are  moved to  ensure the region  does not                                                               
end up back in the position it was  in a number of years ago when                                                               
the importation of LNG was being considered.                                                                                    
                                                                                                                                
8:04:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  concluded her  explanation of  Amendment 34,                                                               
saying  she  does  not  disagree  with  Representative  Chenault.                                                               
Guiding her towards this amendment,  she continued, is that it is                                                               
downsizes  one credit  and  upsizes another.    The amendment  is                                                               
saying  that  the stage  where  the  state  needs to  be  helping                                                               
companies  is  when  they  are  losing money  while  not  yet  in                                                               
production.   That  is the  phase where  she is  more comfortable                                                               
being more generous,  which is why condensing  the step-down from                                                               
a   three-year  transition   to  a   two-year  transition   seems                                                               
appropriate  to her.    [Under current  law,  state support]  for                                                               
calendar year  2016 is  about 65 percent;  under Amendment  34 it                                                               
would  be 55  percent, so  still above  50 percent.   One  of the                                                               
producers [before  the committee] talked about  the credits being                                                               
a co-investor  situation.   When it goes  beyond an  equal split,                                                               
she posited,  it is  more like  the state  is a  primary investor                                                               
rather than  a co-investor  for that  particular project.   Under                                                               
Amendment  34 in  calendar year  2016,  the maximum  could be  55                                                               
percent if  a company has  a loss  stackable with the  well lease                                                               
expenditure credit, and then it would  go down to 45 percent.  In                                                               
those out  years for a company  that has a loss,  Amendment 34 is                                                               
actually more generous than Version P.                                                                                          
                                                                                                                                
REPRESENTATIVE   TARR  further   noted  that   the  legislature's                                                               
consultant [enalytica]  has advised that  a price between  $5 and                                                               
$7  [per thousand  cubic  feet]  should be  able  to support  any                                                               
development, and  it was reported  to the committee that  some of                                                               
the new,  recently signed contracts  through 2023 are at  a price                                                               
of $7.49 going  up to $8.19.  The net  operating loss opportunity                                                               
could be  more important for encouraging  continued activity, she                                                               
posited.  It  is a matter of which options  and kind of behaviors                                                               
are trying  to be  created.   Some of  the other  amendments that                                                               
have come before the committee  underscore her point that without                                                               
having access  to some  of the information  it is  very difficult                                                               
for her as  a policymaker to say  what the best tool  is and what                                                               
gets the results that are the  most favorable for the state.  She                                                               
reiterated  that it  comes down  to  philosophy as  far as  which                                                               
activities to encourage and at what phases of development.                                                                      
                                                                                                                                
8:07:32 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 34.                                                                     
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and  Tarr  voted  in  favor of  Amendment  34.    Representatives                                                               
Herron,  Chenault, Johnson,  Olson,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 34 failed by a vote of 3-6.                                                                   
                                                                                                                                
8:08:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 35,  labeled                                                               
29-GH2609\P.7,  Shutts, 3/19/16.   [Amendment  35 is  provided at                                                               
the end of the minutes on HB 247.]                                                                                              
                                                                                                                                
REPRESENTATIVE JOHNSON objected to the amendment.                                                                               
                                                                                                                                
8:08:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON explained that  Amendment 35 would step-                                                               
down  the qualified  capital expenditure  [credit] to  10 percent                                                               
the middle of  summer 2016 and would repeal  it altogether summer                                                               
2017.   He said  the amendment reflects  some urgency  because of                                                               
the  state's huge  deficit, an  issue  addressed by  many of  his                                                               
amendments.   For example, during  four hours of  the committee's                                                               
meeting time  today, the state  incurred another $1.6  million of                                                               
debt.   Some companies in  the industry have started  to contract                                                               
and retrench,  and it is  appropriate for  the state do  the same                                                               
because  the   state  cannot  meet  these   obligations  in  this                                                               
unsustainable  way.    The  governor's  original  bill  was  more                                                               
aggressive  than  Amendment  35,  resulting in  $200  million  in                                                               
savings  on  the well  lease  expenditure  and qualified  capital                                                               
expenditure [credits]; so,  it can be surmised  that Amendment 35                                                               
would  be  less  than  that   and  would  not  achieve  what  the                                                               
administration hoped to achieve.   He offered his belief that the                                                               
qualified  capital   expenditure  [credits]  have   served  their                                                               
purpose  - they  have stimulated  production in  Cook Inlet.   He                                                               
allowed that everyone who testified  that this would impact their                                                               
economics  is right  by definition.   He  said his  other concern                                                               
with  the QCE  [credit]  is that  it has  been  stacked with  NOL                                                               
credits and  resulted in 45-65  percent State of  Alaska support.                                                               
That  was  not  necessarily  fully anticipated  by  the  previous                                                               
legislature and is the reason why he is moving this amendment.                                                                  
                                                                                                                                
8:11:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  stated that  the same arguments  apply to                                                               
Amendment 35 as did Amendment 34  - the credits have done exactly                                                               
what they were supposed  to do.  Because he does  not want to see                                                               
the  Anchorage mayor  on television  regarding  brownouts, he  is                                                               
opposed to Amendment 35.                                                                                                        
                                                                                                                                
REPRESENTATIVE HERRON  asked whether  there are sunsets  on these                                                               
two [credits].                                                                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON replied he  thinks the QCE [credit] will                                                               
sunset in 2022.                                                                                                                 
                                                                                                                                
REPRESENTATIVE HERRON said he just wanted this on the record.                                                                   
                                                                                                                                
REPRESENTATIVE SEATON stated he  supports Amendment 35 because he                                                               
is concerned about some of the  earlier amendments as well as the                                                               
tax credits  being paid out  substantially in Cook Inlet  for gas                                                               
production, which is fully supported by the price.                                                                              
                                                                                                                                
REPRESENTATIVE TARR said  the aforementioned is why  she has been                                                               
interested  in making  some modifications.   While  she does  not                                                               
want  to again  experience the  situation [of  brownouts] in  her                                                               
community,  it  was heard  from  the  utilities that  things  are                                                               
pretty  good  and  contracts  are  in place  through  2023.    By                                                               
providing  a  [legislative]  working   group  in  the  bill,  the                                                               
committee  has  acknowledged  that  there is  an  opportunity  to                                                               
review and see what is still  needed and that the legislature may                                                               
have accomplished what  it hoped to.  It is  for that reason that                                                               
she supports Amendment 35.                                                                                                      
                                                                                                                                
REPRESENTATIVE OLSON  noted that  while the  contracts may  be in                                                               
place, he  does not believe all  the gas is yet  in place through                                                               
2023.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  JOSEPHSON said  his  memory of  the testimony  is                                                               
that  it is  either 70  or 75  percent covered  through 2023,  so                                                               
Representative Olson is right in that  respect.  The rest is sort                                                               
of  behind  the  pipe,  which  may not  satisfy  everybody.    He                                                               
recalled Mr. Armstrong  [of Armstrong Oil &  Gas Inc.] testifying                                                               
that  this is  the  most favorable  economic  environment on  the                                                               
planet.      So,   given   the   state's   financial   situation,                                                               
Representative  Josephson  said he  would  like  to make  it  the                                                               
second most favorable and he is  okay with that because the state                                                               
has other problems.                                                                                                             
                                                                                                                                
8:15:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON maintained his objection to Amendment 35.                                                                
                                                                                                                                
A roll  call vote was  taken.  Representatives Tarr,  Seaton, and                                                               
Josephson  voted  in  favor of  Amendment  35.    Representatives                                                               
Herron,  Chenault, Johnson,  Olson,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 35 failed by a vote of 3-6.                                                                   
                                                                                                                                
8:16:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR moved to  adopt Amendment 36, 29-GH2609\P.43,                                                               
Nauman/Shutts, 3/21/16, which read:                                                                                             
                                                                                                                                
     Page 9, line 11:                                                                                                           
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 9, following line 21:                                                                                                 
     Insert a new subsection to read:                                                                                           
          "(k)  The percentage of a transferable tax credit                                                                     
     certificate  issued  under  AS 43.55.023(d)  or  former                                                                    
     AS 43.55.023(m) or a  production tax credit certificate                                                                    
     issued   under   AS 43.55.025(f)   purchased   by   the                                                                    
     department may  not exceed  the percentage  of resident                                                                    
     workers in  the applicant's  workforce in the  state in                                                                    
     the   preceding   calendar  year,   including   workers                                                                    
     employed by  the applicant's contractors. An  amount of                                                                    
     a credit  not purchased because of  application of this                                                                    
     subsection may  be applied against the  applicant's tax                                                                    
     liability  under  this  chapter.  In  this  subsection,                                                                    
     "resident   worker"   has    the   meaning   given   in                                                                    
     AS 43.40.092(b)."                                                                                                          
                                                                                                                                
REPRESENTATIVE OLSON objected to the amendment.                                                                                 
                                                                                                                                
8:16:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR explained  Amendment  36  relates to  Alaska                                                               
hire,  another  of  the  provisions she  liked  in  the  original                                                               
version of  HB 247.   The  language for  Amendment 36  comes from                                                               
page 19,  lines 27-31, and  page 20,  lines 1-3, of  the original                                                               
bill.   The legislature  can never go  wrong in  encouraging more                                                               
Alaska hire,  she said.   The committee previously  discussed the                                                               
complexity  of  how  this  provision  would  work,  but  this  is                                                               
something  the  department  can  work   through  if  there  is  a                                                               
potential challenge.   If the  state were to institute  an income                                                               
tax, about $70 million would  come to the state from out-of-state                                                               
[workers] employed  in a variety of  industries.  This is  also a                                                               
workforce development issue, she posited,  because she sees it as                                                               
an  incentive for  international  companies  that are  downsizing                                                               
their workforce  around the world  to do Alaska hire  rather than                                                               
move   employees   cut   from   another   location   to   Alaska.                                                               
Additionally, should the North Slope  gasline project go forward,                                                               
this provision  would help  ensure an  Alaska workforce  ready to                                                               
work on that project.                                                                                                           
                                                                                                                                
8:19:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  stated that while he  thinks 100 percent                                                               
Alaska  hire is  a great  goal, he  does not  think it  will ever                                                               
happen.   The amendment  may have  some constitutional  issues on                                                               
how far  the state can go  with Alaska hire, he  posited, because                                                               
any American has  the constitutional right to go  anywhere in the                                                               
U.S. to work.   This is trying to interject  social policy into a                                                               
tax  bill and  is not  a  wise investment  for the  state to  do.                                                               
While he is  a firm supporter of Alaska hire,  something which he                                                               
has done throughout his business  career, there are things in the                                                               
amendment  that he  thinks  are problematic,  such  as having  it                                                               
apply to  subcontractors that bring  up specialty  contractors to                                                               
do work  that Alaskans are  not trained  to do, although  that is                                                               
not to  say Alaskans cannot  be trained  as that is  something he                                                               
would like to see done.   The amendment would put more hurdles in                                                               
the way  of what  is wanted, which  is investment  in production.                                                               
Other  industries in  Alaska have  a lower  percentage of  Alaska                                                               
hire than  does the oil  industry.  In his  35 years of  making a                                                               
living in the oil industry  he has seen many outside contractors,                                                               
but  he has  also  seen  many Alaska  contractors  that have  the                                                               
talent and ability to work Alaskans.                                                                                            
                                                                                                                                
8:22:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON pointed out  that the state's education tax                                                               
credits are  being used  to educate and  hire Alaska  workers and                                                               
must be  used within the state  to promote local workforces.   He                                                               
said this  would be  a great  provision to also  have on  any tax                                                               
credits that  the state gives to  other industries.  This  is not                                                               
targeting  the oil  industry, it  is saying  that if  dollars are                                                               
being  paid out  of the  state  treasury then  there are  certain                                                               
things the  state has a right  to expect and one  of those things                                                               
is that  those companies  value Alaskan  workers and  skills with                                                               
something  more than  just the  equivalency that  they do  as the                                                               
workforce.   In other words, if  there are two workers  and there                                                               
is  no difference  in  those workers,  then that  is  not a  good                                                               
situation  for keeping  Alaskans  hired when  there is  workforce                                                               
reduction.   A  company benefitting  from tax  credits paid  at a                                                               
higher rate by  hiring Alaskans is a  good thing.  It  would be a                                                               
constitutional problem  if the state  says a company has  to hire                                                               
somebody,  he said,  but that  is not  the case  if the  state is                                                               
saying that a company qualifies for  more of a tax credit payment                                                               
that is  dependent upon whether  the company is  hiring Alaskans.                                                               
That  is totally  appropriate, it  is  coming out  of the  public                                                               
treasury, and Alaskans having jobs is  a public benefit.  He said                                                               
he supports Amendment 36 because  it is only saying that Alaska's                                                               
treasury will  reimburse based  on the percentage.   He  added he                                                               
would not  support the  amendment if these  tax credits  were not                                                               
transferable to someone else, but they  are.  They can be sold to                                                               
anybody else  that has  a tax  liability, so  it is  not limiting                                                               
what  the company  can  do with  those tax  credits,  it is  only                                                               
directing  purchase  by  the  department and  that  is  a  public                                                               
benefit  and  provides  a  better   enhancement  for  the  Alaska                                                               
workforce.                                                                                                                      
                                                                                                                                
8:24:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  said he supports Amendment  36.  Noting                                                               
he taught constitutional law for  six years, he explained that an                                                               
important distinction is  that the thing being  exchanged here is                                                               
an  entirely optional  program  to  begin with.    No  one has  a                                                               
constitutional right to a credit,  it is a voluntary program, and                                                               
the program  could be eliminated.   That distinction  is critical                                                               
and therefore is not a constitutional problem.                                                                                  
                                                                                                                                
REPRESENTATIVE TARR  concluded her  explanation of  Amendment 36.                                                               
She  said she  agrees  with Representative  Seaton  and that  the                                                               
committee  has an  opportunity today  to think  about how  to use                                                               
this legislation to  encourage more Alaska hire.   She added that                                                               
she also appreciates  Representative Josephson's comments because                                                               
she recalls DOR's testimony about  working with the Department of                                                               
Law (DOL)  to avoid any  legal problems.   A provision  like this                                                               
amendment would  give her the  opportunity when talking  with her                                                               
neighbors to  say that  this has  a material  value and  that the                                                               
company only earns based on its  Alaska hire.  It would allow her                                                               
neighbors  to  conclude that  the  credit  is a  good  investment                                                               
because it is about developing Alaska's economy and workforce.                                                                  
                                                                                                                                
8:27:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON maintained his objection to Amendment 36.                                                                  
                                                                                                                                
A roll  call vote  was taken.   Representatives  Josephson, Tarr,                                                               
and  Seaton voted  in  favor of  Amendment  36.   Representatives                                                               
Herron,  Chenault, Johnson,  Olson,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 36 failed by a vote of 3-6.                                                                   
                                                                                                                                
8:28:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 37, labeled                                                                   
29-GH2609\P.52, Nauman/Shutts, 3/21/16, which read:                                                                             
                                                                                                                                
     Page 6, line 12, following "loss.":                                                                                    
          Insert "Notwithstanding that a qualified capital                                                                  
     expenditure may  be a deductible lease  expenditure for                                                                
     purposes  of calculating  the production  tax value  of                                                                
     oil,  gas,  or oil  and  gas  under AS 43.55.160(a),  a                                                                
     producer or  explorer may not  apply against  the taxes                                                                
     due under  this chapter a credit  under this subsection                                                                
     in  the  same tax  year  that  a producer  or  explorer                                                                
     applies a credit under (a) of this section."                                                                           
                                                                                                                                
     Page 9, line 11:                                                                                                           
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 9, following line 21:                                                                                                 
          Insert a new subsection to read:                                                                                      
          "(k)  The department may not, in the same                                                                             
     calendar year, purchase both  a transferable tax credit                                                                    
     certificate or  a portion of a  transferable tax credit                                                                    
     certificate  issued as  a result  of a  carried-forward                                                                    
     annual  loss  under  AS 43.55.023(b)  and  a  qualified                                                                    
     expenditure under AS 43.55.023(a)."                                                                                      
                                                                                                                                
     Page 18, line 20, following "APPLICABILITY.":                                                                              
          Insert "(a)"                                                                                                          
                                                                                                                                
     Page 18, following line 21:                                                                                                
          Insert a new subsection to read:                                                                                      
          "(b)  The limitation on the purchase of tax                                                                           
     credits   by   the    Department   of   Revenue   under                                                                    
     AS 43.55.023(b),  as amended  by sec.  12 of  this Act,                                                                    
     and  AS 43.55.028(k), added  by  sec. 17  of this  Act,                                                                    
     applies  to  credit   purchases  from  credit  purchase                                                                    
     applications received  on or  after the  effective date                                                                    
     of secs. 12 and 17 of this Act."                                                                                           
                                                                                                                                
                                                                                                                                
CO-CHAIR TALERICO objected to Amendment 37.                                                                                     
                                                                                                                                
