HB 185: "An Act establishing credits for purchasers of state royalty oil for expenditures made by those purchasers on qualifying capital investments to be applied against liquidated purchase arrearages established in contracts, settlements, or final judgments; and providing for an effective date."
00HOUSE BILL NO. 185 01 "An Act establishing credits for purchasers of state royalty oil for expenditures 02 made by those purchasers on qualifying capital investments to be applied against 03 liquidated purchase arrearages established in contracts, settlements, or final 04 judgments; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 38.05.183 is amended by adding a new subsection to read: 07 (i) The provisions of this subsection apply to oil taken by the state as its 08 royalty share that is thereafter sold by the state to a purchaser. The payment due the 09 state by the purchaser for the sale of the royalty oil is subject to the following: 10 (1) notwithstanding (f) of this section and the terms of any contract, 11 judgment, or settlement agreement disposing of a pricing or valuation controversy 12 arising out of additional or delinquent payments alleged by the state to be due on the 13 royalty oil purchase, the purchaser of the state royalty oil may claim as a credit against 14 any liquidated purchase arrearage the gross value of the purchaser's investment in a
01 capital project in the state; the purchaser shall file the claim of the credit with the 02 commissioner of commerce and economic development under procedures the 03 commissioner establishes; subject to the limitations of this subsection, the credit 04 authorized by this subsection shall be allowed 05 (A) if the purchaser's investment in the capital project is made 06 after the effective date of this subsection and the purchaser was not, on the 07 effective date of this subsection, already committed to the investment 08 (i) by a financing arrangement or other form of binding 09 contractual commitment entered into before the effective date of this 10 subsection; or 11 (ii) by law or by a lawful government order; and 12 (B) unless the commissioner finds, by clear and convincing 13 evidence, that the investment for which the credit is claimed will not yield 14 benefits to the economy of the state that are commensurate with the amount of 15 the credit; 16 (2) the credit authorized by this subsection 17 (A) shall first be taken against the outstanding balance of the 18 liquidated purchase arrearage; if the amount of the credit that the purchaser 19 may claim exceeds the outstanding balance of the liquidated purchase 20 arrearage, notwithstanding any other provision of law, the purchaser may take 21 the credit against any other obligation that the purchaser may owe the state; 22 (B) may not exceed the total of all liquidated purchase 23 arrearages outstanding against the purchaser, together with interest, if 24 applicable; 25 (3) a purchaser of state royalty oil who is eligible for a credit 26 authorized by this subsection 27 (A) may, on written request to the commissioner, obtain from 28 the commissioner a determination of the eligibility of a proposed investment 29 in a capital project for the credit authorized by this subsection; the purchaser 30 may obtain the determination if the purchaser applies to the commissioner for 31 the determination before the purchaser commits to the investment by a
01 financing arrangement or other form of binding contractual commitment or 02 commences construction of the capital project; if the commissioner receives a 03 written request under this subparagraph, the commissioner shall provide the 04 purchaser with a determination of the investment's eligibility for a credit not 05 later than 60 days after receipt of the request; 06 (B) may claim the credit only after construction of the capital 07 project that is the basis of the credit is, in the judgment of the commissioner, 08 substantially completed; 09 (C) must claim the credit within the latest of 10 (i) 10 years of the effective date of this subsection; 11 (ii) the 10th anniversary date of the contract, settlement, 12 or final judgment that is the basis of the liquidated purchase arrearage 13 under which the credit is claimed; or 14 (iii) the last day of the period in which all payments are 15 due the state under the contract, settlement, or final judgment that is the 16 basis of the liquidated purchase arrearage under which the credit is 17 claimed; 18 (D) may not claim the credit authorized by this subsection for 19 a capital project until entry of the final judgment or the effective date of the 20 contract or settlement agreement that is the basis of the liquidated purchase 21 arrearage; 22 (4) if a purchaser of state royalty oil claims the credit authorized by 23 this subsection against a liquidated purchase arrearage based on an entry of a final 24 judgment against the purchaser, 25 (A) payment due the state under the final judgment is deferred 26 for the duration of any period set out in (3)(C) of this subsection during which 27 the purchaser may claim the credit, and the state may not execute upon the 28 final judgment during that time; and 29 (B) the balance of the judgment, less any credit allowed by the 30 commissioner under this subsection, plus interest as allowed by AS 09.30.070 31 is due and payable by the purchaser not later than 60 days after the last day on
01 which the purchaser may claim the credit under (3)(C) of this subsection; 02 (5) in this subsection, 03 (A) "commissioner" means the commissioner of commerce and 04 economic development; 05 (B) "liquidated purchase arrearage" means the amount 06 determined to be due the state based on additional or delinquent payments 07 alleged by the state to be due and payable by the purchaser of state royalty oil 08 on a royalty oil purchase agreement as a result of any pricing or valuation 09 controversy if the controversy has been resolved between the state and the 10 purchaser by contract, settlement, or final judgment and the amount due the 11 state has been determined and is set out in the document resolving the 12 controversy. 13 * Sec. 2. This Act takes effect immediately under AS 01.10.070(c).