Legislature(1995 - 1996)
1995-04-19 House Journal
Full Journal pdf1995-04-19 House Journal Page 1372 HB 207 Amendment No. 5 was offered by Representative Davies: Page 4, line 23, after "decision": Insert "; however, the commissioner may not implement the determination made under (B) of this paragraph unless the legislature first convenes in regular or special session and, within the first 60 days of a regular session, or within the entirety of a full session if of shorter duration, does not adopt a joint resolution, concurred in by a majority of the members in each house, that disapproves the determination" Representative Davies moved and asked unanimous consent that Amendment No. 5 be adopted. 1995-04-19 House Journal Page 1373 HB 207 Representative Brice objected. The question being: "Shall Amendment No. 5 be adopted?" The roll was taken with the following result: CSHB 207(FIN) am Second Reading Amendment No. 5 YEAS: 5 NAYS: 31 EXCUSED: 3 ABSENT: 1 Yeas: Brown, Davies, Finkelstein, Grussendorf, Nicholia Nays: Austerman, Barnes, Brice, Bunde, G.Davis, Elton, Foster, Green, Hanley, Ivan, James, Kelly, Kohring, Kott, Kubina, Mackie, MacLean, Martin, Masek, Moses, Mulder, Ogan, Phillips, Porter, Robinson, Rokeberg, Sanders, Therriault, Toohey, Vezey, Willis Excused: B.Davis, Navarre, Parnell Absent: Williams And so, Amendment No. 5 was not adopted. Amendment No. 6 was offered by Representative MacLean: Page 4, line 18, following "determination;": Delete through line 21, after "court" Representative MacLean moved and asked unanimous consent that Amendment No. 6 be adopted. Representative Rokeberg objected. The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: 1995-04-19 House Journal Page 1374 HB 207 CSHB 207(FIN) am Second Reading Amendment No. 6 YEAS: 9 NAYS: 26 EXCUSED: 3 ABSENT: 2 Yeas: Brown, Davies, Finkelstein, Grussendorf, Kubina, MacLean, Nicholia, Robinson, Willis Nays: Austerman, Barnes, Bunde, G.Davis, Elton, Foster, Green, Hanley, Ivan, James, Kelly, Kohring, Kott, Mackie, Martin, Masek, Moses, Mulder, Ogan, Phillips, Porter, Rokeberg, Sanders, Therriault, Toohey, Vezey Excused: B.Davis, Navarre, Parnell Absent: Brice, Williams And so, Amendment No. 6 was not adopted. Amendment No. 7 was offered by Representative Finkelstein: Page 3, lines 19 - 26: Delete all material and insert: "(6) may require the lessee or lessees making application for the royalty reduction to pay for the services of a contractor, selected by the commissioner from a list of qualified consultants in hydrocarbon production and economics prepared by the commissioner, to assist the commissioner in evaluating the application and financial and technical data;" Representative Finkelstein moved and asked unanimous consent that Amendment No. 7 be adopted. Representative Green objected. The question being: "Shall Amendment No. 7 be adopted?" The roll was taken with the following result: 1995-04-19 House Journal Page 1375 HB 207 CSHB 207(FIN) am Second Reading Amendment No. 7 YEAS: 10 NAYS: 27 EXCUSED: 3 ABSENT: 0 Yeas: Brown, Davies, Elton, Finkelstein, Grussendorf, Kubina, MacLean, Moses, Nicholia, Robinson Nays: Austerman, Barnes, Brice, Bunde, G.Davis, Foster, Green, Hanley, Ivan, James, Kelly, Kohring, Kott, Mackie, Martin, Masek, Mulder, Ogan, Phillips, Porter, Rokeberg, Sanders, Therriault, Toohey, Vezey, Williams, Willis Excused: B.Davis, Navarre, Parnell And so, Amendment No. 7 was not adopted. Amendment No. 8 was offered by Representative Brown: Page 4, lines 18 - 21: Delete "the commissioner's final findings and determination prepared under this subparagraph regarding royalty reduction is final and not appealable to the court;" Insert "the commissioner's final findings and determination prepared under this subparagraph (i) is, as to the applicant, final and not appealable to the superior court; (ii) may be appealed to the superior court by a person other than the applicant, but the appeal is limited to a determination that the commissioner's final findings and determination is constitutional and was not arbitrary, capricious, or confiscatory;" Representative Brown moved and asked unanimous consent that Amendment No. 8 be adopted. Representative Rokeberg objected. 