8:28:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON explained  Amendment 37  would disallow                                                               
the combination of a net  operating loss with a qualified capital                                                               
expenditure  or  a  well  lease  expenditure.    The  fundamental                                                               
problem,  he  said,  is  the  "stackability  phenomenon"  of  the                                                               
credits and  the getting  to 65 or  85 cents on  the dollar.   He                                                               
related that  he sometimes  stops himself to  ask, "Why  don't we                                                               
have  an Alaska  company that  simply drills  oil at  85 cents  a                                                               
dollar?"  That  aside, he said the  qualified capital expenditure                                                               
and well  lease expenditure were implemented  to reinvigorate the                                                               
Cook  Inlet Basin,  which has  been accomplished  and has  been a                                                               
success.   However, the result  of the stacking is  45-65 percent                                                               
state  support  for development  in  Cook  Inlet.   Although  the                                                               
committee substitute sees  that problem, it does not  in his view                                                               
address it as promptly as he  would like given the fiscal crisis.                                                               
So,  Amendment 37  would provide  for an  effective date  in nine                                                               
months, January 1, 2017.  The  amendment would no longer allow an                                                               
expenditure credit  stacked with  a net operating  loss and  as a                                                               
consequence  it  would reduce  the  state's  exposure.   Reducing                                                               
stackability is a  step toward the goal of  reducing state outlay                                                               
and transitioning  to a  system that hopefully  is largely  a net                                                               
operating loss system.                                                                                                          
                                                                                                                                
8:30:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR supported Amendment  37, saying it is another                                                               
opportunity for some additional protections for the state.                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON said  he is trying to  envision what would                                                               
be happening if this provision  were in place now while companies                                                               
are losing money.   He said there are still  people investing and                                                               
if this  were in  place now he  is not sure  there would  be that                                                               
investment; this  is keeping companies  operating while  they are                                                               
experiencing  losses.    The  state   is  blessed  to  have  some                                                               
companies  that have  vision and  are continuing  to invest  even                                                               
though they are losing millions of dollars a day.                                                                               
                                                                                                                                
CO-CHAIR NAGEAK commented that incentives  have been around for a                                                               
very long time in the rest  of the U.S.  Whenever something needs                                                               
to be done or built, incentives  are given to people in different                                                               
companies.   Incentives have been  used since the U.S.  was born.                                                               
So, incentives  are nothing new  for spurring investment.   If it                                                               
was not for oil this state would  not be this rich with the money                                                               
that has been put away for the future.   This is the same for the                                                               
municipalities  that  are  along   the  pipeline  and  they  will                                                               
continue  to be  enriched  through more  investment during  these                                                               
hard times.   The companies are  not making money here  in Alaska                                                               
and  given  the current  low  oil  prices  he is  surprised  that                                                               
companies are still here and still out looking for more oil.                                                                    
                                                                                                                                
8:34:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   concluded  his  explanation   of  the                                                               
amendment.  He  agreed with Co-Chair Nageak that  oil has greatly                                                               
helped the  state.  While he  is too young to  remember the 1960s                                                               
very well,  he said he  thinks people were  happy back then  in a                                                               
different kind of  way.  However, in his mind's  eye Amendment 37                                                               
is not about the North Slope, but  about Cook Inlet.  Of the $625                                                               
million  in repurchasables,  about $400  million was  Cook Inlet.                                                               
Companies are  making money  in Cook Inlet  and the  state cannot                                                               
afford all of it, as much as it  would like to.  While it is true                                                               
that  there  are   capital  credits  on  the   North  Slope,  his                                                               
understanding is  that under Senate Bill  21 the plan was  to use                                                               
more of a net operating loss  and the gross value reduction (GVR)                                                               
for the new oil.  He  reiterated that he is offering Amendment 37                                                               
for Cook Inlet.                                                                                                                 
                                                                                                                                
8:35:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON maintained his objection to Amendment 37.                                                                
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted in favor of Amendment  37.  Representatives Seaton, Herron,                                                               
Johnson,   Olson,  Talerico,   and  Nageak   voted  against   it.                                                               
Therefore, Amendment 37 failed by a vote of 2-6.                                                                                
                                                                                                                                
8:37:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  38, labeled  29-                                                               
GH2609\P.44, Nauman/Shutts,  3/21/16.  [Amendment 38  is provided                                                               
at the end of the minutes on HB 247.]                                                                                           
                                                                                                                                
REPRESENTATIVE OLSON objected to the amendment.                                                                                 
                                                                                                                                
8:37:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR explained  that Amendment  38 is  related to                                                               
the  gross value  at the  point of  production and  is the  exact                                                               
language from  the original version  of HB 247, Section  31, page                                                               
21, lines 29-30.   She said this was discussed  in the PowerPoint                                                               
presentation   entitled,   "Additional  Modeling   and   Scenario                                                               
Analysis -  Part 1a,"  provided to  the committee  on 2/22-24/16.                                                               
Drawing attention  to slide 50  which states that [under  HB 247]                                                               
the gross  value cannot go below  zero, she said this  means that                                                               
at  current   market  prices  of   around  $30  per   barrel  the                                                               
transportation costs must be $30 or  less.  Referring to slide 51                                                               
depicting  Trans-Alaska   Pipeline  System  (TAPS)   tariffs  and                                                               
pipeline tariffs for different units,  she pointed out that these                                                               
transportation  costs range  from a  low of  $6.45 to  a high  of                                                               
$28.49 at  Point Thomson.   Turning  to slide  52 she  noted that                                                               
today's oil  price has hovered  around $38 a barrel,  but pointed                                                               
out  that if  the price  dropped to  $30 the  Point Thomson  Unit                                                               
would have  a negative gross value  at a tariff of  $28.49 plus a                                                               
marine  transportation  cost  [of  $3.37].   Amendment  38  would                                                               
prevent that  gross value from  going below zero.   She explained                                                               
that  for  purposes  of  calculating  the  taxes  on  the  entire                                                               
segment, the  negative would  be used to  offset the  positive in                                                               
another area  and that  could have a  material impact.   Bringing                                                               
attention to the example given on  slide 52, she pointed out that                                                               
using  the negative  to offset  positive  values elsewhere  would                                                               
result  in  a tax  reduction  of  35  percent of  the  difference                                                               
because  the company  would be  able to  apply the  net operating                                                               
loss portion of  that.  While the state is  not experiencing this                                                               
situation  now, she  said Amendment  38 would  protect the  state                                                               
should prices go lower.                                                                                                         
                                                                                                                                
8:40:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON maintained his objection to Amendment 38.                                                                  
                                                                                                                                
REPRESENTATIVE SEATON  stated he  is worried somewhat  about this                                                               
issue because some areas in the  state have very high credits and                                                               
companies might do a project that  is far afield because they can                                                               
offset other tax  from other places in their portfolio.   The hit                                                               
would be  to the  state while  it would  be equalized  within the                                                               
company.  He posited  that the price does not have  to go down to                                                               
$30 a barrel,  it just has to  be that the costs  incurred in the                                                               
field are large  in respect to whatever the price  is.  The state                                                               
opens itself  to additional  losses that  could be  determined by                                                               
issues other  than what  is good  for the  state.   Therefore, he                                                               
continued, Amendment  38 is a  good amendment to ensure  that the                                                               
calculation on  the point  of production value  is not  less than                                                               
zero to offset other developments.                                                                                              
                                                                                                                                
REPRESENTATIVE  JOHNSON said  he  finds it  inconceivable that  a                                                               
company would  invest someplace  that is marginal  just to  get a                                                               
tax break.   These companies invest  to pump and sell  oil and to                                                               
make a  profit and he does  not believe that many  companies view                                                               
tax credits as  profit.  Getting that oil to  market is where the                                                               
profit is.   Secondly,  what is  being talked  about here  is new                                                               
oil.  Much of that is  farther out from infrastructure and is the                                                               
oil that  the state needs  to develop now  and that is  what this                                                               
credit does.   To  take away  that incentive  to move  beyond the                                                               
legacy  fields  and   proven  reserves  would  do   the  state  a                                                               
disservice.  He said he is therefore opposed to Amendment 38.                                                                   
                                                                                                                                
8:43:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR concluded her  explanation of Amendment 38 by                                                               
noting there is a distinction  between gross value reduction (new                                                               
oil) versus  gross value at  the point  of production.   She said                                                               
Representative  Seaton brought  up  the  other potential  example                                                               
relative  to the  development  that is  going on  now.   The  one                                                               
circumstance that  edges toward  a situation  like that  would be                                                               
Point Thomson, but  it is true about doing  a development farther                                                               
out.  Adopting Amendment 38  would avoid a level of vulnerability                                                               
to the state.   While it has been stated  repeatedly that changes                                                               
should not  be made right  now for companies that  are investing,                                                               
what makes  Amendment 38  different is  that it  is not  a change                                                               
that would  impact what  someone is doing  right now  because the                                                               
price is  at $38 and  hopefully going up.   If put in  place now,                                                               
companies would  have to  make a decision  based on  knowing that                                                               
this was  the policy in  place.   She surmised this  was probably                                                               
not discussed during consideration of  Senate Bill 21 because the                                                               
modeling was done  for prices around $80 and so  this would never                                                               
have been a part of the  conversation.  The amendment is planning                                                               
ahead and  would give the companies  the idea of needing  to look                                                               
at that, think about the price window, and make a decision.                                                                     
                                                                                                                                
8:46:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON maintained his objection to Amendment 38.                                                                  
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and Tarr voted in favor  of Amendment 38.  Representatives Olson,                                                               
Herron,  Johnson,   Talerico,  and   Nageak  voted   against  it.                                                               
Therefore, Amendment 38 failed by a vote of 3-5.                                                                                
                                                                                                                                
8:46:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 39,  labeled                                                               
29-GH2609\P.50, Shutts, 3/21/16, which read:                                                                                    
                                                                                                                                
     Page 9, line 8:                                                                                                            
          Delete "and"                                                                                                          
          Insert "[AND]"                                                                                                        
                                                                                                                                
     Page 9, line 9, following "(5)":                                                                                           
          Insert "during the calendar year preceding the                                                                    
     calendar  year in  which the  application is  made, the                                                                
     applicant's revenue generated  from the applicant's oil                                                                
     and  gas   business,  including  the  revenue   of  the                                                                
     applicant's affiliates  if the applicant is  part of an                                                                
     affiliated group, did not exceed $10,000,000,000; and                                                                  
               (6)"                                                                                                         
                                                                                                                                
REPRESENTATIVE OLSON objected to Amendment 39.                                                                                  
                                                                                                                                
8:47:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON explained  Amendment  39.   He  related                                                               
that several  legislators looked at  the work of the  director of                                                               
the  Tax Division,  his team,  and the  administration, and  some                                                               
people  wanted the  administration to  be of  a reform  mind more                                                               
than it was.   But, when HB 247 was  originally brought forth, he                                                               
could instantly  see what he  thought was intuitive  wisdom about                                                               
some  things and  that  is  what Amendment  39  speaks  to.   The                                                               
administration made the  case that there are  companies in Alaska                                                               
that have global revenue exceeding  $10 billion, an example being                                                               
the Italian  energy company ENI.   The State of  Alaska's revenue                                                               
exceeds  $1  billion this  year,  yet  the  state is  paying  ENI                                                               
reimbursable  tax  credits.   If  the  overall discussion  is  to                                                               
incentivize, one might  argue that more of an  incentive would be                                                               
to not pay  those and to instead require oil  production and then                                                               
take it in  the next year against liability.   This is an example                                                               
of  where he  is sure  that people  sit in  their board  rooms in                                                               
Milan and  say, "Geez,  we can  get tens  of millions  of dollars                                                               
paid back to us if we have a  loss or we don't produce."  But, he                                                               
continued, that is  really not what is at issue  for companies of                                                               
this size, and for that reason he is offering Amendment 38.                                                                     
                                                                                                                                
REPRESENTATIVE  TARR said  she supports  Amendment  39 because  a                                                               
good  feature of  the original  bill was  that it  recognized the                                                               
difference between the  balance sheets of a big  company versus a                                                               
small  company.   However,  that provision  was  not retained  in                                                               
Version  P, which  treats all  companies equally.   The  needs of                                                               
smaller  companies   have  previously  been  recognized   by  the                                                               
legislature  as  being  different   than  more  well  established                                                               
companies, and for this reason she supports Amendment 39.                                                                       
                                                                                                                                
8:50:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON maintained his objection to Amendment 39.                                                                  
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and  Tarr  voted  in  favor of  Amendment  39.    Representatives                                                               
Johnson,  Olson, Herron,  Chenault,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 39 failed by a vote of 3-6.                                                                   
                                                                                                                                
8:50:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 40,  labeled                                                               
29-GH2609\P.26,  Nauman/Shutts,   3/19/16.    [Amendment   40  is                                                               
provided at the end of the minutes on HB 247.]                                                                                  
                                                                                                                                
REPRESENTATIVE OLSON objected to the amendment.                                                                                 
                                                                                                                                
8:50:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  explained Amendment 40 would  provide a                                                               
four-year limit on  the gross value reduction (GVR).   He said he                                                               
is offering  a four-year limit  because he finds  very compelling                                                               
the argument that things age.   The GVR definition [under current                                                               
law]  is incredibly  generous,  he  continued.   It  is a  three-                                                               
pronged disjunctive  test, so only  one element needs to  be met.                                                               
The GVR starts in  2003 and goes as far as 2011.   New oil should                                                               
not logically be new oil  forever.  Ultimately everything will be                                                               
new and everything  will have an additional  20 percent discount.                                                               
This would be  a savings.  He  pointed out that he  took the very                                                               
document  that  Senate  Bill  21  speaks  to,  the  Oil  and  Gas                                                               
Competitiveness Review  Board's first  document.  In  the section                                                               
on peer  states, the board says  that North Dakota offers  an oil                                                               
extraction tax  (OET) for  very low  production volume  wells and                                                               
incentives for  horizontal drilling and each  of these incentives                                                               
appears to  last for  18 months.   While the  OET is  not exactly                                                               
what  the  GVR is,  it  reminds  him  of  that.   Oklahoma  gives                                                               
horizontal  wells  a  reduction  for  48  months,  deep  wells  a                                                               
reduction for  48 months,  and really  deep wells  beneath 17,500                                                               
feet a reduction for five years.   Those were the only two states                                                               
in  the document.    The GVR  needs  to be  reduced  or at  least                                                               
capped, he posited.  Amendment 40  is designed to start its clock                                                               
now  with an  effective date  of  January 1,  2017, and  everyone                                                               
would get  four years and  they would get  that from the  time of                                                               
production.   The amendment  does not say  that those  doing this                                                               
for the  previous decade are out  of luck, so the  amendment is a                                                               
step-down and not a rug pulling.                                                                                                
                                                                                                                                
8:54:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON said he really  thinks the GVR needs a term                                                               
limit on how long  new oil is considered new oil.   He noted that                                                               
his amendment offered  five years and he prefers that,  but he is                                                               
willing  to  support four  years  as  well, because  the  state's                                                               
future liability is at risk.                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR stated she supports  Amendment 40 because the                                                               
conversation was  about new oil  and at  some point four  or five                                                               
years down the road she does not  see how it can still qualify as                                                               
new.  It  is not a change with immediate  impact because it still                                                               
has a four-year application after January 1, 2017.                                                                              
                                                                                                                                
REPRESENTATIVE JOHNSON  argued that this is  a fundamental change                                                               
to the  tax structure.   He said he  thinks this was  thought out                                                               
very clearly  in recognizing  that the future  of Alaska  and the                                                               
future of  TAPS is new  oil.  He agreed  it is generous  but said                                                               
that without  that new  oil the  state's future  is bleak  and he                                                               
does not  want to  do anything  that would  reduce that  new oil.                                                               
The state is going to pay for what  it does one way or the other.                                                               
It can  be paid for in  the future with reduced  production or it                                                               
can be paid  for today by keeping that  production and preserving                                                               
that production  for future generations.   Regardless  of whether                                                               
it is  a step-down  or a rug  pulling, he is  not inclined  to do                                                               
anything  that  affects  new  oil   because  it  is  the  state's                                                               
livelihood and its future.                                                                                                      
                                                                                                                                
8:56:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON maintained his objection to Amendment 40.                                                                  
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and  Tarr  voted  in  favor of  Amendment  40.    Representatives                                                               
Chenault,  Johnson, Olson,  Herron,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 40 failed by a vote of 3-6.                                                                   
                                                                                                                                
