CSSB 134(O&G): "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 directing the deposit into the Alaska permanent fund and the general fund of the portion of the liquidated purchase arrearage that must be paid in cash in order to obtain the credit; and providing for an effective date."
00CS FOR SENATE BILL NO. 134(O&G) 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 directing the deposit into the Alaska permanent fund and the 05 general fund of the portion of the liquidated purchase arrearage that must be 06 paid in cash in order to obtain the credit; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 38.05.183 is amended by adding new subsections to read: 09 (i) The provisions of this subsection apply to oil taken by the state as its 10 royalty share that was thereafter sold by the state to a purchaser. The payment due the 11 state by the purchaser for the sale of the royalty oil is subject to the following: 12 (1) notwithstanding (f) of this section and the terms of any contract, 13 judgment, or settlement agreement disposing of a pricing or valuation controversy 14 arising out of additional or delinquent payments alleged by the state to be due on the
01 royalty oil purchase, the purchaser of the state royalty oil may claim as a credit against 02 any liquidated purchase arrearage a portion of the gross value of the purchaser's 03 investment in a capital project in the state; the purchaser shall file the claim of the 04 credit with the commissioner of commerce and economic development under 05 procedures the commissioner establishes; subject to the limitations of this subsection, 06 the credit authorized by this subsection shall be allowed 07 (A) if the purchaser's investment in the capital project is made 08 after the effective date of this subsection and the purchaser was not, on the 09 effective date of this subsection, already committed to the investment 10 (i) by a financing arrangement or other form of binding 11 contractual commitment entered into before the effective date of this 12 subsection; or 13 (ii) by law or by a lawful government order; and 14 (B) if the purchaser demonstrates to the commissioner, by clear 15 and convincing evidence, that the investment for which the credit is claimed 16 will yield benefits to the economy of the state that are greater than the amount 17 of the credit allowed on that investment; 18 (2) the credit authorized by this subsection 19 (A) may not exceed 75 percent of the liquidated purchase 20 arrearage, together with interest, if applicable; and 21 (B) may be approved only if the purchaser makes an investment 22 of twice the amount of the credit claimed; 23 (3) a purchaser of state royalty oil who is eligible for a credit 24 authorized by this subsection 25 (A) may, on written request to the commissioner, obtain from 26 the commissioner a determination of the eligibility of a proposed investment 27 in a capital project for the credit authorized by this subsection; the purchaser 28 may obtain the determination if the purchaser applies to the commissioner for 29 the determination before the purchaser commits to the investment by a 30 financing arrangement or other form of binding contractual commitment or 31 commences construction of the capital project; if the commissioner receives a
01 written request under this subparagraph, the commissioner shall provide the 02 purchaser with a determination of the investment's eligibility for a credit not 03 later than 60 days after receipt of the request; 04 (B) may claim the credit only 05 (i) if, at the time a credit is claimed, and without regard 06 to any payment previously made to the state under this subsection, the 07 purchaser first pays the state an amount equal to one-third of the 08 amount that the purchaser claims as the credit or if, under the contract, 09 judgment, or settlement agreement disposing of the arrearage, the 10 purchaser has committed to the payment of that amount not later than 11 the last day that, under (C) of this paragraph, the purchaser may claim 12 the credit; and 13 (ii) after construction of the capital project that is the 14 basis of the credit is, in the judgment of the commissioner, substantially 15 completed; 16 (C) must claim the credit within seven years of the effective 17 date of this subsection; 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, except for the amount due the state under (3)(B)(i) of 25 this subsection, 26 (A) payment due the state under the final judgment is deferred 27 for the duration of the period set out in (3)(C) of this subsection during which 28 the purchaser may claim the credit, and the state may not execute upon the 29 final judgment during that time; and 30 (B) the balance of the judgment, less any credit allowed by the 31 commissioner under this subsection, plus interest as allowed by AS 09.30.070
01 is due and payable by the purchaser not later than 60 days after the last day on 02 which the purchaser may claim the credit under (3)(C) of this subsection; 03 (5) in this subsection, 04 (A) "commissioner" means the commissioner of commerce and 05 economic development; 06 (B) "liquidated purchase arrearage" means the amount 07 determined to be due the state based on additional or delinquent payments 08 alleged by the state to be due and payable by the purchaser of state royalty oil 09 on a royalty oil purchase agreement entered into after December 31, 1977, and 10 before January 1, 1993, as a result of any pricing or valuation controversy if 11 the controversy has been resolved between the state and the purchaser by 12 contract, settlement, or final judgment and the amount due the state has been 13 determined and is set out in the document resolving the controversy; 14 (C) "purchaser" means a person who acquired royalty oil under 15 a contract of sale in which the state expressly reserved the right to recalculate 16 the price of the oil based on the outcome of any then-pending litigation relating 17 to the determination of the oil's value. 18 (j) In accordance with AS 37.13.010(a)(3), all money received by the state 19 under (i)(3)(B)(i) of this section shall be deposited into the Alaska permanent fund. 20 The provisions of this subsection do not except from the deposit requirements of 21 AS 37.13.010(a) any other amounts received by the state as payment of liquidated 22 purchase arrearages for which a credit is not allowed under AS 38.05.183(i). 23 * Sec. 2. This Act takes effect immediately under AS 01.10.070(c).