1995-04-19 House Journal Page 1376 HB 207 The question being: "Shall Amendment No. 8 be adopted?" The roll was taken with the following result: CSHB 207(FIN) am Second Reading Amendment No. 8 YEAS: 10 NAYS: 27 EXCUSED: 3 ABSENT: 0 Yeas: Brown, Davies, Elton, Finkelstein, Grussendorf, Kubina, MacLean, Nicholia, Robinson, Willis Nays: Austerman, Barnes, Brice, Bunde, G.Davis, Foster, Green, Hanley, Ivan, James, Kelly, Kohring, Kott, Mackie, Martin, Masek, Moses, Mulder, Ogan, Phillips, Porter, Rokeberg, Sanders, Therriault, Toohey, Vezey, Williams Excused: B.Davis, Navarre, Parnell And so, Amendment No. 8 was not adopted. Amendment No. 9 was offered by Representative Brown: Page 3, line 16: Delete "and" Page 3, line 18, after "request;": Insert "and (C) shall, with the applicant's consent, prepare and make public a summary of the economic, financial, and technical data on which a royalty modification is based;" Representative Brown moved and asked unanimous consent that Amendment No. 9 be adopted. Representative Green objected. The question being: "Shall Amendment No. 9 be adopted?" The roll was taken with the following result: 1995-04-19 House Journal Page 1377 HB 207 CSHB 207(FIN) am Second Reading Amendment No. 9 YEAS: 6 NAYS: 28 EXCUSED: 3 ABSENT: 3 Yeas: Brown, Davies, Elton, Finkelstein, Nicholia, Robinson Nays: Austerman, Barnes, Brice, Bunde, G.Davis, Foster, Green, Hanley, Ivan, James, Kelly, Kohring, Kott, Kubina, Mackie, MacLean, Martin, Moses, Mulder, Ogan, Phillips, Porter, Rokeberg, Therriault, Toohey, Vezey, Williams, Willis Excused: B.Davis, Navarre, Parnell Absent: Grussendorf, Masek, Sanders And so, Amendment No. 9 was not adopted. Amendment No. 10 was offered by Representative Brown: Page 3, line 8: Delete "90" Insert "75" Representative Brown moved and asked unanimous consent that Amendment No. 10 be adopted. Representative Rokeberg objected. The question being: "Shall Amendment No. 10 be adopted?" The roll was taken with the following result: CSHB 207(FIN) am Second Reading Amendment No. 10 YEAS: 6 NAYS: 27 EXCUSED: 3 ABSENT: 4 1995-04-19 House Journal Page 1378 HB 207 Yeas: Brice, Brown, Davies, Finkelstein, Nicholia, Willis Nays: Austerman, Bunde, G.Davis, Elton, Green, Hanley, Ivan, James, Kelly, Kohring, Kott, Kubina, Mackie, MacLean, Martin, Masek, Moses, Mulder, Ogan, Phillips, Porter, Robinson, Rokeberg, Therriault, Toohey, Vezey, Williams Excused: B.Davis, Navarre, Parnell Absent: Barnes, Foster, Grussendorf, Sanders And so, Amendment No. 10 was not adopted. Amendment No. 11 was offered by Representative Brown: Page 1, line 10, after "may": Insert "with the consent of the Governor" Representative Brown moved and asked unanimous consent that Amendment No. 11 be adopted. Representative Rokeberg objected. Representative Bunde placed a call of the House. The call was satisfied. Amendment to Amendment No. 11 was offered by Representative Brown: After "with the": Insert "written" Representative Brown moved and asked unanimous consent that the amendment to Amendment No. 11 be adopted. There being no objection, it was so ordered. 1995-04-19 House Journal Page 1379 HB 207 The question being: "Shall Amendment No. 11 as amended, be adopted?" The roll was taken with the following result: CSHB 207(FIN) am Second Reading Amendment No. 11 as amended YEAS: 14 NAYS: 23 EXCUSED: 3 ABSENT: 0 Yeas: Brown, Davies, Elton, Finkelstein, Green, Grussendorf, Kubina, Mackie, MacLean, Martin, Moses, Nicholia, Robinson, Willis Nays: Austerman, Barnes, Brice, Bunde, G.Davis, Foster, Hanley, Ivan, James, Kelly, Kohring, Kott, Masek, Mulder, Ogan, Phillips, Porter, Rokeberg, Sanders, Therriault, Toohey, Vezey, Williams Excused: B.Davis, Navarre, Parnell Williams changed from "Yea" to "Nay". And so, Amendment No. 11 as amended, was not adopted. Amendment No. 12 was offered by Representative Kubina: Page 1, line 6, through page 4, line 31: Delete all material and insert: "(j) The commissioner (1) through June30, 1999, (A) may allow reduction of royalty on individual leases, leases unitized as described in (p) of this section, leases