8:57:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 41,  labeled                                                               
29-GH2609\P.25, Shutts,  3/21/16.   [Amendment 41 is  provided at                                                               
the end of the minutes on HB 247.]                                                                                              
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  explained  Amendment   41.    He  said                                                               
evidence from the administration is  that repeal of the qualified                                                               
capital expenditure  and well  lease expenditure  [credits] would                                                               
save the state $200 million per  year.  Amendment 41 would repeal                                                               
the  well lease  expenditure faster  than  does Version  P.   The                                                               
committee has  heard there is  some redundancy in what  the lease                                                               
expenditure and the qualified capital  expenditure cover and that                                                               
is an  important feature.   The  purpose of both  of them  was to                                                               
incentivize gas production in Cook  Inlet to secure energy supply                                                               
in  Southcentral  Alaska.   While  he  lived through  the  entire                                                               
period  of  threatened  brownouts   and  blackouts,  he  did  not                                                               
personally go  through any exercises  but did see  the television                                                               
spots.   The renaissance had  its effect, he continued,  there is                                                               
now a profitable steady stream of  natural gas in the Cook Inlet.                                                               
If these  credits did  in fact cause  this gas  development, they                                                               
have  served their  purpose and  the well  lease expenditure  and                                                               
arguably  the qualified  capital expenditure  could or  should be                                                               
repealed.   There  is  some duplication  between  the well  lease                                                               
expenditure  and  the  qualified   capital  expenditure.    While                                                               
personally  he would  like  to gradually  reduce  the well  lease                                                               
expenditure, he  is concerned  about what is  now a  $4.1 billion                                                               
deficit, which  on [3/20/16]  was a $3.8  billion deficit.   Next                                                               
year for  the first  time in  Alaska history,  the state  will be                                                               
bringing  in  less  total  revenue from  the  oil  industry,  all                                                               
sources, except  for the 25 percent  of royalty that goes  to the                                                               
permanent  fund,  than  the  state  will be  paying  out  in  tax                                                               
credits.  Given that gas is  under pipe or under contract through                                                               
2023, the great imperative, he  posited, is to eliminate the well                                                               
lease expenditure  now or by July  1 [2016], and therefore  he is                                                               
offering this amendment.                                                                                                        
                                                                                                                                
CO-CHAIR TALERICO opposed  Amendment 41, saying it  is still very                                                               
important  to  create a  transitional  period  regardless of  how                                                               
bleak the information.   He said he does not want  it to be bleak                                                               
in  households,  planning for  continuing  on  with projects,  or                                                               
planning for production.   It is important  to carefully navigate                                                               
through here with a scalpel, not a machete.                                                                                     
                                                                                                                                
REPRESENTATIVE  JOSEPHSON concluded  explaining  Amendment 41  by                                                               
stating that his worry about the  state's fiscal future is why he                                                               
is offering these amendments.                                                                                                   
                                                                                                                                
9:01:21 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 41.                                                                     
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted  in  favor  of  Amendment   41.    Representatives  Herron,                                                               
Chenault,  Johnson, Olson,  Seaton,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 41 failed by a vote of 2-7.                                                                   
                                                                                                                                
9:02:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Amendment 42,  labeled                                                               
29-GH2609\P.3,   Nauman/Shutts,  3/19/16.     [Amendment   42  is                                                               
provided at the end of the minutes on HB 247.]                                                                                  
                                                                                                                                
CO-CHAIR TALERICO objected to the amendment.                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  explained   that  Amendment  42  would                                                               
revive Section 17(b) of the original  version of HB 247 and would                                                               
harden the  floor for all purposes.   He reported that  the [fall                                                               
2015 Senate]  working group  concluded there  may have  been some                                                               
inadvertence in terms  of whether the 4 percent was  a floor that                                                               
could be gone  beneath for purposes of  deducting credits further                                                               
from  that floor.   It  was the  biggest cost  saving feature  by                                                               
Senator Giessel's  December 1,  2015, draft  report.   The Senate                                                               
working group  found that  there was  inadvertence in  that there                                                               
was  a misunderstanding  probably because  no one  modeled prices                                                               
this low,  which should be  a lesson  that every price  should be                                                               
modeled.  The credits would not  be lost under Amendment 42, they                                                               
could  be carried  forward  to  a year  of  tax  liability.   So,                                                               
Amendment 42  would provide  a hard  floor of  4 percent  that no                                                               
qualified  capital expenditure  [credit], well  lease expenditure                                                               
[credit],  net  operating   loss  [credit],  nontransferable  tax                                                               
credit, or alternative  tax credit can penetrate.   The effective                                                               
date would  be January 1, 2017.   He offered his  belief that the                                                               
only tax  credit now that can  pierce the 4 percent  floor is the                                                               
sliding-scale  per-barrel credit.    The  governor's fiscal  note                                                               
[for the  original bill]  believed that  this feature  would save                                                               
the  state $50  million.   Amendment  42 is  consistent with  the                                                               
legislative intent, he said, and that is why he is offering it.                                                                 
                                                                                                                                
9:04:35 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TALERICO maintained his objection to Amendment 42.                                                                     
                                                                                                                                
A roll  call vote was  taken.  Representatives Tarr,  Seaton, and                                                               
Josephson  voted  in  favor of  Amendment  42.    Representatives                                                               
Herron,  Chenault, Johnson,  Olson,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 42 failed by a vote of 3-6.                                                                   
                                                                                                                                
9:05:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  43, labeled  29-                                                               
GH2609\P.46, Nauman, 3/21/16.   [Amendment 43 is  provided at the                                                               
end of the minutes on HB 247.]                                                                                                  
                                                                                                                                
REPRESENTATIVE HERRON objected to the amendment.                                                                                
                                                                                                                                
REPRESENTATIVE TARR  explained that Amendment 43  is the original                                                               
version of  the bill with  the exception of the  effective dates.                                                               
The effective  date under  the amendment would  be July  1, 2016,                                                               
while  one  section  in  the original  bill  was  retroactive  to                                                               
January 1,  2016.  The  amendment has no  retroactive provisions.                                                               
Prompting  her to  introduce Amendment  43, is  her concern  that                                                               
with just  26 days  left [in the  session, the  legislature] does                                                               
not yet have a plan.  The governor  has put out a plan, and while                                                               
she does not like all of  its provisions, it does stress the need                                                               
for  thinking   holistically  and  looking  at   a  comprehensive                                                               
solution.  This  was the most substantial part  of the governor's                                                               
plan with the  $500 million associated with it, twice  as much as                                                               
the income  tax under the  governor's plan minus the  big changes                                                               
in  the  permanent fund.    However,  the  "back of  the  napkin"                                                               
estimated fiscal impact  looked at by the  committee on [3/21/16]                                                               
was just $50 million.  Given  the legislature must put together a                                                               
plan that must now get to  a $4.1 billion deficit solution, it is                                                               
hard for  her to see where  the other big ticket  items will come                                                               
from.   If it is  not HB 247, then  what?  Adopting  Amendment 43                                                               
would fill a current $500 million hole, she posited.                                                                            
                                                                                                                                
9:08:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON said  the Department  of Revenue  (DOR)                                                               
deserves a  lot of  credit for bringing  the original  version of                                                               
the bill before  the committee.  That bill  was comprehensive and                                                               
designed to  show real  deference and  respect, perhaps  with the                                                               
exception  of  its  proposed  1  percent  increase,  arguably  20                                                               
percent  increase,  in  the  gross production  tax  floor.    The                                                               
original version of HB 247 generally  said that Senate Bill 21 is                                                               
the law  of the land and  there are some excesses  in the credits                                                               
and those  have to be reined  in.  [The deficit]  was $50 million                                                               
in  2007, it  will be  $800 million  in FY  2018, an  increase of                                                               
1,600 percent in  a decade.  Why that is  sustainable he does not                                                               
know.   If  it were  $200 million  he would  say the  state could                                                               
afford  this.   While  this  is very  important  it  just is  not                                                               
affordable, he said, and therefore he supports Amendment 43.                                                                    
                                                                                                                                
CO-CHAIR TALERICO offered his  appreciation to the administration                                                               
for bringing  forth HB 247  and the  administration's explanation                                                               
that everything  brought forward  was written  in pencil  and the                                                               
committee was to  vet it.  He said the  bill was certainly vetted                                                               
by the  committee over  the course  of 23  or 24  educational and                                                               
informational  meetings.   The bill  that  will be  moved out  of                                                               
committee is also written in pencil,  because it will be heard in                                                               
other committees, the  floor, and the other body.   Therefore, it                                                               
is  highly unlikely  that whatever  product is  produced in  this                                                               
committee  is  the  end  result.    He  said  his  opposition  to                                                               
Amendment 43  is because the  bill that the committee  has worked                                                               
its way  through will be turned  over to others and  those people                                                               
will also  work very hard  on it.   The committee has  produced a                                                               
lot  of  information  and  those   other  people  will  have  the                                                               
opportunity to go through that information.   He said he has been                                                               
very impressed  that other  members of  the legislature  can tell                                                               
him  what this  committee  has  been doing.    He reiterated  his                                                               
opposition to Amendment 43.                                                                                                     
                                                                                                                                
9:11:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  said Amendment  43 looks at  putting aside                                                               
all the work the committee has done.   When a bill comes before a                                                               
committee, it  becomes the  committee's bill to  work on  and the                                                               
committee has worked on HB 247  very diligently.  With all of the                                                               
amendments  considered  tonight,  the  committee  has  looked  at                                                               
difference in  philosophies, difference  in perspective  of where                                                               
there should and  should not be cost savings, where  to make sure                                                               
that industry is not impacted,  and where the state's treasury is                                                               
protected.   Given  the aforementioned  and that  others will  be                                                               
looking at the  bill put forth by the committee,  he said he does                                                               
not support Amendment 43.                                                                                                       
                                                                                                                                
REPRESENTATIVE TARR  concluded her  explanation of  Amendment 43.                                                               
Offering  her appreciation  for Representative  Seaton's and  Co-                                                               
Chair Talerico's comments,  she noted that this  amendment was at                                                               
the end  of her  own list  of amendments.   She explained  it was                                                               
more an opportunity to reflect back  on the work that was done by                                                               
the committee.   None of the four amendments  adopted tonight had                                                               
a real financial  impact.  Her comments tonight are,  in part, to                                                               
give some  indication to the  others who  will be looking  at the                                                               
bill as to  where she is at.   Given there are only  26 days left                                                               
to  see  how all  the  pieces  are  going  to fit  together,  the                                                               
legislature is not as far along  overall as she would like to be.                                                               
The bill was  originally well thought out, she  posited, and part                                                               
of an  overall plan and is  a lead that the  legislature needs to                                                               
take.   While  the bill  is written  in pencil  there is  not any                                                               
other  legislation,   with  the   exception  of   permanent  fund                                                               
proposals, moving through  the process right now  that would have                                                               
that kind of impact on the state's $4.1 billion debt.                                                                           
                                                                                                                                
9:15:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON maintained his objection to Amendment 43.                                                                 
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted  in  favor  of  Amendment   43.    Representatives  Herron,                                                               
Chenault,  Johnson, Olson,  Seaton,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 34 failed by a vote of 2-7.                                                                   
                                                                                                                                
9:16:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  44, labeled  29-                                                               
GH2609\P.47, Nauman/Shutts,  3/21/16.  [Amendment 44  is provided                                                               
at the end of the minutes on HB 247.]                                                                                           
                                                                                                                                
REPRESENTATIVE HERRON objected to Amendment 44.                                                                                 
                                                                                                                                
REPRESENTATIVE TARR explained Amendment 44.   Noting it will look                                                               
familiar,  she drew  attention to  page 29  of the  amendment and                                                               
said the  difference is  the effective date  of January  1, 2017.                                                               
Reiterating her  concern about  not having  an overall  plan, she                                                               
said she is offering the amendment  so members would have in mind                                                               
that  within the  original structure  of the  bill this  may have                                                               
been  another opportunity.    She  recalled the  administration's                                                               
testimony  before  the committee  about  having  worked with  the                                                               
Senate  working  group  and  industry  folks  in  developing  the                                                               
original proposal.   Something that troubled people  was the idea                                                               
of making  changes effective July  1 for the state's  fiscal year                                                               
because  that would  be disruptive  mid-year for  a tax  calendar                                                               
year.  Therefore,  Amendment 44 would push the  effective date to                                                               
January 1 of the next year.                                                                                                     
                                                                                                                                
REPRESENTATIVE HERRON maintained his objection to Amendment 44.                                                                 
                                                                                                                                
9:17:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  said he takes exception  to the statement                                                               
that was made  during consideration of a  previous amendment that                                                               
there is no fiscal impact with  the CS.  He maintained that there                                                               
will  be great  fiscal impact  of the  bill that  is passed,  and                                                               
while it  is not going  to be tomorrow  or the effective  date of                                                               
July  1 of  any particular  year,  it is  going to  have a  great                                                               
impact for future generations.   Doing things in this legislation                                                               
that  stifle  production or  take  oil  out  of TAPS  will  cause                                                               
multiple years  to restart  an industry  that is  bleeding money.                                                               
That will have tremendous impact,  probably not today but it will                                                               
in 10 years.  The price will be  paid for what is done and it can                                                               
either  be  paid  now  and preserve  the  production  for  future                                                               
generations or  the money can be  taken now and provide  for this                                                               
generation and  abandon future generations.   He said he  did not                                                               
come  to the  legislature to  abandon future  generations, or  to                                                               
preserve the  status quo, or to  continue to fund what  he thinks                                                               
is government  that is  a bit out  of control.   He came  to make                                                               
this  place  better  for  his   family,  his  children,  and  his                                                               
grandchildren.   The legislation that  the committee is  going to                                                               
pass  has  tremendous  financial   impacts,  he  said.    Whether                                                               
tomorrow or  in 10  years, the  bill will come  due and  he would                                                               
rather pay it today  so that he is the one  to suffer rather than                                                               
future generations.                                                                                                             
                                                                                                                                
REPRESENTATIVE JOSEPHSON agreed  with Representative Johnson that                                                               
Amendment 44 would  impact the oil and gas industry  in both Cook                                                               
Inlet  and the  North  Slope.   Industry  may  decide to  develop                                                               
elsewhere in some  circumstances.  But, he continued,  he is also                                                               
worried about  the $283  million cut by  the legislature  and the                                                               
job losses from  that.  It is also important  that the impacts of                                                               
these  credits be  made more  transparent.   It is  this guessing                                                               
game  where  the  administration  violates  a  law  if  it  tells                                                               
legislators what  is working.   It is a  bizarre system.   One of                                                               
the  PowerPoints  presented to  the  committee  showed that  $900                                                               
million has been  spent on Cook Inlet and $450  million of it did                                                               
not produce anything.   He said he supports  Amendment 44 because                                                               
it goes to the whole heart of the matter.                                                                                       
                                                                                                                                
REPRESENTATIVE HERRON maintained his objection to Amendment 44.                                                                 
                                                                                                                                
9:21:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  concluded her  explanation of  Amendment 44.                                                               
She said if she thought Amendment  44 would in any way compromise                                                               
the future  she would not have  introduced it.  Her  concern, she                                                               
continued,  is the  potential for  a recession  today and  people                                                               
leaving  Alaska.   Because she  sees  a more  immediate sense  of                                                               
urgency about that, and if it  can be addressed today and quality                                                               
of  life and  essential  state services  maintained,  as well  as                                                               
investing  in education  to provide  the well  educated workforce                                                               
that  is needed  to have  a  thriving economy,  then the  state's                                                               
future will be  sound.  The current situation is  a negative cash                                                               
flow for  both the state  and the  companies.  Keeping  the state                                                               
afloat  right now  is the  savings  earned during  the regime  of                                                               
Alaska's Clear  and Equitable Share  [House Bill 2001,  passed in                                                               
2007, Twenty-Fifth Alaska State  Legislature] and the 2008 record                                                               
high  price  of  about  $140  a  barrel.    The  state's  partner                                                               
companies  during  that  same  time   period  were  also  earning                                                               
billions of  dollars on an annual  basis and just like  the State                                                               
of Alaska  had to save money  for tough times.   For example, the                                                               
publically posted annual  profits for BP were $2  billion in 2008                                                               
and almost  $2 billion  in 2009; for  ConocoPhillips it  was $2.3                                                               
billion in 2008, $1.5 billion in  2009, and $1.7 billion in 2010.                                                               
The state's  "savings spree" of $18  billion is what is  going to                                                               
carry  it  through  and  there  should  be  that  same  level  of                                                               
expectation of the companies that  had record profits during that                                                               
time.    She  expressed  her  concern that  the  burden  be  less                                                               
weighted on  individual Alaskans  in order to  get to  the future                                                               
that  is wanted.    She  pointed out  that  similar concerns  are                                                               
shared, but the pathways seen for getting there are different.                                                                  
                                                                                                                                
9:24:33 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted in favor of Amendment  44.  Representatives Seaton, Herron,                                                               
Chenault, Johnson, Olson, Talerico,  and Nageak voted against it.                                                               
Therefore, Amendment 44 failed by a vote of 2-7.                                                                                
                                                                                                                                
9:25:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TARR moved  to adopt  Amendment  45, labeled  29-                                                               
GH2609\P.57, Nauman/Shutts,  3/21/16.  [Amendment 45  is provided                                                               
at the end of the minutes on HB 247.]                                                                                           
                                                                                                                                
REPRESENTATIVE OLSON objected to the amendment.                                                                                 
                                                                                                                                
REPRESENTATIVE JOHNSON objected to the amendment.                                                                               
                                                                                                                                
9:25:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  explained Amendment  45.  She  recalled that                                                               
the  issue  of  confidentiality  came up  repeatedly  during  the                                                               
committee's  conversations  relative  to   the  sections  in  the                                                               
original  version of  the  bill.   The  committee heard  concerns                                                               
about confidentiality from ExxonMobil  Corporation and Alaska Oil                                                               
and  Gas  Association  (AOGA),  and she  followed  up  with  them                                                               
afterward regarding  working on language.   She related  that she                                                               
requested  an  amendment  [from Legislative  Legal  and  Research                                                               
Services] using  the confidentiality  language that was  put into                                                               
the final  version of  Senate Bill 138  [passed in  2014, Twenty-                                                               
Eighth Alaska  State Legislature].   This language is  in Section                                                               
24(b)(12)(B) on page 17 and states:                                                                                             
                                                                                                                                
