SB 290: "An Act providing a credit against the tax on the production of oil and gas for drilling certain exploration wells in the Cook Inlet sedimentary basin."
00 SENATE BILL NO. 290 01 "An Act providing a credit against the tax on the production of oil and gas for drilling 02 certain exploration wells in the Cook Inlet sedimentary basin." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 43.55.025(a) is amended to read: 05 (a) Subject to the terms and conditions of this section, a credit against the 06 production tax levied by AS 43.55.011(e) is allowed for exploration expenditures that 07 qualify under (b) of this section in an amount equal to one of the following: 08 (1) 30 percent of the total exploration expenditures that qualify only 09 under (b) and (c) of this section; 10 (2) 30 percent of the total exploration expenditures that qualify only 11 under (b) and (d) of this section; 12 (3) 40 percent of the total exploration expenditures that qualify under 13 (b), (c), and (d) of this section; [OR] 14 (4) 40 percent of the total exploration expenditures that qualify only
01 under (b) and (e) of this section; or 02 (5) 50, 75, or 100 percent of the total exploration expenditures 03 described in (b)(1) and (2) of this section and not excluded by (b)(3) and (4) of 04 this section that qualify only under (m) of this section. 05 * Sec. 2. AS 43.55.025 is amended by adding a new subsection to read: 06 (m) The first three unaffiliated persons that each bore a hole in the drilling of 07 an exploration well for the purpose of discovering oil or gas in a Cook Inlet prospect 08 in the sub-Cretaceous zone are eligible for the credit under this subsection. The person 09 that drills the first exploration well is entitled to a credit in the amount of 100 percent 10 of its exploration expenditures; the person that drills the second exploration well is 11 entitled to a credit in the amount of 75 percent of its exploration expenditures; and the 12 person that drills the third exploration well is entitled to a credit in the amount of 50 13 percent of its exploration expenditures. A person or an affiliate of a person drilling an 14 exploration well is not entitled to a credit for more than one exploration well. If more 15 than one person qualifies for the credit under this subsection, the commissioner shall 16 make a written determination identifying each person eligible for the credit and the 17 amount of the credit to which that person is entitled. If the exploration well for which 18 a credit is received under this subsection results in production in paying quantities, and 19 notwithstanding that the credit may have been transferred under (g) of this section, 50 20 percent of the amount of the credit received shall be paid in monthly installments to 21 the department by the person that received the credit during the 10-year period after 22 the first production in paying quantities. Whether the target of an exploration well for 23 which a credit is applied under this section is in the sub-Cretaceous zone shall be 24 determined by the commissioner of natural resources and reported to the 25 commissioner.