subject to an agreement described in (s) or (t) of this section, or interests unitized under AS31.05 (i) to allow for production from an oil or gas field, pool, or portion of a field or pool if the oil or gas field, pool, or portion of the field or pool has been sufficiently delineated to the satisfaction of the commissioner, the field, pool, or portion of the field or pool has not previously produced oil or gas for sale, and oil or gas production from the field, pool, or portion of the field or pool would not otherwise be economically feasible; 1995-04-19 House Journal Page 1380 HB 207 (ii) to prolong the economic life of an oil or gas field, pool, or portion of a field or pool as per barrel or barrel equivalent costs increase or as the price of oil or gas decreases, and the increase or decrease is sufficient to make future production no longer economically feasible; or (iii) to reestablish production of shut-in oil or gas that would not otherwise be economically feasible; (B) may not grant a reduction of royalty unless the lessee or lessees requesting the reduction make a clear and convincing showing that a reduction of royalty meets the requirements of this subsection and is in the best interests of the state; (C) shall condition any royalty modification granted under this subsection in any way necessary to protect the state's best interests; the commissioner shall provide for an increase or decrease or other modification of the state's royalty share by a sliding scale royalty or other mechanism that shall be based on a change in the price of oil or gas and may also be based on other relevant factors such as a change in production rate, projected ultimate recovery, development costs, and operating costs; (D) may not grant a royalty reduction for a field, pool, or portion of a field or pool (i) under (1)(A)(i) of this subsection that exceeds 75 percent of the royalty originally specified in a lease entered into under the provisions of (f) of this section or AS38.05.134; (ii) under (1)(A)(ii) or (1)(A)(iii) of this subsection that exceeds 90 percent of the royalty originally specified in a lease entered into under the provisions of (f) of this section or AS38.05.134; (E) shall require the lessee or lessees to submit, with the application for the royalty reduction, financial and technical data that demonstrates that the requirements of this subsection are met; the commissioner (i) may require disclosure of only the financial and technical data relating to production that is reasonably available to the applicant; and (ii) shall keep the data confidential under AS38.05.035(a)(9) upon the lessee's request; 1995-04-19 House Journal Page 1381 HB 207 (F) may require the lessee or lessees making application for the royalty reduction to retain and pay for the services of a contractor, selected by the lessee or lessees from a list of qualified consultants in hydrocarbon production and economics provided by the commissioner, to assist the commissioner in evaluating the application and financial and technical data; when the commissioner requires the lessee or lessees to retain the services of a contractor, the commissioner shall determine the relevant scope of the work to be performed by the contractor; (G) shall make and publish a preliminary findings and determination on the royalty reduction application, give reasonable public notice of the preliminary findings and determination, and invite public comment to the preliminary findings and determination during a 30-day period for receipt of public comment; (H) shall make copies of the preliminary findings and determination available to the presiding officer of each house of the legislature, to the chairs of the legislature's standing committees on resources, and to the chairs of the legislature's special committees on oil and gas, if any; (I) shall, within 30 days after the close of the public comment period under (G) of this paragraph, (i) prepare a summary of the public response to the commissioner's preliminary findings and determination; (ii) make a final findings and determination; the commissioner's final findings and determination regarding