     "the  commissioner may  share confidential  information                                                                    
     obtained  under  this  paragraph with  members  of  the                                                                    
     legislature, their  agents, and contractors  on request                                                                    
     under confidentiality agreements,  either in committees                                                                    
     held in executive session or individually;"                                                                                
                                                                                                                                
REPRESENTATIVE TARR pointed out  that the aforementioned language                                                               
in Senate Bill 138 is, in  turn, modeled off of language that was                                                               
included in  the Alaska  Gasline Inducement  Act (AGIA)  [HB 177,                                                               
passed in  2007, Twenty-Fifth Alaska  State Legislature].   Thus,                                                               
she  said, there  was some  consistency in  these confidentiality                                                               
provisions.                                                                                                                     
                                                                                                                                
REPRESENTATIVE TARR continued, explaining  that the amendment she                                                               
requested [from Legislative Legal  and Research Services] did not                                                               
show up.   But, what did show up was  some language that industry                                                               
had worked on and then forwarded  to the co-chairs, which is what                                                               
is seen in  Amendment 45.  In addition to  having those same type                                                               
of provisions,  it is more  explicit in the types  of information                                                               
that can be shared.  One  major difference is that [the amendment                                                               
she  had requested]  did not  have any  civil penalties  or fines                                                               
associated with  it.  However,  the penalties and  fines included                                                               
in Amendment 45 give the industry  a higher level of comfort that                                                               
this  important confidential  tax  information  could be  shared.                                                               
While she  did not  get to  talk to  [industry], she  can imagine                                                               
that having  two protective provisions  would be better  than one                                                               
from [industry's] perspective.                                                                                                  
                                                                                                                                
REPRESENTATIVE  TARR stated  that the  tremendous challenge  with                                                               
trying to figure out which  opportunities to take advantage of is                                                               
not knowing well enough how they  are working.  She can look back                                                               
at last year  and know $900 million was spent  in the Cook Inlet,                                                               
and  that $450  million led  to production  and $450  million did                                                               
not.   For  the North  Slope, she  believed, the  expenditure was                                                               
more than $1.2  billion with a two-thirds split  between what led                                                               
to  production  and  what  did  not.   Beyond  that  she  has  no                                                               
information and  that makes it  very difficult.  Clearly  what is                                                               
trying  to   be  accomplished   here  is  credit   programs  that                                                               
incentivize the  right kind of behavior  so there are no  gaps in                                                               
exploration, development,  or production.  That  is the intention                                                               
here and the  expectation should be just like  when reviewing gas                                                               
contracts  and  legislators  have  an  opportunity  to  sign  the                                                               
confidentiality agreement.  She said  she can be comfortable with                                                               
the penalties  included in Amendment  45 because she  can imagine                                                               
why industry wants protection of this important information.                                                                    
                                                                                                                                
9:30:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  noted  there  are  rules  that  say  any                                                               
legislator can  attend an  executive session.   He  asked whether                                                               
there  is the  ability  to  prevent a  person  from attending  an                                                               
executive session if the person  has not signed a confidentiality                                                               
agreement but chooses to show up in an executive session.                                                                       
                                                                                                                                
                                                                                                                                
EMILY  NAUMAN, Attorney,  Legislative Legal  Counsel, Legislative                                                               
Legal and  Research Services, Legislative Affairs  Agency, Alaska                                                               
State Legislature, replied  that she does not know  the answer to                                                               
that question.   She said it  is a very valid  concern as Uniform                                                               
Rule 22(d) does prevent any  member of the legislature from being                                                               
excluded from  a legislative  session.   She said  she personally                                                               
does not  know the consequences  of enacting a law  that directly                                                               
conflicts  with one  of the  Uniform Rules.   She  suggested Doug                                                               
Gardner be asked the question when he is in the office tomorrow.                                                                
                                                                                                                                
REPRESENTATIVE JOHNSON responded that there is no tomorrow.                                                                     
                                                                                                                                
MS. NAUMAN apologized  for not knowing the answer off  the top of                                                               
her head, but added she would be happy to look into it.                                                                         
                                                                                                                                
9:31:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  stated that he  sees a real  problem with                                                               
the aforementioned.   Secondly,  he said, he  would like  to know                                                               
the  definition of  "industry" when  the statement  is made  that                                                               
"industry" supports the amendment.                                                                                              
                                                                                                                                
REPRESENTATIVE  TARR answered  that  [Senate Bill  138 and  AGIA]                                                               
passed  with this  same  language  and there  have  not been  any                                                               
challenges to  that.   She reread the  language from  Senate Bill                                                               
138 and  said the  language is  very similar  in nature  with the                                                               
exception  of  having  a  penalty.   She  pointed  out  that  the                                                               
executive session  provision from  the Uniform Rules  was brought                                                               
to  her attention  today through  a  memorandum from  Legislative                                                               
Legal and Research Services.   She surmised committee members may                                                               
have seen the memorandum.                                                                                                       
                                                                                                                                
REPRESENTATIVE JOHNSON responded he has not seen the memorandum.                                                                
                                                                                                                                
REPRESENTATIVE TARR, continuing,  said this did not  come up with                                                               
Senate Bill  138.  She reiterated  that that is the  language she                                                               
had originally requested  and that was because she  had not heard                                                               
back from AOGA in her  request to both ExxonMobil Corporation and                                                               
to AOGA  for suggestions because  they were the ones  saying they                                                               
had trouble  with what pieces  of information would  be released.                                                               
This would be  a way of getting around that  because it would not                                                               
be  made  public,  it  would   only  be  made  available  to  the                                                               
policymakers.  Legislators went through  the same thing under the                                                               
Stranded  Gas Development  Act [House  Bill 16,  passed in  2003,                                                               
Twenty-Third  Alaska  State  Legislature],  so  there  are  three                                                               
instances where  the legislature has  used the same  mechanism to                                                               
get at that  information and there have not  been any challenges.                                                               
Regarding "industry," she said she  reached out to Kevin Jardell,                                                               
lobbyist  for ExxonMobil  Corporation.   Mr. Jardell  stated, and                                                               
this  was echoed  in  committee,  that AOGA  would  like to  come                                                               
forward because AOGA works something  through all of its industry                                                               
members  to get  some level  of  uniformity and  acceptance of  a                                                               
particular policy.   She noted  that this language  was forwarded                                                               
to her  as well  as to Rena  Delbridge, staff  for Representative                                                               
Hawker.                                                                                                                         
                                                                                                                                
9:34:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON,  in regard  to  the  other three  bills,                                                               
stated that  just because  the legislature did  it once  or three                                                               
times does not  make it right.  While  ExxonMobil Corporation may                                                               
have  said  it is  okay,  that  company  does not  represent  the                                                               
industry and he  believes others may have a different  view.  Not                                                               
every company is  a member of AOGA,  so he does not  want to make                                                               
the blanket  statement that industry  approves of this.   He said                                                               
he  would like  to  hear the  opinion  of ConocoPhillips  Alaska,                                                               
Inc., a company that is not a member  of AOGA and that is a major                                                               
player on the North Slope.                                                                                                      
                                                                                                                                
MICHAEL  HURLEY,  Director,  Government Relations  and  Community                                                               
Affairs,  ConocoPhillips   Alaska,  Inc.,  testified   that  this                                                               
afternoon was the first he  had seen this particular language and                                                               
it brought up two concerns for  his company.  The first being one                                                               
of process.  The process laid  out in this amendment is basically                                                               
a  discussion between  the Department  of Revenue  (DOR) and  the                                                               
legislature.   As laid out,  there is  no notice to  the company.                                                               
So, the legislature could schedule  the meeting tomorrow with DOR                                                               
and talk about all of  ConocoPhillips's confidential data and tax                                                               
information and  he would not know  about it.  He  would not know                                                               
who was  there, what  was being talked  about, what  records were                                                               
being produced.  The process just  seems flawed to him in that it                                                               
could happen to any particular company  and there are quite a few                                                               
companies that  are not  members of  AOGA.   Therefore, it  was a                                                               
little disconcerting to  have a process laid  out where companies                                                               
would not even know what was going  on or even that a meeting had                                                               
occurred.                                                                                                                       
                                                                                                                                
9:37:19 PM                                                                                                                    
                                                                                                                                
MR. HURLEY continued,  saying the second issue  that concerns his                                                               
company  is why  that  meeting would  occur.   He  has heard  the                                                               
discussion about lack of transparency  or information.  In regard                                                               
to  the  examples  talked  about by  Representative  Tarr  a  few                                                               
minutes ago, would  sitting down and looking at  what tax credits                                                               
ConocoPhillips took in  2015 really tell legislators  how to make                                                               
policy for the whole state going  forward?  He said he doubts it,                                                               
because  it often  takes years  to mature  and get  to the  point                                                               
where the  company knows  whether something  is successful.   For                                                               
example,  if  legislators had  looked  at  BP's tax  returns  and                                                               
credits for the  Badami oil field they would have  thought BP had                                                               
a  success.   But everyone  knows  that did  not play  out.   The                                                               
judgement  of  whether  a  tax   credit  program  is  or  is  not                                                               
successful is  one that is made  over a long period  of time, not                                                               
by looking  at a  particular company's tax  credits for  the last                                                               
year, it is not the nature of the business.                                                                                     
                                                                                                                                
MR. HURLEY  stated it  would concern  him if  legislators started                                                               
making  decisions based  on  looking at  a  company's tax  credit                                                               
usage and  then trying  to make  policy that  applies to  all tax                                                               
credits.    The  IRS  has  very,  very  strict  codes  about  how                                                               
confidential information  with the IRS can  be used.  One  of the                                                               
reasons the  IRS does that, one  of the reasons the  IRS has very                                                               
strict  rules, is  because  what the  IRS does  not  want to  see                                                               
happen  is have  the kind  of tax  credit process  turned into  a                                                               
political  process  where  people  sit  around  in  an  executive                                                               
session and  decide who  they do  or do not  like, and  that they                                                               
want one company  to have more credits and  another less credits.                                                               
Starting  to look  into people's  individual tax  returns to  see                                                               
what they  did or  did not  do seems  to be  the road  down which                                                               
people could go.                                                                                                                
                                                                                                                                
9:40:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  said he  respectfully has  some concern                                                               
in regard to Mr. Hurley's testimony.   The first issue raised was                                                               
that  the industry  would not  know who  attended [the  executive                                                               
session].    As he  reads  the  amendment  he  is not  sure  what                                                               
industry  would  do  with that  information  anyway,  because  if                                                               
someone approached a legislator and  said, "I don't know what you                                                               
heard, but let me tell  you something," the legislator would have                                                               
to play dumb.  The second point  that a company would not know in                                                               
year one,  two, or  three, and  while he does  not know  what the                                                               
retroactivity of the amendment is,  he thinks the industry should                                                               
expect  that with  the state  paying $800  million or  more there                                                               
might be  some constituents who are  going to ask about  that and                                                               
legislators could  learn something.    For  example, it  might be                                                               
found that an  area near Teshekpuk Lake is  just fruitless, there                                                               
is no oil to  develop there, or that the west  side of Cook Inlet                                                               
near  Shelikof Strait  is too  far south  and nothing  bore fruit                                                               
there.  He  does not know, but he is  very interested in knowing.                                                               
Stating respect  for Mr. Hurley, he  said he sensed it  was being                                                               
said that legislators cannot sort  it out or make good judgements                                                               
based on the information.   That is important because legislators                                                               
are already  making blanket judgements  about what  percentage of                                                               
QCE and whether it should  be statewide and legislators are doing                                                               
this with very little knowledge.   So, his response to Mr. Hurley                                                               
is,  "Right back  at you  with great  respect."   Legislators are                                                               
already making  blanket statements about  what does and  does not                                                               
work but while flying sort of blind.                                                                                            
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  continued.   Addressing  Amendment  45                                                               
itself, he  said he has  concerns only in that  some legislators,                                                               
one example  being Senator Berta  Gardner, do not generally  as a                                                               
principle sign  confidentiality agreements  because then  she has                                                               
to "ring  fence" in her own  mind when she is  talking to people.                                                               
All  legislators  do that  to  some  degree,  but there  is  that                                                               
censoring and a criminal penalty would  make a person censor in a                                                               
hurry.  Additionally, he thinks  some constituents might call him                                                               
asking why he is privy  to this information while the constituent                                                               
is not.   But,  if this  is the best  that can  be gotten,  it is                                                               
something, and no one has  to sign the confidentiality agreement.                                                               
The process must  be started of figuring out what  is working, he                                                               
said, and therefore he supports the amendment.                                                                                  
                                                                                                                                
9:43:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT said  he  is not  sure  where he  really                                                               
wants  to go  with  this.   He  noted  he has  not  been on  this                                                               
committee  for  the last  10-14  years  like some  members  have.                                                               
Those  members get  to go  through this  on a  regular basis  and                                                               
maybe things stick in  their minds that do not stick  in his.  He                                                               
said  if  his memory  is  correct  he  does  not think  that  the                                                               
Department of  Law liked  the provision that  was in  Senate Bill                                                               
138, and  he is not  sure that the  provisions are all  the same.                                                               
He  asked  whether  the  Department  of Law  has  a  position  on                                                               
Amendment 45.                                                                                                                   
                                                                                                                                
MARY  HUNTER   GRAMLING,  Assistant  Attorney   General,  Natural                                                               
Resources  Section, Civil  Division (Juneau),  Department of  Law                                                               
(DOL),  responded that  there  are  conflicting attorney  general                                                               
opinions  that  are  public  on   the  issue  of  confidentiality                                                               
agreements  in executive  session on  tax issues.   She  believed                                                               
that  the   current  attorney   general  and   Governor  Walker's                                                               
administration overall are very much  in favor of transparency in                                                               
government and  just based on  that policy she thinks  they would                                                               
be opposed to executive sessions as  a policy matter.  There have                                                               
been conflicting legal  issues on this and DOL  has not published                                                               
a  formal  attorney  general  opinion on  this  issue  with  this                                                               
attorney general  and so she  cannot say anything more  than that                                                               
she thinks  as a general policy  matter they would be  opposed to                                                               
it.  Even the most lenient  of the attorney general opinions that                                                               
was in  favor of executive sessions  did say that there  was risk                                                               
to  the  department  and  the employees  when  they  appeared  in                                                               
executive  sessions,  she  continued.     This  statute  is  very                                                               
explicit, so  it might  help mitigate some  of the  risks because                                                               
this sort  of statute  was not in  existence when  those opinions                                                               
were drafted.   However,  as transparency is  a hallmark  of this                                                               
administration, she does not feel  comfortable saying whether DOL                                                               
would  support it  other than  noting that  there is  conflicting                                                               
attorney general  opinions and Governor  Walker and  the attorney                                                               
general are very much in favor of transparency when possible.                                                                   
                                                                                                                                
9:46:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  requested Ms.  Delbridge to  address the                                                               
statement  that the  language  in  ACES and  Senate  Bill 138  is                                                               
similar, because he does not remember this.                                                                                     
                                                                                                                                
MS.  DELBRIDGE responded  she cannot  recall off  the top  of her                                                               
head the specific terms of the  AGIA provisions.  She was able to                                                               
refresh herself on  the Senate Bill 138 provisions  and those are                                                               
in  AS  38.05.020(B),  which  allowed  the  department  to  share                                                               
confidential information  under a confidentiality agreement.   It                                                               
did  not  require legislators  to  be  meeting  in some  kind  of                                                               
session committee format  in order to receive that.   It provided                                                               
for  individual meetings  or meetings  outside of  that framework                                                               
that might run into those conflicts  with the Uniform Rule.  That                                                               
was  a slightly  different context  in  the sense  that that  was                                                               
sharing informing that  is held proprietary by a  project and so,                                                               
she believed, the agreement was  linked to another agreement with                                                               
a project  to provide that access  and in this instance  it is an                                                               
entity  providing access  to  confidential taxpayer  information.                                                               
The  language in  Amendment  45 certainly  is  modeled after  the                                                               
concept  in Senate  Bill 138,  but it  is slightly  different, in                                                               
particular in Senate Bill 138  it allowed for legislators to make                                                               
sure  that their  agents, their  consultants, staff,  people they                                                               
felt important  to be present  for that information  sharing, are                                                               
also there and Amendment 45 provides for that as well.                                                                          
                                                                                                                                
REPRESENTATIVE  CHENAULT  read  aloud from  Uniform  Rule  22(d),                                                               
which states in its entirety:                                                                                                   
                                                                                                                                
     The provisions of  this rule may not  be interpreted as                                                                    
     permitting  the  exclusion  of  a  legislator  from  an                                                                    
     executive session,  whether or not the  legislator is a                                                                    
     member of the  body that is meeting.   A legislator not                                                                    
     a  member  of the  body  holding  an executive  session                                                                    
     shall,  however,  be  subject  to  the  same  rules  of                                                                    
     confidentiality  and  decorum  as  pertain  to  regular                                                                    
     members of the body.                                                                                                       
                                                                                                                                
