00                             SENATE BILL NO. 50                                                                          
01 "An Act relating to the assessment of property for the purposes of the oil and gas                                      
02 exploration, production, and pipeline transportation property tax; and providing for an                                 
03 effective date."                                                                                                        
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 43.56.060(c) is amended to read:                                                                   
06 (c)  Except as provided in (h) of this section, the [THE] full and true value of                                    
07 taxable property used or committed by contract or other agreement for use in the                                        
08 exploration for gas or unrefined oil, or in the operation or maintenance of facilities for                              
09 the exploration for gas or unrefined oil, is the estimated price that the property would                                
10       bring in an open market and under the then prevailing market conditions in a sale                                 
11       between a willing seller and a willing buyer both conversant with the property and                                
12       with prevailing general price levels.                                                                             
13    * Sec. 2. AS 43.56.060(d) is amended to read:                                                                      
14            (d)  The full and true value of taxable property used or committed by contract                               
01 or other agreement for the production of gas or unrefined oil or in the operation or                                    
02       maintenance of facilities for the production of gas or unrefined oil is [:]                                       
03 (1)  on the construction commencement date, the actual cost incurred or                                             
04       accrued with respect to the property as of the date of assessment;                                                
05 (2)  determined on each January 1 thereafter on the basis of                                                            
06 replacement cost less depreciation based on the economic life of proven reserves; the                               
07 full and true value under this paragraph may not exceed the estimated price that                                    
08 the property would bring in an open market and under the then prevailing                                            
09 market conditions in a sale between a willing seller and a willing buyer both                                       
10       conversant with the property and with prevailing general price levels.                                      
11    * Sec. 3. AS 43.56.060 is amended by adding new subsections to read:                                               
12 (h)  If property within the Cook Inlet sedimentary basin changes ownership in                                           
13 an arm's length transaction, other than a liquidation bankruptcy under 11 U.S.C. 701 -                                  
14 784, the value of taxable assets for the first year of assessment after the change in                                   
15       ownership is the purchase price paid for the property, adjusted for depreciation.                                 
16            (i)  In this section,                                                                                        
17                 (1)  "Cook Inlet sedimentary basin" has the meaning given in                                            
18       AS 43.55.900;                                                                                                     
19                 (2)  "proven reserves" has the meaning given to "proved oil and gas                                     
20       reserves" in 17 C.F.R. 210.4-10, as that regulation read on January 1, 2022.                                      
21    * Sec. 4. This Act takes effect January 1, 2024.