royalty reduction is final and not appealable to the court; and (iii) with the applicant's consent, amend the applicant's lease or unitization agreement consistent with the commissioner's final decision; (J) shall (i) transmit a copy of the final findings and determination to the lessee; and (ii) make copies of the final findings and determination available to a person who submitted comment under (G) of this paragraph and who has filed a request for the copies; 1995-04-19 House Journal Page 1382 HB 207 (K) is not limited by the provisions of AS38.05.134(3) or (f) of this section in the commissioner's determination under this subsection; and (2) after June30, 1999, to [TO] prolong the economic life of an oil and gas field or to reestablish commercial production of shut-in oil or gas that would not otherwise be economically feasible, (A) [THE COMMISSIONER] shall adopt regulations to allow reduction of royalty on leases; (B) [. THE COMMISSIONER] may not grant a reduction of royalty unless the lessee requesting the reduction makes a clear showing that the revenue from the lessee's share of all hydrocarbons produced from the field is and is likely to continue to be insufficient to produce a reasonable rate of return with respect to the lessee's total investment in the field; (C) [. THE COMMISSIONER] may condition a royalty reduction granted under this subsection in any way necessary to protect the state's interest, including restoration of the state's royalty share in the event of an increase in the price of oil or gas; and (D) shall, before [. BEFORE] approving a royalty reduction, [THE COMMISSIONER SHALL] make a written finding that the state has obtained the maximum possible economic return that is compatible with allowing a reasonable rate of economic return for the lessee, and send copies of the finding to all members of the legislature." Representative Kubina moved and asked unanimous consent that Amendment No. 12 be adopted. Representative Rokeberg objected. The question being: "Shall Amendment No. 12 be adopted?" The roll was taken with the following result: CSHB 207(FIN) am Second Reading Amendment No. 12 YEAS: 6 NAYS: 31 EXCUSED: 3 ABSENT: 0 1995-04-19 House Journal Page 1383 HB 207 Yeas: Brown, Davies, Finkelstein, Grussendorf, Kubina, Nicholia Nays: Austerman, Barnes, Brice, Bunde, G.Davis, Elton, Foster, Green, Hanley, Ivan, James, Kelly, Kohring, Kott, Mackie, MacLean, Martin, Masek, Moses, Mulder, Ogan, Phillips, Porter, Robinson, Rokeberg, Sanders, Therriault, Toohey, Vezey, Williams, Willis Excused: B.Davis, Navarre, Parnell And so, Amendment No. 12 was not adopted. Amendment No. 13 was offered by Representative Finkelstein: Page 2, line 20: Delete "and" Insert "," Page 2, line 20, after "state": Insert "and provides the state the maximum long-term economic return" Representative Finkelstein moved and asked unanimous consent that Amendment No. 13 be adopted. Representative Green objected. The question being: "Shall Amendment No. 13 be adopted?" The roll was taken with the following result: CSHB 207(FIN) am Second Reading Amendment No. 13 YEAS: 10 NAYS: 25 EXCUSED: 3 ABSENT: 2 Yeas: Brown, Davies, Elton, Finkelstein, Grussendorf, Kubina, Nicholia, Ogan, Robinson, Willis 1995-04-19 House Journal Page 1384 HB 207 Nays: Austerman, Barnes, Bunde, G.Davis, Foster, Green, Hanley, Ivan, James, Kelly, Kohring, Kott, Mackie, MacLean, Martin, Moses, Mulder, Phillips, Porter, Rokeberg, Sanders, Therriault, Toohey, Vezey, Williams Excused: B.Davis, Navarre, Parnell Absent: Brice, Masek And so, Amendment No. 13 was not adopted. Amendment No. 14 was offered by Representative Finkelstein: Page 1, line 2, after "gas" (title amendment): Insert ", and to depositing royalties and royalty sale proceeds in the Alaska permanent fund" Page 1, following line 4: Insert a new bill section to read: "* Section 1. AS37.13.010(a) is amended to read: (a) Under art. IX, sec. 15 of the state constitution, there is established as a separate fund the Alaska permanent fund. The Alaska permanent fund consists of (1) 25 percent of (A) all mineral lease rentals, royalties, royalty sale proceeds, net profit shares under