REPRESENTATIVE CHENAULT surmised  that "rules of confidentiality"                                                               
could be  interpreted to  mean the  signing of  a confidentiality                                                               
agreement.                                                                                                                      
                                                                                                                                
9:49:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  recalled that  during  AGIA  he signed  a                                                               
confidentiality agreement  and went  over to  the room  and found                                                               
stacks of books about compressors  and other things of no meaning                                                               
to him,  and that was  the last confidentiality agreement  he has                                                               
signed.   He noted  he has  been in the  legislature for  quite a                                                               
while and gone through a number  of these and the legislature has                                                               
not  had a  problem forming  policy.   The legislature  sometimes                                                               
gets knocked  because it wants  to change something and  is asked                                                               
whether a  study has been done  showing what the effect  will be,                                                               
but the  legislature has  not cared  because its  job is  to form                                                               
policy.  The legislature looks at  the best information it can to                                                               
see what  might be the effect  and consultants are brought  in to                                                               
provide what  is projected  to be  the effect.   The  effect will                                                               
never  be known  until the  policy is  done.   He said  he really                                                               
wants to  see transparency, but when  going down to the  level of                                                               
looking  at the  data of  individual taxpayers  he is  unsure how                                                               
legislators would use that because it  is a broader scope that is                                                               
used.  Legislators need to make  policy for the state to the best                                                               
of their ability and he is  not sure that Amendment 45 would give                                                               
legislators the information on which to make policy.                                                                            
                                                                                                                                
REPRESENTATIVE  JOSEPHSON related  he  has received  a text  from                                                               
someone at  ExxonMobil that  seems to  indicate AOGA  approves of                                                               
this amendment  but not necessarily  ExxonMobil.  He  shared that                                                               
he was  in a telephone conference  with AOGA and this  appears to                                                               
be the amendment that AOGA approved  of.  He qualified that he is                                                               
using the word "approved" broadly.                                                                                              
                                                                                                                                
REPRESENTATIVE  HERRON said  he has  an overabundance  of caution                                                               
and  will  not support  Amendment  45,  but suggested  that  this                                                               
conversation should be further explored.                                                                                        
                                                                                                                                
9:53:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR argued  that Amendment 45 is one  of the most                                                               
important  amendments  offered  tonight.     She  disagreed  with                                                               
Representative Seaton  about the usefulness of  this information.                                                               
Because she has taught at a  university for 20 years she tends to                                                               
err on the side  of more information and be a  student as much as                                                               
possible to learn about things.   Therefore, she would delve into                                                               
this information  if she had  the opportunity  to.  Her  sense of                                                               
frustration is  that in  the original bill  there were  some very                                                               
limited provisions about releasing  information and industry said                                                               
that was  unacceptable.   She tried  to work  around that  and be                                                               
sensitive to any of the IRS  limitations so as to not do anything                                                               
that would  get anyone in trouble.   She looked back  at previous                                                               
work  the committee  has done  and  this was  a big  part of  the                                                               
conversation  about Senate  Bill 138.   She  put in  an amendment                                                               
that was  lost somewhere and which  she believed was sent  to the                                                               
co-chairs.   As a  result of  hearing from  AOGA things  are more                                                               
clearly delineated in Amendment 45  on page 2, subparagraphs (A),                                                               
(B), and (C).  She offered  her belief that this is language that                                                               
could be  acceptable and  that maintains  that privacy  but would                                                               
give  legislators   some  access.    This   is  really  important                                                               
information  for  legislators to  have  and  that could  be  very                                                               
instructive.  There is always the  opportunity to repeal a law if                                                               
it turns out to not be as helpful as was thought.                                                                               
                                                                                                                                
9:55:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR said  right now she feels  that her neighbors                                                               
are demanding to  have more of this information.   Right now this                                                               
bill  does  not  provide  any  opportunities  for  some  of  that                                                               
information to  be made public to  them.  However, it  could give                                                               
them some level  of comfort to know that she  has the opportunity                                                               
to see that information.  Some  of the amendments she has offered                                                               
are opportunities to  actually strengthen the work  that is being                                                               
done.  If,  for example, over a multi-year basis  she had had the                                                               
opportunity  to be  looking at  this information  she cannot  say                                                               
today how  that might influence what  she is thinking, but  it is                                                               
very  possible  that  her  understanding   of  something  is  not                                                               
correct.    By seeing  that  information  she  would be  able  to                                                               
correct those  errors in her own  mind.  She would  rather err on                                                               
the side of  having more information and to study  things as much                                                               
as possible  and to  understand at the  greatest level  of detail                                                               
what  the   implications  of   the  legislature's   actions  are.                                                               
Amendment  45  is  a  pretty  big ask  for  legislators  to  feel                                                               
comfortable  that   there  be  a  penalty   associated  with  any                                                               
disclosure of that information.   When trying to strike a balance                                                               
with  competing ideas  then sometimes  everybody gives  a little.                                                               
It would be her preference  that penalty language not be included                                                               
in the amendment, but she is willing  to give a little to go with                                                               
what the industry says it can  be comfortable with.  Equally this                                                               
should  be supported.   Legislators  should do  due diligence  in                                                               
understanding how these provisions work.   If the legislature was                                                               
going to  consider gas contracts then  legislators would probably                                                               
all sign confidentiality agreements  so they could understand the                                                               
detailed provisions of those documents.                                                                                         
                                                                                                                                
REPRESENTATIVE TARR  further noted her appreciation  for Governor                                                               
Walker's  policy  directive  that  transparency is  key  for  his                                                               
administration.   But, there  are limitations  to that,  there is                                                               
not the  opportunity to release  this kind of information,  it is                                                               
confidential taxpayer information.   [Amendment 45] would provide                                                               
the  opportunity to  do  that in  a very  limited  scope for  the                                                               
people who need  to understand it and make the  policy.  It would                                                               
provide  that  information in  a  private  way  and it  would  be                                                               
legally prohibited from sharing outside of  that.  If that is the                                                               
best that can  be done, then that  is the best that  can be done,                                                               
and she would ask committee members to support the amendment.                                                                   
                                                                                                                                
9:58:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON maintained his objection to Amendment 45.                                                                
                                                                                                                                
A roll call  vote was taken.  Representatives  Josephson and Tarr                                                               
voted in favor  of Amendment 45.   Representatives Olson, Seaton,                                                               
Herron,  Chenault, Johnson,  Talerico, and  Nageak voted  against                                                               
it.  Therefore, Amendment 45 failed by a vote of 2-7.                                                                           
                                                                                                                                
9:59:36 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 9:59 p.m. to 10:07 p.m.                                                                      
                                                                                                                                
10:07:56 PM                                                                                                                   
                                                                                                                                
CO-CHAIR  NAGEAK noted  that Representative  Seaton will  offer a                                                               
new version of Amendment 4.                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  Amendment 4,  labeled 29-                                                               
GH2609\P.59, Nauman/Shutts, 3/22/16, which read:                                                                                
                                                                                                                                
     Page 8, line 18:                                                                                                           
          Delete "The"                                                                                                          
          Insert "Subject to the limitations in (k) of this                                                                 
     section, the [THE]"                                                                                                    
                                                                                                                                
     Page 8, lines 22 - 24:                                                                                                     
          Delete "The department may not purchase a total                                                                   
     of more  than $200,000,000  in tax  credit certificates                                                                
     from a person in a calendar year."                                                                                     
                                                                                                                                
     Page 8, line 31:                                                                                                           
          Delete    "$200,000,000   limitations    in   this                                                                
     subsection"                                                                                                            
          Insert "limitations in (k) of this section"                                                                       
                                                                                                                                
     Page 9, line 11:                                                                                                           
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 9, following line 21:                                                                                                 
          Insert a new subsection to read:                                                                                      
          "(k)  In a calendar year, the department may not                                                                      
     purchase  tax  credit  certificates issued  under  this                                                                    
     chapter   if  the   sum   of   the  purchases   exceeds                                                                    
     $50,000,000  a person  or $200,000,000  a unit.  If the                                                                    
     total of  the credit  purchases applied for  under this                                                                    
     section  and   subject  to   the  limitation   in  this                                                                    
     subsection  exceeds   $200,000,000  for  a   unit,  the                                                                    
     department  shall prorate  the purchase  of tax  credit                                                                    
     certificates based  on ownership interest in  the unit.                                                                    
     When  calculating   a  sum  of  purchases   under  this                                                                    
     subsection, the  department shall include  amounts used                                                                    
     to reduce  an outstanding  liability under (j)  of this                                                                    
     section."                                                                                                                  
                                                                                                                                
REPRESENTATIVE OLSON objected to the amendment.                                                                                 
                                                                                                                                
10:08:24 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SEATON  explained Amendment 4.   He recounted that                                                               
the committee dealt with the  subject of a $25 million limitation                                                               
on  the  net  operating  loss  proposed  in  the  original  bill.                                                               
[Version P]  changed that to  $200 million.   He pointed  out the                                                               
difficulty  of  a  large  development in  which  there  could  be                                                               
multiple companies  and the  $200 million  per company  could run                                                               
the state into a very difficult  problem of paying the credits it                                                               
would  be  obligated  to  pay.    Amendment  4  would  limit  the                                                               
redemption in a  tax year to $50 million per  person, which means                                                               
company, and limits  an aggregate redemption to  $200 million for                                                               
each unit.   He explained that a  unit looks over a  pool of oil,                                                               
it  is a  project,  and is  something that  is  definable.   This                                                               
amendment  recognizes   the  $200  million  that   the  co-chairs                                                               
submitted  in [Version  P] but  would get  around the  problem of                                                               
multiple companies coming  in and being partners  in that project                                                               
and the state  suddenly having much more liability.   Amendment 4                                                               
would not affect the earning of  the tax credits, only the timing                                                               
of  the cash  redemption by  the state.   Amendment  4 would  not                                                               
impact  people using  tax  credits to  offset  against their  tax                                                               
liability,  so  it would  only  be  about  the  cash out  of  the                                                               
treasury.                                                                                                                       
                                                                                                                                
REPRESENTATIVE SEATON  continued his explanation of  Amendment 4.                                                               
He recalled the  theoretical project on the North  Slope from Mr.                                                               
Armstrong's  testimony [Armstrong  Oil &  Gas Inc.],  which could                                                               
reach $800 million a  year.  He noted it is  now known that today                                                               
the state does  not have that kind  of income.  It  could be that                                                               
next year the state will have  zero net money from production tax                                                               
under  the  current  law.    Amendment 4  would  give  twice  the                                                               
individual  company redemption  of  the original  bill and  would                                                               
protect  the   state  budget  from  volatile   and  unpredictable                                                               
liability.   The committee has  discussed this issue a  number of                                                               
times trying  to find a solution  and doing it by  the unit means                                                               
that  the   state  would  be  protected   against  those  outlier                                                               
conditions  that  could be  very  large.   Representative  Seaton                                                               
concluded his  explanation of  Amendment 4 by  adding that  it is                                                               
the solution that  the co-chairs were trying to find  in the $200                                                               
million  solution and  how to  protect the  state from  potential                                                               
large liabilities, and it would  double what the original version                                                               
of the bill brought forward for individual companies.                                                                           
                                                                                                                                
10:11:59 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE OLSON maintained his objection to Amendment 4.                                                                   
                                                                                                                                
A roll call  vote was taken.   Representatives Seaton, Josephson,                                                               
and  Tarr  voted  in  favor  of  Amendment  4.    Representatives                                                               
Johnson,  Olson, Herron,  Chenault,  Talerico,  and Nageak  voted                                                               
against it.  Therefore, Amendment 4 failed by a vote of 3-6.                                                                    
                                                                                                                                
10:12:55 PM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 10:12 p.m. to 10:15 p.m.                                                                     
                                                                                                                                
10:15:29 PM                                                                                                                   
                                                                                                                                
CO-CHAIR TALERICO moved to report the  CS for HB 247, Version 29-                                                               
GH2609\P,  Shutts, 3/18/16,  as  amended, out  of committee  with                                                               
individual recommendations and the accompanying fiscal notes.                                                                   
                                                                                                                                
REPRESENTATIVE TARR objected for the purpose of discussion.                                                                     
                                                                                                                                
10:15:51 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  TARR  stated  that  the  committee  has  had  the                                                               
opportunity  during  the  amendments   to  talk  about  the  more                                                               
holistic view of what is currently  going on in the state and how                                                               
this legislation might fit into it.   She said she was hoping the                                                               
committee would  produce a  bill that  she could  support because                                                               
she feels it is one of  the most important components of the only                                                               
fiscal plan that has been suggested  to legislators so far by the                                                               
governor.   She  cannot  support  the bill  in  its current  form                                                               
because other proposals  are being considered and  there just are                                                               
not that many options.  There  is a $4.1 billion deficit and very                                                               
few  options   for  where   that  gap  will   be  filled.     She                                                               
characterized the  current version of the  bill as unrecognizable                                                               
relative to  the bill's original  version, and said that  in many                                                               
ways  the committee  really  worked on  two  different pieces  of                                                               
legislation.  The  current version will not get the  state on the                                                               
path to sustainability  and that the state can  afford.  Children                                                               
are being told their education dollars  have to be cut and senior                                                               
benefits  are   being  cut  because   the  state   cannot  afford                                                               
everything.  She  said she is shocked that  the legislature would                                                               
move  forward  with  proposals  like  that  without  sharing  the                                                               
burden.  She said she fears for the state.                                                                                      
                                                                                                                                
10:17:49 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON offered  his appreciation for everything                                                               
done by  the co-chairs, saying  it has been appropriate  in terms                                                               
of procedure  and courtesies.   He said he  shares Representative                                                               
Tarr's concerns.   A theme heard tonight is that  there is a real                                                               
cause for  alarm if  the credits  are not in  place as  they are.                                                               
But they could  be even more generous,  and so if the  goal is to                                                               
incentivize then even  more could be done.  It  was just 10 years                                                               
ago that the incentives were $53  million, now they are over $600                                                               
million and are projected to be  $800 million.  The Department of                                                               
Environmental Conservation  (DEC) is  a $20 million  general fund                                                               
(GF) budget,  so the  state could  do 25  DECs on  these credits.                                                               
Next year the number grows.   The increase is 1,600 percent since                                                               
2007.   He said he thought  that the Senate working  group's work                                                               
and its recommendations of using a  hard 4 percent floor would be                                                               
a  common   denominator,  that  that   would  be  at   least  the                                                               
committee's  own floor  for the  CS.   He also  thought that  the                                                               
discussion of inadvertence, something  talked about by enalytica,                                                               
would have  been a  source to  say, "oh  well this  wasn't vetted                                                               
very well by  the Senate Bill 21 committees  because the economic                                                               
climate was so different."                                                                                                      
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  recalled  that earlier  today  it  was                                                               
heard  that  the net  operating  loss  (NOL)  is designed  to  be                                                               
commensurate with  the tax  rate.   He charged  that that  is not                                                               
true because the bill reduces the  NOL and it is not commensurate                                                               
with the  tax rate in  Cook Inlet right  now anyway, so  the idea                                                               
that the  net operating loss  should match  the tax rate  just is                                                               
not true.   He  further recalled hearing  earlier today  that the                                                               
state  wants industry  to spend  even  when it  is losing  money.                                                               
There is evidence that that is  absolutely true, but he thinks it                                                               
needs to  be much  less true.   He is  surprised that  given that                                                               
next year  the state is going  to spend $825 million  on this and                                                               
bring in  $680 million,  he would have  thought that  there would                                                               
have  been   real  sense  of   urgency,  like  this   is  totally                                                               
unsustainable.    With all  of  the  aforementioned he  has  real                                                               
concern even though  he realizes this is not the  end of the road                                                               
for  this  bill unless  it  does  not  move.   He  expressed  his                                                               
surprise that  there is  the feeling that  the state  must double                                                               
down  on  these  credits  when  the  industry  itself  is  making                                                               
cutbacks.                                                                                                                       
                                                                                                                                
10:20:58 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE SEATON drew attention to  the fiscal note [for the                                                               
original version  of the bill]  for component number  2894, which                                                               
is  over $926  million  for  capitalizing the  [oil  and gas  tax                                                               
credit] fund.   He pointed out that this is  not addressed in the                                                               
CS.  Therefore,  the fiscal note is just "hanging  out there" and                                                               
he would  suggest that  to follow  the bill  and have  the fiscal                                                               
note be  appropriate to  the bill the  committee should  zero out                                                               
that fiscal note  and let the House Finance  Committee address it                                                               
in the  appropriate way.  Previously  in committee Representative                                                               
Hawker has  found that when  a fiscal note was  not significantly                                                               
attached  to the  bill the  committee has  zeroed out  the fiscal                                                               
note to let the House Finance Committee appropriately do it.                                                                    
                                                                                                                                
REPRESENTATIVE   JOHNSON  agreed   with  Representative   Seaton.                                                               
Rather than  a zero fiscal note  he suggested the fiscal  note be                                                               
indeterminate.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  TARR thanked  the co-chairs  and their  staff for                                                               
their good work.                                                                                                                
                                                                                                                                
