1993-03-05                     House Journal                      Page 0550
HB 200                                                                       
HOUSE BILL NO. 200 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
"An Act providing for oil and gas exploration incentive credits for           
certain activities on certain land in the state; and providing for an          
effective date."                                                               
                                                                               

1993-03-05                     House Journal                      Page 0551
HB 200                                                                       
was read the first time and referred to the House Special Committee            
on Oil and Gas, Resources and Finance Committees.                              
                                                                               
                                                                               
The following fiscal note applies to HB 200:                                   
                                                                               
Zero fiscal note, Dept. of Revenue, 3/5/93                                     
                                                                               
                                                                               
The Governor's transmittal letter, dated March 5, 1993, appears below:         
                                                                               
"Dear Speaker Barnes:                                                          
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am     
transmitting a bill providing for monetary incentives in the form of           
certain credits to be applied against taxes and other obligations to the       
state for oil- and gas-related geophysical and exploratory activities          
performed by a qualified applicant.  This bill should provide a valuable       
tool for the state to encourage oil and gas exploration in Alaska.             
                                                                               
The bill amends AS41 by adding a new chapter, 09.  The bill would              
permit a qualified applicant to receive certain credits that could be          
used to offset taxes, royalties, or bonuses due the state, if the applicant    
performed certain defined exploratory work.  The bill does not require         
that the exploratory work be done exclusively on state land, since             
development on other land also benefits the state in the form of               
additional jobs, increased economic activity, and development of               
infrastructure.  The bill, though, allows a credit not to exceed 50            
percent of the eligible direct costs of activities performed on state-         
owned land as opposed to 25 percent of those costs on other land, to           
encourage development on state land.  The applicant would be able to           
assign the credit to any other entity, including banks and security            
holders.  The commissioner of natural resources is authorized to grant         
up to a total of $50 million for all incentive credits to applicants under     
this program, with no single project receiving more than $5,000,000 in         
credits.                                                                       
                                                                               
The applicant also must submit to the commissioner copies of all data          
derived from the exploratory activity.                                         
                                                                               

1993-03-05                     House Journal                      Page 0552
HB 200                                                                       
The commissioner may display, but not distribute or transfer, certain          
geophysical data to others to generate interest in development of state        
oil and gas reserves.  The bill provides protection for confidential data      
submitted similar to that already existing in other state laws for oil and     
gas exploration information submitted to the state.                            
                                                                               
I urge your prompt and favorable consideration of this bill.                   
                                                                               
										Sincerely,                                                           
										/s/                                                                  
										Walter J. Hickel                                                     
										Governor"