AS38.05.180(f) and (g), and federal mineral revenue sharing payments received by the state from mineral leases issued on or before December1, 1979, except that, regarding royalties and royalty sale proceeds, for leases for which the royalty is reduced or modified under AS38.05.180(j), the permanent fund shall receive the greater of (i) the royalties and royalty sale proceeds that the fund would have received if a reduction under AS38.05.180(j) had not been granted; or (ii) 25 percent of the royalties and royalty sale proceeds received by the state under a modified royalty under AS38.05.180(j); and (B) [25 PERCENT OF] all bonuses received by the state from mineral leases issued on or before February15, 1980; 1995-04-19 House Journal Page 1385 HB 207 (2) 50 percent of (A) all mineral lease rentals, royalties, royalty sale proceeds, net profit shares under AS38.05.180(f) and (g), and federal mineral revenue sharing payments received by the state from mineral leases issued after December1, 1979, except that, regarding royalties and royalty sale proceeds, for leases for which the royalty is reduced or modified under AS38.05.180(j), the permanent fund shall receive the greater of (i) the royalties and royalty sale proceeds that the fund would have received if a reduction under AS38.05.180(j) had not been granted; or (ii) 50 percent of the royalties and royalty sale proceeds received by the state under a modified royalty under AS38.05.180(j); and (B) [50 PERCENT OF] all bonuses received by the state from mineral leases issued after February15, 1980; (3) any other money appropriated to or otherwise allocated by law to the Alaska permanent fund." Page 1, line 5: Delete "Section 1." Insert "Sec. 2." Renumber the following bill sections accordingly. Page 3, lines 3 - 10: Delete all material and insert: "(4) may not grant a royalty reduction for a field, pool, or portion of a field or pool under this subsection that exceeds 75 percent of the royalty originally specified in a lease entered into under the provisions of (f) of this section on or before December1, 1979, or 50 percent of the royalty originally specified in a lease issued after December1, 1979, under the provisions of (f) of this section or AS38.05.134;" Representative Finkelstein moved and asked unanimous consent that Amendment No. 14 be adopted. Representative Rokeberg objected. 1995-04-19 House Journal Page 1386 HB 207 The question being: "Shall Amendment No. 14 be adopted?" The roll was taken with the following result: CSHB 207(FIN) am Second Reading Amendment No. 14 YEAS: 10 NAYS: 26 EXCUSED: 3 ABSENT: 1 Yeas: Brice, Brown, Finkelstein, Grussendorf, Kohring, Kubina, MacLean, Nicholia, Ogan, Robinson Nays: Austerman, Barnes, Bunde, Davies, G.Davis, Elton, Foster, Green, Hanley, Ivan, James, Kelly, Kott, Mackie, Martin, Masek, Moses, Phillips, Porter, Rokeberg, Sanders, Therriault, Toohey, Vezey, Williams, Willis Excused: B.Davis, Navarre, Parnell Absent: Mulder And so, Amendment No. 14 was not adopted. Representative Vezey moved and asked unanimous consent that CSHB207(FIN)am be considered engrossed, advanced to third reading and placed on final passage. There being no objection, it was so ordered. CSHB207(FIN)am was read the third time. The question being: "Shall CSHB207(FIN)am pass the House?" The roll was taken with the following result: CSHB 207(FIN) am Third Reading Final Passage YEAS: 35 NAYS: 2 EXCUSED: 3 ABSENT: 0 1995-04-19 House Journal Page 1387 HB 207 Yeas: Austerman, Barnes, Brice, Bunde, Davies, G.Davis, Elton, Foster, Green, Grussendorf, Hanley, Ivan, James, Kelly, Kohring, Kott, Kubina, Mackie, MacLean, Martin, Masek, Moses, Mulder, Nicholia, Ogan, Phillips, Porter, Robinson, Rokeberg, Sanders, Therriault, Toohey, Vezey, Williams, Willis Nays: Brown, Finkelstein Excused: B.Davis, Navarre, Parnell And so, CSHB207(FIN)am passed the House. Representative Vezey moved and asked unanimous consent that the roll call on the passage of the bill be considered the roll call on the effective date clause. There being no objection, it was so ordered. Representative Brown gave notice of reconsideration of her vote on CSHB207(FIN)am.