10:23:22 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOHNSON moved  to adopt  an indeterminate  fiscal                                                               
note  as opposed  to the  current fiscal  note.   There being  no                                                               
objection, an indeterminate fiscal  note was adopted to accompany                                                               
the committee substitute.                                                                                                       
                                                                                                                                
10:23:55 PM                                                                                                                   
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
10:24:34 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOHNSON  clarified he meant for  both fiscal notes                                                               
to be indeterminate, not just one.                                                                                              
                                                                                                                                
CO-CHAIR TALERICO withdrew  his original motion to  report the CS                                                               
for  HB 247,  Version 29-GH2609\P,  Shutts, 3/18/16,  as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
10:25:00 PM                                                                                                                   
                                                                                                                                
CO-CHAIR TALERICO moved to report the  CS for HB 247, Version 29-                                                               
GH2609\P,  Shutts, 3/18/16,  as  amended, out  of committee  with                                                               
individual recommendations  and the amended  indeterminate fiscal                                                               
notes.                                                                                                                          
                                                                                                                                
REPRESENTATIVE TARR objected for the purpose of calling a vote.                                                                 
                                                                                                                                
A roll call  vote was taken.   Representatives Chenault, Johnson,                                                               
Olson, Seaton,  Herron, Talerico,  and Nageak  voted in  favor of                                                               
the  motion to  report the  CS for  HB 247,  Version 29-GH2609\P,                                                               
Shutts,  3/18/16, as  amended, out  of committee  with individual                                                               
recommendations  and  the  amended  indeterminate  fiscal  notes.                                                               
Representatives Tarr and Josephson  voted against it.  Therefore,                                                               
CSHB 247(RES)  was reported out  of the House  Resources Standing                                                               
Committee by a vote of 7-2.                                                                                                     
                                                                                                                                
10:26:46 PM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 10:26 p.m. to 10:29 p.m.                                                                     
                                                                                                                                
10:29:54 PM                                                                                                                   
                                                                                                                                
CO-CHAIR  NAGEAK thanked  the committee  members and  their staff                                                               
for their patience and hard work on HB 247.                                                                                     
                                                                                                                                
   AMENDMENTS to HB 247, VERSION 29-GH2609\P, Shutts, 3/18/16                                                               
                                                                                                                                
Amendment 18, 29-GH2609\P.28, Nauman/Shutts, 3/21/16:                                                                         
                                                                                                                                
     Page 5, line 8:                                                                                                            
          Delete "A"                                                                                                            
          Insert "Subject to the limitation in (q) of this                                                                  
     section, a [A]"                                                                                                        
                                                                                                                                
     Page 7, line 23:                                                                                                           
          Delete "A"                                                                                                            
          Insert "Subject to the limitation in (q) of this                                                                  
     section, a [A]"                                                                                                        
                                                                                                                                
     Page 8, following line 16:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 16. AS 43.55.023 is  amended by adding a new                                                                
     subsection to read:                                                                                                        
          (q)  For a calendar year starting on or after                                                                         
     January 1,  2017, to  qualify for  a credit  under this                                                                    
     section,  a producer  or explorer  shall, by  July 1 of                                                                    
     the year before  the credit is expected  to be claimed,                                                                    
     submit  to   the  commissioner  the  total   amount  of                                                                    
     expenditures  expected  to  be   claimed  in  the  next                                                                    
     calendar  year. To  receive a  credit after  January 1,                                                                    
     2017, the  commissioner shall approve the  amount under                                                                    
     this  subsection.  The  commissioner,  in  consultation                                                                    
     with  the commissioner  of natural  resources, may  not                                                                    
     approve  an amount  under  this  subsection unless  the                                                                    
     credit  is  necessary  to  make  the  activity  of  the                                                                    
     producer  or   explorer  economically   feasible.  This                                                                    
     subsection  does not  apply to  a credit  under (b)  of                                                                    
     this section."                                                                                                             
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, line 20:                                                                                                          
          Delete "16, and 17"                                                                                                   
          Insert "17, and 18"                                                                                                   
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 18, line 27:                                                                                                          
          Delete "18, 23, and 24"                                                                                               
          Insert "19, 24, and 25"                                                                                               
                                                                                                                                
     Page 18, line 28:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 18, line 31:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 2:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 5:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 8:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 10:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 14:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 22"                                                                                                      
                                                                                                                                
     Page 19, line 15:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 31 and 35"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "18 - 25, 27, 29, 32, and 33"                                                                                  
          Insert "19 - 26, 28, 30, 33, and 34"                                                                                  
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 37 and 38"                                                                                              
                                                                                                                                
Amendment 22, labeled 29-GH2609\P.38, Shutts, 3/21/16:                                                                        
                                                                                                                                
     Page 7, line 14:                                                                                                           
          Delete "and (b) - (d) [(a) - (d)] of this                                                                         
     section"                                                                                                                   
          Insert ", (b) - (d) [(a) - (d)] of this section,                                                              
     and AS 43.55.028(e)"                                                                                                   
                                                                                                                                
     Page 7, line 20, following "credit":                                                                                       
          Insert "and may not be applied to reduce a                                                                        
     transferee's total tax  liability under AS 43.55.011(e)                                                                
     by more than $100,000,000 in a calendar year"                                                                          
                                                                                                                                
     Page 8, following line 16:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "* Sec. 16. AS 43.55.025(h) is amended to read:                                                                     
          (h)    Subject     to    the     limitations    in                                                                
     AS 43.55.028(e),  a  [A]   producer  that  purchases  a                                                                
     production  tax   credit  certificate  may   apply  the                                                                    
     credits   against   its   production  tax   levied   by                                                                    
     AS 43.55.011(e)   for  up   to   $100,000,000  of   its                                                                
     production   tax   liability   in  a   calendar   year.                                                                
     Regardless  of  the price  the  producer  paid for  the                                                                    
     certificate, the producer may  receive a credit against                                                                    
     its  production tax  liability for  the full  amount of                                                                    
     the credit, but for not  more than the amount for which                                                                    
     the  certificate is  issued.  A  production tax  credit                                                                    
     allowed  under this  section may  not  be applied  more                                                                    
     than once."                                                                                                                
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 8, line 23:                                                                                                           
          Delete "$200,000,000"                                                                                             
          Insert "$100,000,000"                                                                                             
                                                                                                                                
     Page 8, line 24, following "year":                                                                                     
          Insert ". The amount by which a person has                                                                        
     reduced  the person's  production  tax liability  under                                                                
     AS 43.55.011(e)  by   using  transferable   tax  credit                                                                
     certificates    counts    toward    the    $100,000,000                                                                
     limitation"                                                                                                            
                                                                                                                                
     Page 8, line 31:                                                                                                           
          Delete "$200,000,000"                                                                                             
          Insert "$100,000,000"                                                                                             
                                                                                                                                
     Page 18, line 20:                                                                                                          
          Delete "16, and 17"                                                                                                   
          Insert "17, and 18"                                                                                                   
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 18, line 27:                                                                                                          
          Delete "18, 23, and 24"                                                                                               
          Insert "19, 24, and 25"                                                                                               
                                                                                                                                
     Page 18, line 28:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 18, line 31:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 2:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 5:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 8:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 10:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 14:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 22"                                                                                                      
                                                                                                                                
     Page 19, line 15:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 31 and 35"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "18 - 25, 27, 29, 32, and 33"                                                                                  
          Insert "19 - 26, 28, 30, 33, and 34"                                                                                  
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 37 and 38"                                                                                              
                                                                                                                                
Amendment 26, labeled 29-GH2609\P.40, Nauman/Shutts, 3/21/16:                                                                 
                                                                                                                                
     Page 1, line 1, following "Act":                                                                                         
          Insert "relating to confidential information                                                                        
     status and  public record status of  information in the                                                                  
     possession of the Department of Revenue;"                                                                                
                                                                                                                                
     Page 2, following line 31:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "* Sec. 6. AS 40.25.100(a) is amended to read:                                                                      
          (a)  Information in the possession of the                                                                             
     Department  of Revenue  that discloses  the particulars                                                                    
     of  the business  or  affairs of  a  taxpayer or  other                                                                    
     person,        including       information        under                                                                    
     AS 38.05.020(b)(11)    that    is    subject    to    a                                                                    
     confidentiality  agreement  under  AS 38.05.020(b)(12),                                                                    
     is not  a matter of  public record, except  as provided                                                                    
     in AS 43.05.230(i)  - (l)  [AS 43.05.230(i) OR  (k)] or                                                                
     for purposes of investigation  and law enforcement. The                                                                    
     information shall be kept  confidential except when its                                                                    
     production  is required  in an  official investigation,                                                                    
     administrative   adjudication   under  AS 43.05.405   -                                                                    
     43.05.499, or  court proceeding. These  restrictions do                                                                    
     not  prohibit the  publication of  statistics presented                                                                    
     in  a  manner  that   prevents  the  identification  of                                                                    
     particular reports and  items, prohibit the publication                                                                    
     of tax  lists showing  the names  of taxpayers  who are                                                                    
     delinquent and relevant information  that may assist in                                                                    
     the  collection of  delinquent taxes,  or prohibit  the                                                                    
     publication  of  records,  proceedings,  and  decisions                                                                    
     under AS 43.05.405 - 43.05.499."                                                                                           
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 3, following line 17:                                                                                                 
     Insert a new bill section to read:                                                                                         
       "* Sec. 8. AS 43.05.230 is amended by adding a new                                                                     
     subsection to read:                                                                                                        
          (l)  The following information for persons                                                                            
     claiming a credit under AS 43.55 is public:                                                                                
               (1)  the name of each person claiming a                                                                          
     credit under AS 43.55;                                                                                                     
               (2)  the aggregate amount of credits under                                                                       
     AS 43.55 claimed by the taxpayer in the calendar year,                                                                     
     except for the credit in AS 43.55.024(j); and                                                                              
               (3)  a description of the taxpayer's                                                                             
      activities that generated the credits claimed under                                                                       
     AS 43.55."                                                                                                                 
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, line 20:                                                                                                          
          Delete "Sections 7 - 9, 16, and 17"                                                                                   
          Insert "Sections 9 - 11, 18, and 19"                                                                                  
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
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          Insert "secs. 15, 16, 20, 25, and 26"                                                                                 
                                                                                                                                
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          Insert "sec. 23"                                                                                                      
                                                                                                                                
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          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
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          Delete "sec. 29"                                                                                                      
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     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 32 and 36"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "Sections 13, 14, 18 - 25, 27, 29, 32, and                                                                     
     33"                                                                                                                        
          Insert "Sections 15, 16, 20 - 27, 29, 31, 34, and                                                                     
     35"                                                                                                                        
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 38 and 39"                                                                                              
                                                                                                                                
Amendment 28, labeled 29-GH2609\P.54, Nauman/Shutts, 3/21/16:                                                                 
                                                                                                                                
     Page 8, following line 16:                                                                                                 
     Insert a new bill section to read:                                                                                         
      "* Sec. 16. AS 43.55.023 is amended by adding a new                                                                   
     subsection to read:                                                                                                        
          (q)  For the lease expenditures incurred toward a                                                                     
       credit under this section, a producer or explorer                                                                        
     shall                                                                                                                      
               (1)  agree, in writing, to the requirements                                                                      
    that    an    explorer     must    agree    to    under                                                                     
     AS 43.55.025(f)(2); and                                                                                                    
               (2)  submit to the Department of Natural                                                                         
     Resources all data that an explorer must submit under                                                                      
     AS 43.55.025(f)(2)."                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, line 20:                                                                                                          
          Delete "16, and 17"                                                                                                   
          Insert "17, and 18"                                                                                                   
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Delete "18, 23, and 24"                                                                                               
          Insert "19, 24, and 25"                                                                                               
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Delete "sec. 21"                                                                                                      
          Insert "sec. 22"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 31 and 35"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "18 - 25, 27, 29, 32, and 33"                                                                                  
          Insert "19 - 26, 28, 30, 33, and 34"                                                                                  
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 37 and 38"                                                                                              
                                                                                                                                
Amendment 30, labeled 29-GH2609\P.42, Shutts, 3/21/16:                                                                        
                                                                                                                                
     Page 3, lines 22 - 24:                                                                                                     
          Delete ", [(1) THE CLAIMANT DOES NOT HAVE AN                                                                      
         OUTSTANDING LIABILITY TO THE STATE FOR UNPAID                                                                          
     DELINQUENT TAXES UNDER THIS TITLE; AND (2)]"                                                                               
          Insert "(1) the claimant does not have an                                                                             
         outstanding liability to the state [FOR UNPAID                                                                         
     DELINQUENT TAXES UNDER THIS TITLE]; and (2)"                                                                               
                                                                                                                                
     Page 4, lines 3 - 5:                                                                                                       
          Delete ", [(1) THE CLAIMANT DOES NOT HAVE AN                                                                      
         OUTSTANDING LIABILITY TO THE STATE FOR UNPAID                                                                          
     DELINQUENT TAXES UNDER THIS TITLE; AND (2)]"                                                                               
          Insert "(1) the claimant does not have an                                                                             
         outstanding liability to the state [FOR UNPAID                                                                         
     DELINQUENT TAXES UNDER THIS TITLE]; and (2)"                                                                               
                                                                                                                                
     Page 4, lines 15 - 17:                                                                                                     
          Delete ", [(1) THE CLAIMANT DOES NOT HAVE AN                                                                      
         OUTSTANDING LIABILITY TO THE STATE FOR UNPAID                                                                          
     DELINQUENT TAXES UNDER THIS TITLE; AND (2)]"                                                                               
          Insert "(1) the claimant does not have an                                                                             
         outstanding liability to the state [FOR UNPAID                                                                         
     DELINQUENT TAXES UNDER THIS TITLE]; and (2)"                                                                               
                                                                                                                                
     Page 17, following line 6:                                                                                                 
          Insert a new bill section to read:                                                                                    
      "* Sec. 28. AS 43.99.950 is amended by adding a new                                                                   
     paragraph to read:                                                                                                         
               (3)  "outstanding liability to the state"                                                                        
     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."                                                                                               
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
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          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 31 and 35"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "29, 32, and 33"                                                                                               
          Insert "30, 33, and 34"                                                                                               
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 37 and 38"                                                                                              
                                                                                                                                
Amendment 32, labeled 29-GH2609\P.53, Nauman/Shutts, 3/21/16:                                                                 
                                                                                                                                
     Page 4, following line 20:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 10. 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 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,  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  five percent of                                                            
     the gross value at the point of production; 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 five  percent of the  gross value at the  point of                                                                
     production                                                                                                             
               [(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]."                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 5, following line 6:                                                                                                  
     Insert new bill sections to read:                                                                                          
        "* Sec. 12. 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 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 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                                                                    
     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)     zero   percent,  one   percent,  two                                                                    
     percent,  three percent,  [OR]  four  percent, or  five                                                                
     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 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   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)  five [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 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 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)   [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)                                                                
     [AS 43.55.011(f)(1) AND  (2)] for the  phrase "calendar                                                                    
     year for which the tax is due."                                                                                            
        * Sec. 13. 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) - (5) [(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."                                                                             
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, line 20:                                                                                                          
          Delete "16, and 17"                                                                                                   
          Insert "19, and 20"                                                                                                   
                                                                                                                                
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          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
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          Delete "secs. 13, 14, 18, 23, and 24"                                                                                 
          Insert "secs. 16, 17, 21, 26, and 27"                                                                                 
                                                                                                                                
     Page 18, line 28:                                                                                                          
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          Insert "sec. 32"                                                                                                      
                                                                                                                                
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          Insert "sec. 32"                                                                                                      
                                                                                                                                
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          Insert "sec. 24"                                                                                                      
                                                                                                                                
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          Insert "sec. 32"                                                                                                      
                                                                                                                                
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          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 33 and 37"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "Sections 13, 14, 18 - 25, 27, 29, 32, and                                                                     
     33"                                                                                                                        
          Insert "Sections 16, 17, 21 - 28, 30, 32, 35, and                                                                     
     36"                                                                                                                        
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 39 and 40"                                                                                              
                                                                                                                                
Amendment 33, labeled 29-GH2609\P.27, Nauman/Shutts, 3/19/16:                                                                 
                                                                                                                                
     Page 1, line 4, following "credit;":                                                                                     
          Insert "relating to the minimum tax for certain                                                                     
     oil  and gas  production; relating  to the  minimum tax                                                                  
     calculation   for  monthly   installment  payments   of                                                                  
     estimated tax;"                                                                                                          
                                                                                                                                
