SCS CSHB 380(RES): "An Act relating to a temporary reduction of royalty on oil and gas produced for sale from certain fields described as being located within the Cook Inlet sedimentary basin, as having been discovered before January 1, 1988, and as having been undeveloped or shut in from at least January 1, 1988, through December 31, 1997."
00SENATE CS FOR CS FOR HOUSE BILL NO. 380(RES) 01 "An Act relating to a temporary reduction of royalty on oil and gas produced 02 for sale from certain fields described as being located within the Cook Inlet 03 sedimentary basin, as having been discovered before January 1, 1988, and as 04 having been undeveloped or shut in from at least January 1, 1988, through 05 December 31, 1997." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 38.05.180(f) is amended by adding a new paragraph to read: 08 (5) notwithstanding and in lieu of a requirement in the leasing method 09 chosen of a minimum fixed royalty share, or the royalty provision of a lease, for leases 10 unitized as described in (p) of this section, leases subject to an agreement described 11 in (s) or (t) of this section, or interests unitized under AS 31.05, the lessee of all or 12 part of an oil or gas field identified in this section shall, provided production for sale 13 begins before January 1, 2004, pay a royalty of five percent on the first 25,000,000 14 barrels of oil and the first 35,000,000,000 cubic feet of gas produced for sale from that
01 oil or gas field that occurs in the 10 years following the date on which the production 02 for sale commences; a lessee that has not been granted approval of a production plan 03 by the Alaska Royalty Oil and Gas Development Advisory Board under 04 AS 38.06.040(a)(5) before the date production for sale commences from the field 05 described by the plan is ineligible for the royalty reduction described in this paragraph 06 on oil or gas produced from the field; subject to the approval of a plan by the board 07 under AS 38.06.040(a)(5), the fields eligible for royalty reduction under this paragraph, 08 all of which are located within the Cook Inlet sedimentary basin, were discovered 09 before January 1, 1988, and have been undeveloped or shut in from at least January 10 1, 1988, through December 31, 1997, are: 11 (A) Falls Creek; 12 (B) Nicolai Creek; 13 (C) North Fork; 14 (D) Point Starichkof; 15 (E) Redoubt Shoal; and 16 (F) West Foreland. 17 * Sec. 2. AS 38.06.040(a) is amended to read: 18 (a) The board shall 19 (1) in accordance with the criteria set out in AS 38.06.070, develop a 20 plan for the wise development of the state's oil and gas royalty interests; the plan of 21 development shall be consistent with 22 (A) growth of the private sector of the economy; 23 (B) environmental standards required by law; and 24 (C) public fiscal stability; 25 (2) hold public hearings on proposed sales, exchanges, or other 26 disposals of royalty oil or gas to determine whether the proposals comply with 27 AS 38.06.070; 28 (3) examine proposed sales, exchanges , or other disposal of, and 29 recommend to the legislature that it approve or disapprove a proposed sale, exchange , 30 or other disposal of 31 (A) the oil or gas that is obtained by the state as royalty under
01 AS 38.05.182; or 02 (B) the rights to receive future oil or gas production under state 03 leases; [AND] 04 (4) recommend to the commissioner of natural resources the conditions 05 relating to the sale, delivery, transportation, refining , or processing of oil or gas which 06 the commissioner may include in the offer and sale of oil or gas obtained by the state 07 as royalty under AS 38.05.182 ; and 08 (5) grant approval within 45 days after receipt of a production plan 09 for production for sale of oil or gas from a field described in AS 38.05.180(f)(5) 10 if the plan includes provisions for the lessee to use all reasonable efforts to obtain 11 from a manufacturer in this state the reasonably necessary materials for the 12 construction of facilities used to produce oil or gas from that field; in determining 13 whether a lessee has used all reasonable efforts in this paragraph, the board shall 14 consider 15 (A) the relative cost of materials in proportion to the 16 benefits to manufacturers in this state; and 17 (B) the health, safety, and environmental conditions and 18 requirements to ensure maintenance of the lessee's operational standards .