     Page 5, following line 6:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "*  Sec. 11.  AS 43.55 is  amended by  adding a  new                                                                
     section to read:                                                                                                           
          Sec. 43.55.022. Limitations on tax credits. (a) A                                                                   
     tax  credit  or  a  fraction  of  a  tax  credit  under                                                                    
     AS 43.55.023,  43.55.024,  and  43.55.025  may  not  be                                                                    
     subtracted  in calculating  an  installment payment  of                                                                    
     estimated  tax required  under  AS 43.55.020(a) if  the                                                                    
     resulting amount  of the  installment payment  would be                                                                    
     less  than the  amount in  AS 43.55.020(a)(5)(B)(ii) or                                                                    
     (7)(A)(ii), as applicable.                                                                                                 
          (b)  The total amount of tax credits under                                                                            
     AS 43.55.023,  43.55.024,  and  43.55.025 that  may  be                                                                    
     applied against  a tax levied by  AS 43.55.011(e) for a                                                                    
     calendar year may  not exceed the sum of  the amount of                                                                    
     the tax  credits or fractions  of tax credits  that are                                                                    
     allowed under (a)  of this section to  be subtracted in                                                                    
     calculating the  installment payments of  estimated tax                                                                    
     for each month in the calendar year."                                                                                      
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 6, following line 22:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "* Sec. 14. 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 8, following line 16:                                                                                                 
     Insert new bill sections to read:                                                                                          
        "* Sec. 18. 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].                                                                                                                    
        * Sec. 19. 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  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  the                                                                
     amount calculated under AS 43.55.011(f) [ZERO].                                                                        
        * Sec. 20. AS 43.55.025(i) is amended to read:                                                                        
          (i) For a production tax credit under this                                                                            
     section,                                                                                                                   
               (1) a credit may not be applied to reduce a                                                                      
     taxpayer's  tax liability  under AS 43.55.011(e)  below                                                                    
     the amount calculated  under AS 43.55.011(f) [ZERO] for                                                                
     a calendar year; and                                                                                                       
               (2) an amount of the production tax credit                                                                       
     in  excess of  the amount  that  may be  applied for  a                                                                    
     calendar  year under  this  subsection  may be  carried                                                                    
     forward   and  applied   against  the   taxpayer's  tax                                                                    
     liability under  AS 43.55.011(e) in  one or  more later                                                                    
     calendar years."                                                                                                           
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, line 20, following "APPLICABILITY.":                                                                              
          Delete "Sections 7 - 9, 16, and 17"                                                                                   
          Insert "(a) Sections 7 - 9, 21, and 22"                                                                               
                                                                                                                                
     Page 18, following line 21:                                                                                                
     Insert a new subsection to read:                                                                                           
          "(b)  The limitations on the use of tax credits                                                                       
     added in  AS 43.55.022, added by  sec. 11 of  this Act,                                                                    
     AS 43.55.024(g) and (i), as amended  by secs. 18 and 19                                                                    
     of this  Act, and  AS 43.55.025(i), as amended  by sec.                                                                    
     20 of  this Act, apply  to credits applied to  reduce a                                                                    
     tax liability for  a tax year starting on  or after the                                                                    
     effective date of secs. 11 and 18 - 20 of this Act."                                                                       
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 18, line 27:                                                                                                          
          Delete "secs. 13, 14, 18, 23, and 24"                                                                                 
          Insert "secs. 15, 16, 23, 28, and 29"                                                                                 
                                                                                                                                
     Page 18, line 28:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 18, line 31:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 2:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 5:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 8:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 10:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 14:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 26"                                                                                                      
                                                                                                                                
     Page 19, line 15:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 35 and 39"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "Sections 13, 14, 18 - 25, 27, 29, 32, and                                                                     
     33"                                                                                                                        
          Insert "Sections 15, 16, 23 - 30, 32, 34, 37, and                                                                     
     38"                                                                                                                        
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 41 and 42"                                                                                              
                                                                                                                                
Amendment 35, labeled 29-GH2609\P.7, Shutts, 3/19/16:                                                                         
                                                                                                                                
     Page 5, lines 7 - 26:                                                                                                      
          Delete all material and insert:                                                                                       
        "* Sec. 11. AS 43.55.023(a) 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                                                                                                           
               (A)   20  percent  of  an [THAT]  expenditure                                                            
     incurred before July 1, 2016;                                                                                          
               (B)   10 percent  of an  expenditure incurred                                                                
     on or after July 1, 2016;                                                                                              
               (2)    a  producer  or explorer  may  take  a                                                                    
     credit for a qualified  capital expenditure incurred in                                                                    
     connection with  geological or  geophysical exploration                                                                    
     or in connection  with an exploration well  only if the                                                                    
     producer or explorer                                                                                                       
               (A)   agrees, in  writing, to  the applicable                                                                    
     provisions of AS 43.55.025(f)(2); and                                                                                      
               (B)   submits  to the  Department of  Natural                                                                    
     Resources  all  data  that  would  be  required  to  be                                                                    
     submitted under AS 43.55.025(f)(2);                                                                                        
               (3)    a  credit   for  a  qualified  capital                                                                    
     expenditure  incurred  to   explore  for,  develop,  or                                                                    
     produce  oil  or  gas  deposits  located  north  of  68                                                                    
     degrees  North  latitude  may  be  taken  only  if  the                                                                    
     expenditure is incurred before January 1, 2014.                                                                            
        * Sec.  12. AS 43.55.023(a),  as amended by  sec. 11                                                                  
     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                                                                                                           
               (A)   20 percent  of an  expenditure incurred                                                                  
     before July 1, 2016;                                                                                                       
               (B)   10 percent  of an  expenditure incurred                                                                    
     on or after July 1, 2016;                                                                                                  
               (2)    a  producer  or explorer  may  take  a                                                                    
     credit for a qualified  capital expenditure incurred in                                                                    
     connection with  geological or  geophysical exploration                                                                    
     or in connection  with an exploration well  only if the                                                                    
     producer or explorer                                                                                                       
               (A)   agrees, in  writing, to  the applicable                                                                    
     provisions of AS 43.55.025(f)(2); and                                                                                      
               (B)   submits  to the  Department of  Natural                                                                    
     Resources  all  data  that  would  be  required  to  be                                                                    
     submitted under AS 43.55.025(f)(2);                                                                                        
               (3)    a  credit   for  a  qualified  capital                                                                    
     expenditure  incurred  to   explore  for,  develop,  or                                                                    
     produce  oil  or  gas  deposits  located  north  of  68                                                                    
     degrees  North  latitude  may  be  taken  only  if  the                                                                    
     expenditure is incurred before January 1, 2014."                                                                           
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 8, following line 16:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec.  17. AS 43.55.023(l), as amended  by sec. 16                                                                
     of this Act, 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 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 an expenditure incurred                                                                     
     before January 1, 2017;                                                                                                    
               (B)  30 percent of an expenditure incurred                                                                       
     on  or after  January 1,  2017,  and before  January 1,                                                                    
     2018;                                                                                                                      
               (C)  20 percent of an expenditure incurred                                                                       
     on or after January 1, 2018;                                                                                               
               (2)  a producer or explorer may take a                                                                           
     credit  for a  well lease  expenditure incurred  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                                                                                                       
               (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)."                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 9, line 24:                                                                                                           
          Delete "(l) or under AS 43.55.023(b)"                                                                             
          Insert "under AS 43.55.023(b) or (l)"                                                                             
                                                                                                                                
     Page 10, following line 3:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec.  21. AS 43.55.029(a), as amended  by sec. 20                                                                
     of this Act, is amended to read:                                                                                           
          (a)  An explorer or producer that has applied for                                                                     
     a  production tax  credit under  former AS 43.55.023(a)                                                                    
     or (l) or under  AS 43.55.023(b) or (l) or 43.55.025(a)                                                                
     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)."                                                                           
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 17, line 9:                                                                                                           
          Delete "43.55.023(l), 43.55.023(n)"                                                                                   
                                                                                                                                
     Page 17, following line 10:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 33. AS 43.55.023(l) and 43.55.023(n) are                                                                    
     repealed."                                                                                                                 
                                                                                                                                
     Page 18, line 20:                                                                                                          
          Delete "16, and 17"                                                                                                   
          Insert "18, and 19"                                                                                                   
                                                                                                                                
     Page 18, lines 24 - 25:                                                                                                    
          Delete "AND WELL LEASE EXPENDITURES"                                                                                  
                                                                                                                                
     Page 18, line 25:                                                                                                          
          Delete ", (l), (n),"                                                                                                  
                                                                                                                                
     Page 18, line 26:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
     Page 18, line 27:                                                                                                          
          Delete "secs. 13, 14, 18, 23, and 24"                                                                                 
          Insert "secs. 14, 15, 20, 26, and 27"                                                                                 
                                                                                                                                
     Page 18, line 28:                                                                                                          
          Delete "(1)"                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
     Page 18, line 31:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
     Page 19, line 1:                                                                                                           
          Delete ";"                                                                                                            
          Insert "."                                                                                                            
                                                                                                                                
     Page 19, lines 2 - 6:                                                                                                      
          Delete all material.                                                                                                  
                                                                                                                                
     Page 19, line 8:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
     Page 19, line 10:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
     Page 19, following line 10:                                                                                                
     Insert a new bill section to read:                                                                                         
        "*  Sec. 37.  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.  33   of  this  Act,  and   the  amendment  to                                                                    
     AS 43.55.029(a) by sec. 21 of  this Act, a taxpayer who                                                                    
     incurs a  well lease  expenditure before  the effective                                                                    
     date of sec.  33 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 effective  date of sec. 33  of this                                                                    
     Act.                                                                                                                       
          (b)  The Department of Revenue may continue to                                                                        
     apply and enforce AS 43.55.023  and 43.55.029, as those                                                                    
     sections read on  the day before the  effective date of                                                                    
     sec.   33   of   this  Act,   for   qualified   capital                                                                    
     expenditures  and  well   lease  expenditures  incurred                                                                    
     before the effective date of sec. 33 of this Act."                                                                         
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 19, line 14:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 24"                                                                                                      
                                                                                                                                
     Page 19, line 15:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 32"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 34 and 39"                                                                                           
                                                                                                                                
     Page 20, following line 12:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 42.  Section 11 of this Act takes effect                                                                    
     July 1, 2016."                                                                                                             
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "Sections 13, 14, 18 - 25, 27, 29, 32, and                                                                     
     33"                                                                                                                        
          Insert "Sections 14, 15, 20, 22 - 28, 30, 32, 36,                                                                     
     and 38"                                                                                                                    
                                                                                                                                
     Page 20, lines 13 - 14:                                                                                                    
          Delete "January 1, 2022"                                                                                              
          Insert "July 1, 2017"                                                                                                 
                                                                                                                                
     Page 20, following line 14:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 44. Sections 21, 33, and 37 of this Act                                                                     
     take effect January 1, 2022."                                                                                              
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 41 - 44"                                                                                                
                                                                                                                                
Amendment 38, labeled 29-GH2609\P.44, Nauman/Shutts, 3/21/16:                                                                 
                                                                                                                                
     Page 11, following line 15:                                                                                                
     Insert a new bill section to read:                                                                                         
      "* Sec. 21. AS 43.55.150 is amended by adding a new                                                                   
     subsection to read:                                                                                                        
          (d)  The gross value at the point of production                                                                       
     may not be less than zero."                                                                                                
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 18, line 27:                                                                                                          
          Delete "23, and 24"                                                                                                   
          Insert "24, and 25"                                                                                                   
                                                                                                                                
     Page 18, line 28:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 18, line 31:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 2:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 5:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 8:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 10:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 14:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 22"                                                                                                      
                                                                                                                                
     Page 19, line 15:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 30"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 31 and 35"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "18 - 25, 27, 29, 32, and 33"                                                                                  
         Insert "18 - 20, 22 - 26, 28, 30, 33, and 34"                                                                          
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 37 and 38"                                                                                              
                                                                                                                                
Amendment 40, labeled 29-GH2609\P.26, Nauman/Shutts, 3/19/16:                                                                 
                                                                                                                                
     Page 11, following line 15:                                                                                                
     Insert new bill sections to read:                                                                                          
        "* Sec. 21. 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 or  gas produced after  January 1, 2017,                                                                
     the reduction under this subsection  shall apply to oil                                                                
     or gas produced from a  lease or property for the first                                                                
     four  years after  the  commencement  of production  in                                                                
     commercial quantities of oil or  gas from that lease or                                                                
     property.  For oil  or gas  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.  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. 22. 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  produced after  January 1, 2017,  the                                                                
     reduction under  this subsection shall apply  to oil or                                                                
     gas produced  from a  lease or  property for  the first                                                                
     four  years after  the  commencement  of production  in                                                                
     commercial quantities of oil or  gas from that lease or                                                                
     property.  For oil  or gas  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."                                                                                    
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 18, line 27:                                                                                                          
          Delete "23, and 24"                                                                                                   
          Insert "25, and 26"                                                                                                   
                                                                                                                                
     Page 18, line 28:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 18, line 31:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 2:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 5:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 8:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 10:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 14:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 23"                                                                                                      
                                                                                                                                
     Page 19, line 15:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 32 and 36"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "18 - 25, 27, 29, 32, and 33"                                                                                  
         Insert "18 - 20, 23 - 27, 29, 31, 34, and 35"                                                                          
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 38 and 39"                                                                                              
                                                                                                                                
Amendment 41, labeled 29-GH2609\P.25, Shutts, 3/21/16:                                                                        
                                                                                                                                
     Page 8, lines 5 - 7:                                                                                                       
          Delete ", and before January 1, 2018;                                                                             
               (C)  20 percent of an expenditure incurred                                                                   
     on or after January 1, 2018"                                                                                           
                                                                                                                                
     Page 9, line 22, through page 10, line 3:                                                                                  
          Delete all material and insert:                                                                                       
        "* Sec. 18. AS 43.55.029(a) is amended to read:                                                                     
          (a)  An explorer or producer that has applied for                                                                     
     a  production tax  credit under  former AS 43.55.023(l)                                                                
     or   AS 43.55.023(a)  or   [,]  (b)   [,  OR   (l)]  or                                                            
     43.55.025(a)  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.  19. AS 43.55.029(a),  as amended by  sec. 18                                                                  
     of this Act, is amended to read:                                                                                           
          (a)  An explorer or producer that has applied for                                                                     
     a  production tax  credit under  former AS 43.55.023(a)                                                                
     or    (l)    [AS 43.55.023(l)]    or    AS 43.55.023(b)                                                            
     [AS 43.55.023(a)  OR (b)]  or 43.55.025(a)  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)."                                                                                    
                                                                                                                              
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 17, following line 8:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "* Sec. 30. AS 43.55.023(l) and 43.55.023(n) are                                                                    
     repealed."                                                                                                                 
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 17, line 9:                                                                                                           
          Delete "43.55.023(l), 43.55.023(n),"                                                                                  
                                                                                                                                
     Page 18, lines 24 - 25:                                                                                                    
          Delete "AND WELL LEASE EXPENDITURES"                                                                                  
                                                                                                                                
     Page 18, line 25:                                                                                                          
          Delete ", (l), (n),"                                                                                                  
                                                                                                                                
     Page 18, line 26:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 18, line 27:                                                                                                          
          Delete "18, 23, and 24"                                                                                               
          Insert "19, 24, and 25"                                                                                               
                                                                                                                                
     Page 18, line 28:                                                                                                          
          Delete "(1)"                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 18, line 31:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 1:                                                                                                           
          Delete ";"                                                                                                            
          Insert "."                                                                                                            
                                                                                                                                
     Page 19, lines 2 - 6:                                                                                                      
          Delete all material.                                                                                                  
                                                                                                                                
     Page 19, line 8:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 10:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, following line 10:                                                                                                
          Insert a new bill section to read:                                                                                    
        "*  Sec. 35.  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.  30   of  this  Act,  and   the  amendment  to                                                                    
     AS 43.55.029(a) by sec.  18 of this Act,  a producer or                                                                    
     explorer  who incurs  a well  lease expenditure  before                                                                    
     the  effective  date  of  sec.  30  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 effective date of  sec. 30                                                                    
     of this Act.                                                                                                               
          (b) The Department of Revenue may continue to                                                                         
     apply and enforce AS 43.55.023  and 43.55.029, as those                                                                    
     sections read on  the day before the  effective date of                                                                    
     sec.   30   of   this  Act,   for   qualified   capital                                                                    
     expenditures  and  well   lease  expenditures  incurred                                                                    
     before the effective date of sec. 30 of this Act."                                                                         
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 19, line 14:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 22"                                                                                                      
                                                                                                                                
     Page 19, line 15:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 31"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 32 and 37"                                                                                           
                                                                                                                                
     Page 20, following line 12:                                                                                                
          Insert a new bill section to read:                                                                                    
        "*  Sec. 40.  Sections 18,  30, and  35 of  this Act                                                                
     take effect July 1, 2017."                                                                                                 
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "18 - 25, 27, 29, 32, and 33"                                                                                  
          Insert "19 - 26, 28, 31, 34, and 36"                                                                                  
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 39 - 41"                                                                                                
                                                                                                                                
Amendment 42, labeled 29-GH2609\P.3, Nauman/Shutts, 3/19/16:                                                                  
                                                                                                                                
     Page 1, line 4, following "credit;":                                                                                     
          Insert "relating to a limitation on the                                                                             
     application   of   tax   credits;   relating   to   the                                                                  
     calculation   for  monthly   installment  payments   of                                                                  
     estimated tax;"                                                                                                          
                                                                                                                                
     Page 5, following line 6:                                                                                                  
     Insert a new bill section to read:                                                                                         
        "*  Sec. 11.  AS 43.55 is  amended by  adding a  new                                                                  
     section to read:                                                                                                           
          Sec. 43.55.022. Limitations on tax credits. A tax                                                                   
     credit   or  a   fraction   of  a   tax  credit   under                                                                    
     AS 43.55.023,  43.55.024,  and  43.55.025  may  not  be                                                                    
     subtracted  in calculating  an  installment payment  of                                                                    
     estimated  tax required  under  AS 43.55.020(a) if  the                                                                    
     resulting amount  of the  installment payment  would be                                                                    
     less  than the  amount in  AS 43.55.020(a)(5)(B)(ii) or                                                                    
     43.55.020(a)(7)(A)(ii), as applicable."                                                                                    
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 6, following line 22:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 14. 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 8, following line 16:                                                                                                 
     Insert new bill sections to read:                                                                                          
        "* Sec. 18. 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].                                                                                                                    
        * Sec. 19. 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  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  the                                                                
     amount calculated under AS 43.55.011(f) [ZERO].                                                                        
        * Sec. 20. AS 43.55.025(i) is amended to read:                                                                        
          (i)  For a production tax credit under this                                                                           
     section,                                                                                                                   
               (1)  a credit may not be applied to reduce a                                                                     
     taxpayer's  tax liability  under AS 43.55.011(e)  below                                                                    
     the amount calculated  under AS 43.55.011(f) [ZERO] for                                                                
     a calendar year; and                                                                                                       
               (2)  an amount of the production tax credit                                                                      
     in  excess of  the amount  that  may be  applied for  a                                                                    
     calendar  year under  this  subsection  may be  carried                                                                    
     forward   and  applied   against  the   taxpayer's  tax                                                                    
     liability under  AS 43.55.011(e) in  one or  more later                                                                    
     calendar years."                                                                                                           
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 18, line 20, following "APPLICABILITY.":                                                                              
          Insert "(a)"                                                                                                          
                                                                                                                                
     Page 18, line 20:                                                                                                          
          Delete "16, and 17"                                                                                                   
          Insert "21, and 22"                                                                                                   
                                                                                                                                
     Page 18, following line 21:                                                                                                
     Insert a new subsection to read:                                                                                           
          "(b)  The limitations on the use of tax credits                                                                       
     added in  AS 43.55.022, added by  sec. 11 of  this Act,                                                                    
     AS 43.55.024(g) and (i), as amended  by secs. 18 and 19                                                                    
     of this  Act, and  AS 43.55.025(i), as amended  by sec.                                                                    
     20 of  this Act, apply  to credits applied to  reduce a                                                                    
     tax liability for  a tax year starting on  or after the                                                                    
     effective date of secs. 11 and 18 - 20 of this Act."                                                                       
                                                                                                                                
     Page 18, lines 25 - 26:                                                                                                    
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 18, line 27:                                                                                                          
          Delete "secs. 13, 14, 18, 23, and 24"                                                                                 
          Insert "secs. 15, 16, 23, 28, and 29"                                                                                 
                                                                                                                                
     Page 18, line 28:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 18, line 31:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 2:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 5:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 8:                                                                                                           
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 10:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 14:                                                                                                          
          Delete "sec. 21"                                                                                                      
          Insert "sec. 26"                                                                                                      
                                                                                                                                
     Page 19, line 15:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 19, line 17:                                                                                                          
          Delete "sec. 29"                                                                                                      
          Insert "sec. 34"                                                                                                      
                                                                                                                                
     Page 20, line 12:                                                                                                          
          Delete "Sections 30 and 34"                                                                                           
          Insert "Sections 35 and 39"                                                                                           
                                                                                                                                
     Page 20, line 13:                                                                                                          
          Delete "Sections 13, 14, 18 - 25, 27, 29, 32, and                                                                     
     33"                                                                                                                        
          Insert "Sections 15, 16, 23 - 30, 32, 34, 37, and                                                                     
     38"                                                                                                                        
                                                                                                                                
     Page 20, line 15:                                                                                                          
          Delete "secs. 36 and 37"                                                                                              
          Insert "secs. 41 and 42"                                                                                              
                                                                                                                                
Amendment 43, labeled 29-GH2609\P.46, Nauman, 3/21/16:                                                                        
                                                                                                                                
     Page 1, lines 1 - 7:                                                                                                       
          Delete all material and insert:                                                                                       
     "An  Act 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;  relating  to                                                                  
     disclosure  of  oil  and   gas  production  tax  credit                                                                  
     information; 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 minimum  tax for  certain oil  and gas                                                                  
     production;  relating to  the  minimum tax  calculation                                                                  
     for  monthly  installment  payments of  estimated  tax;                                                                  
     relating  to interest  on monthly  installment payments                                                                  
     of  estimated  tax;  relating to  limitations  for  the                                                                  
     application  of tax  credits; relating  to oil  and gas                                                                  
     production   tax  credits   for   certain  losses   and                                                                  
     expenditures;     relating    to     limitations    for                                                                  
     nontransferable  oil  and  gas production  tax  credits                                                                  
     based on oil production  and the alternative tax credit                                                                  
     for oil  and gas  exploration; relating to  purchase of                                                                  
     tax  credit  certificates  from the  oil  and  gas  tax                                                                  
     credit fund; relating  to a minimum for  gross value at                                                                  
     the   point   of    production;   relating   to   lease                                                                  
     expenditures  and tax  credits for  municipal entities;                                                                  
     adding    a   definition    for   "qualified    capital                                                                  
     expenditure";  adding  a  definition  for  "outstanding                                                                  
     liability  to   the  state";  repealing  oil   and  gas                                                                  
     exploration    incentive    credits;   repealing    the                                                                  
     limitation on  the application  of credits  against tax                                                                  
     liability  for   lease  expenditures   incurred  before                                                                  
     January 1,  2011; repealing  provisions related  to the                                                                  
     monthly installment payments for  estimated tax for oil                                                                  
     and gas produced before  January 1, 2014; repealing the                                                                  
     oil  and  gas  production   tax  credit  for  qualified                                                                  
     capital  expenditures  and certain  well  expenditures;                                                                  
     repealing   the    calculation   for    certain   lease                                                                  
     expenditures applicable before  January 1, 2011; making                                                                  
     conforming amendments;  and providing for  an effective                                                                  
     date."                                                                                                                   
                                                                                                                                
     Page 1, line 9, through page 20, line 16:                                                                                  
          Delete all material and insert:                                                                                       
        "* Section 1. AS 38.05.036(a) is amended to read:                                                                   
          (a)  The department may conduct audits regarding                                                                      
     royalty and  net profits under  oil and  gas contracts,                                                                    
     agreements, or leases under  this chapter and regarding                                                                    
     costs  related  to  exploration licenses  entered  into                                                                    
     under   AS 38.05.131   -  38.05.134   and   exploration                                                                    
     incentive   credits  under   this  chapter   [OR  UNDER                                                                    
     AS 41.09]. For purposes of audit under this section,                                                                       
               (1)  the department may examine the books,                                                                       
     papers,  records, or  memoranda of  a person  regarding                                                                    
     matters related to the audit; and                                                                                          
               (2)  the records and premises where a                                                                            
     business is  conducted shall be open  at all reasonable                                                                    
     times for inspection by the department.                                                                                    
        * Sec. 2. AS 38.05.036(b) is amended to read:                                                                         
          (b)  The Department of Revenue may obtain from                                                                        
     the department information relating  to royalty and net                                                                    
     profits payments  and to exploration  incentive credits                                                                    
     under this chapter [OR UNDER  AS 41.09], whether or not                                                                    
     that  information is  confidential.  The Department  of                                                                    
     Revenue  may use  the information  in carrying  out its                                                                    
     functions and  responsibilities under AS 43,  and shall                                                                    
     hold  that  information   confidential  to  the  extent                                                                    
     required  by an  agreement  with the  department or  by                                                                    
     AS 38.05.035(a)(8)     [,      AS 41.09.010(d),]     or                                                                    
     AS 43.05.230.                                                                                                              
        * Sec. 3. AS 38.05.036(c) is amended to read:                                                                         
          (c)  The department may obtain from the                                                                               
     Department  of Revenue  all information  obtained under                                                                    
     AS 43  relating  to  royalty and  net  profits  and  to                                                                    
     exploration incentive  credits. The department  may use                                                                    
     the  information  for  purposes  of  carrying  out  its                                                                    
     responsibilities and functions  under this chapter [AND                                                                    
     AS 41.09].   Information   made    available   to   the                                                                    
     department   that   was   obtained   under   AS 43   is                                                                    
     confidential   and  subject   to   the  provisions   of                                                                    
     AS 43.05.230.                                                                                                              
        * Sec. 4. AS 38.05.036(f) is amended to read:                                                                         
          (f)  Except as otherwise provided in this section                                                                     
     or  in  connection   with  official  investigations  or                                                                    
     proceedings  of the  department, it  is unlawful  for a                                                                    
     current or  former officer, employee,  or agent  of the                                                                    
     state   to   divulge   information  obtained   by   the                                                                    
     department as a  result of an audit  under this section                                                                    
     that is  required by an  agreement with  the department                                                                    
     or  by AS 38.05.035(a)(8)  [OR  AS 41.09.010(d)] to  be                                                                    
     kept confidential.                                                                                                         
        * Sec. 5. AS 38.05.036(g) is amended to read:                                                                         
          (g)  Nothing in this section prohibits the                                                                            
     publication of  statistics in  a manner  that maintains                                                                    
     the  confidentiality  of   information  to  the  extent                                                                    
     required  by an  agreement  with the  department or  by                                                                    
     AS 38.05.035(a)(8) [OR AS 41.09.010(d)].                                                                                   
        * Sec. 6. AS 40.25.100(a) is amended to read:                                                                         
          (a)  Information in the possession of the                                                                             
     Department  of Revenue  that discloses  the particulars                                                                    
     of  the business  or  affairs of  a  taxpayer or  other                                                                    
     person,        including       information        under                                                                    
     AS 38.05.020(b)(11)    that    is    subject    to    a                                                                    
     confidentiality  agreement  under  AS 38.05.020(b)(12),                                                                    
     is not  a matter of  public record, except  as provided                                                                    
     in AS 43.05.230(i)  - (l)  [AS 43.05.230(i) OR  (k)] or                                                                
     for purposes of investigation  and law enforcement. The                                                                    
     information shall be kept  confidential except when its                                                                    
     production  is required  in an  official investigation,                                                                    
     administrative   adjudication   under  AS 43.05.405   -                                                                    
     43.05.499, or  court proceeding. These  restrictions do                                                                    
     not  prohibit the  publication of  statistics presented                                                                    
     in  a  manner  that   prevents  the  identification  of                                                                    
     particular reports and  items, prohibit the publication                                                                    
     of tax  lists showing  the names  of taxpayers  who are                                                                    
     delinquent and relevant information  that may assist in                                                                    
     the  collection of  delinquent taxes,  or prohibit  the                                                                    
     publication  of  records,  proceedings,  and  decisions                                                                    
     under AS 43.05.405 - 43.05.499.                                                                                            
        * Sec. 7. 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,] bears                                                                        
     interest in each calendar quarter  at the rate of seven                                                                
     [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  compounded quarterly  as  of the  last day  of                                                                
     that 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.  8. AS 43.05.230 is  amended by adding  a new                                                                  
     subsection to read:                                                                                                        
          (l)  The name of each person claiming a credit                                                                        
     under AS 43.55,  the aggregate amount of  credits under                                                                    
     AS 43.55,  except for  the  credit in  AS 43.55.024(j),                                                                    
     claimed by  the taxpayer  in the  calendar year,  and a                                                                    
     description   of   the   taxpayer's   activities   that                                                                    
     generated the credits claimed are public information.                                                                      
        * Sec. 9. AS 43.20.046(e) is amended to read:                                                                         
          (e)  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. 10. AS 43.20.047(e) is amended to read:                                                                        
          (e)  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. [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 43.20.053(e) is amended to read:                                                                        
          (e)  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.  12.   AS 43.55.011(f)   is  repealed   and                                                                  
     reenacted to read:                                                                                                         
          (f)  The levy of tax under (e) of this section                                                                        
     for                                                                                                                        
               (1)  oil and gas produced 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                                                                    
     five  percent  of  the  gross value  at  the  point  of                                                                    
     production; and                                                                                                            
               (2)  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 five  percent of the  gross value at the  point of                                                                    
     production.                                                                                                                
        * Sec. 13. 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 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 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                                                                    
     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)   five [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 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   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)  five [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 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 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."                                                                           
        *   Sec.  14.   AS 43.55.020(g)   is  repealed   and                                                                  
     reenacted to read:                                                                                                         
          (g)  Notwithstanding any contrary provision of                                                                        
     AS 43.05.225,  an  unpaid   amount  of  an  installment                                                                    
     payment  required under  (a)(3),  (5), (6),  or (7)  of                                                                    
     this section that  is not paid when  due bears interest                                                                    
     (1) 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  (2)  as   provided  for  a                                                                    
     delinquent tax under  AS 43.05.225 after that March 31,                                                                    
     interest  accrued under  (1)  of  this subsection  that                                                                    
     remains  unpaid after  that March 31  is treated  as an                                                                    
     addition to tax  that bears interest under  (2) of this                                                                    
     subsection, an  unpaid amount of  tax due  under (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. 15. 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)(3)  [(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 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. 16. 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)(3) -  (5) [(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. 17.  AS 43.55  is amended  by  adding a  new                                                                  
     section to read:                                                                                                           
          Sec. 43.55.022. Limitations on tax credits. (a)                                                                     
     Notwithstanding  any  contrary provision  of  AS 43.55,                                                                    
     the  application  of  tax  credits  under  AS 43.55  is                                                                    
     subject to the limitations set out in this section.                                                                        
          (b)  A tax credit or a fraction of a tax credit                                                                       
     under  AS 43.55.023, 43.55.024,  and 43.55.025  may not                                                                    
     be subtracted in calculating  an installment payment of                                                                    
     estimated  tax required  under  AS 43.55.020(a) if  the                                                                    
     resulting amount  of the  installment payment  would be                                                                    
     less  than the  amount in  AS 43.55.020(a)(5)(B)(ii) or                                                                    
     43.55.020(a)(7)(A)(ii), as applicable.                                                                                     
          (c)  The total amount of tax credits under                                                                            
     AS 43.55.023,  43.55.024,  and  43.55.025 that  may  be                                                                    
     applied against  a tax levied by  AS 43.55.011(e) for a                                                                    
     calendar year may  not exceed the sum of  the amount of                                                                    
     the tax  credits or fractions  of tax credits  that are                                                                    
     allowed under (b)  of this section to  be subtracted in                                                                    
     calculating the  installment payments of  estimated tax                                                                    
     for each month in the calendar year.                                                                                       
        * Sec. 18. 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 on and  after January 1, 2016, to                                                                    
     explore for,  develop, or produce  oil or  gas deposits                                                                    
     located north of 68 degrees  North latitude, a producer                                                                    
     or  explorer may  elect to  take  a tax  credit in  the                                                                    
     amount of 35 percent  of a carried-forward annual loss.                                                                    
     For lease expenditures incurred  on or after January 1,                                                                    
     2014, to  explore for, develop,  or produce oil  or gas                                                                    
     deposits located south of 68  degrees North latitude, a                                                                    
     producer or explorer may elect  to take a tax credit in                                                                    
     the amount  of 25  percent of a  carried-forward annual                                                                    
     loss.  A credit  under this  subsection may  be applied                                                                    
     against a  tax levied by AS 43.55.011(e).  For purposes                                                                    
     of this  subsection, a  carried-forward annual  loss is                                                                    
     the  amount  of  a producer's  or  explorer's  adjusted                                                                    
     lease  expenditures  under AS 43.55.165  and  43.55.170                                                                    
     for a  previous calendar  year that was  not deductible                                                                    
     in calculating production tax  values for that calendar                                                                    
     year under  AS 43.55.160. For the  purpose of  a credit                                                                
     under    this   subsection,    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. 19. 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.  An unused credit or  portion of a                                                                
     credit  may not  be applied  in a  calendar year  later                                                                
     than  the  10th calendar  year  in  which the  carried-                                                                
     forward  annual loss  for which  the credit  is claimed                                                                
     was incurred.                                                                                                          
        * Sec. 20. 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 credit. A certificate  issued under this subsection                                                                    
     expires after 10 years from  the calendar year in which                                                                
     the carried-forward  annual loss  for which  the credit                                                                
     is claimed was incurred [DOES NOT EXPIRE].                                                                             
        * Sec. 21. 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 (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. 22.  AS 43.55.023 is amended by  adding a new                                                                  
     section to read:                                                                                                           
          (q)  A producer or explorer shall comply with the                                                                     
     notice  and   information  provision   requirements  in                                                                    
     AS 43.55.025(f)(2) for the  lease expenditures incurred                                                                    
     towards a credit under this  section. The Department of                                                                    
     Natural   Resources   shall   hold   the   confidential                                                                    
     information   under    AS 43.55.025(f)(2)(C).   For   a                                                                    
     producer  or  explorer  required  to  comply  with  the                                                                    
     notice  and information  requirements of  this section,                                                                    
     the  Department of  Natural Resources  may publish  the                                                                    
     name of the  producer or explorer, the  location of the                                                                    
     well  or seismic  exploration, and  the  date on  which                                                                    
     information  required   to  be  submitted   under  this                                                                    
     section may be released.                                                                                                   
        * Sec. 23. 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].                                                                                                                    
        * Sec. 24. 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  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