Legislature(2005 - 2006)
2006-04-24 Senate Journal
Full Journal pdf2006-04-24 Senate Journal Page 2879 SB 305 SENATE BILL NO. 305 "An Act repealing the oil production tax and gas production tax and providing for a production tax on the net value of oil and gas; relating to the relationship of the production tax to other 2006-04-24 Senate Journal Page 2880 taxes; relating to the dates tax payments and surcharges are due under AS 43.55; relating to interest on overpayments under AS 43.55; relating to the treatment of oil and gas production tax in a producer's settlement with the royalty owner; relating to flared gas, and to oil and gas used in the operation of a lease or property, under AS 43.55; relating to the prevailing value of oil or gas under AS 43.55; providing for tax credits against the tax due under AS 43.55 for certain expenditures, losses, and surcharges; relating to statements or other information required to be filed with or furnished to the Department of Revenue, and relating to the penalty for failure to file certain reports, under AS 43.55; relating to the powers of the Department of Revenue, and to the disclosure of certain information required to be furnished to the Department of Revenue, under AS 43.55; relating to criminal penalties for violating conditions governing access to and use of confidential information relating to the oil and gas production tax; relating to the deposit of money collected by the Department of Revenue under AS 43.55; relating to the calculation of the gross value at the point of production of oil or gas; relating to the determination of the net value of taxable oil and gas for purposes of a production tax on the net value of oil and gas; relating to the definitions of 'gas,' 'oil,' and certain other terms for purposes of AS 43.55; making conforming amendments; and providing for an effective date" was read the second time. President Stevens invoked Mason's Manual Sections 101 and 102 for the purpose of debate on the bill. Senator Green, Cochair, moved and asked unanimous consent for the adoption of the Finance Committee Substitute offered on page 2861. Senator Ellis objected. Senator Gary Stevens called the Senate. The call was satisfied. The question being: "Shall the Finance Committee Substitute be adopted?" The roll was taken with the following result: 2006-04-24 Senate Journal Page 2881 SB 305 Second Reading Adopt Finance Committee Substitute? YEAS: 12 NAYS: 8 EXCUSED: 0 ABSENT: 0 Yeas: Bunde, Cowdery, Dyson, Green, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken Nays: Davis, Ellis, Elton, French, Guess, Hoffman, Kookesh, Olson and so, CS FOR SENATE BILL NO. 305(FIN) "An Act repealing the oil production tax and the gas production tax and providing for a production tax on oil and gas; relating to the calculation of the gross value at the point of production of oil and gas and to the determination of the value of oil and gas for purposes of the production tax on oil and gas; providing for tax credits against the production tax on oil and gas; relating to the relationship of the production tax on oil and gas to other taxes, to the dates those tax payments and surcharges are due, to interest on overpayments of the tax, and to the treatment of the tax in a producer's settlement with the royalty owners; relating to flared gas, and to oil and gas used in the operation of a lease or property under the production tax; relating to the prevailing value of oil and gas under the production tax; relating to surcharges on oil; relating to statements or other information required to be filed with or furnished to the Department of Revenue, to the penalty for failure to file certain reports for the tax, to the powers of the Department of Revenue, and to the disclosure of certain information required to be furnished to the Department of Revenue as applicable to the administration of the tax; relating to criminal penalties for violating conditions governing access to and use of confidential information relating to the tax, and to the deposit of tax money collected by the Department of Revenue; amending the definitions of 'gas,' 'oil,' and certain other terms for purposes of the production tax, and as the definition of the term 'gas' applies in the Alaska Stranded Gas Development Act, and adding further definitions; making conforming amendments; and providing for an effective date" was adopted. The following fiscal information was published today: Fiscal Note No. 3, Department of Revenue 2006-04-24 Senate Journal Page 2882 Senator Therriault offered Amendment No. 1 : Page 4, line 31, following "taxation": Insert "or that constitutes a lessor's royalty interest under an oil and gas lease" Senator Therriault moved for the adoption of Amendment No. 1. Senator Stedman objected. The question being: "Shall Amendment No. 1 be adopted?" The roll was taken with the following result: CSSB 305(FIN) Second Reading Amendment No. 1 YEAS: 17 NAYS: 3 EXCUSED: 0 ABSENT: 0 Yeas: Davis, Dyson, Ellis, Elton, French, Green, Guess, Hoffman, Huggins, Kookesh, Olson, Seekins, Stevens B, Stevens G, Therriault, Wagoner, Wilken Nays: Bunde, Cowdery, Stedman and so, Amendment No. 1 was adopted. Senator Therriault offered Amendment No. 2 : Page 11, following line 21: Insert new subsections to read: "(j) As a condition of receiving a tax credit under this section, a producer, explorer, or other taxpayer that obtains the tax credit for or directly related to a pipeline, facility, or other asset that (1) is or becomes subject to regulation by the Federal Energy Regulatory Commission or the Regulatory Commission of Alaska, or a successor regulatory body shall at all times support and in all rate proceedings file to flow through 100 percent of the tax credits to ratepayers as a reduction in the costs of service for the pipeline, facility, or other asset; (2) is not regulated by the Federal Energy Regulatory Commission or the Regulatory Commission of Alaska, or a successor regulatory body, and that charges third parties for use of 2006-04-24 Senate Journal Page 2883 a pipeline, facility, or other asset shall flow through 100 percent of the tax credits as a reduction in the costs of service on which the charges set by the producer, explorer, or other taxpayer for the pipeline, facility, or other asset are based. (k) To ensure compliance with (j) of this section, the department (1) may review the books and records of a producer, explorer, or taxpayer receiving a credit that is subject to the conditions of that subsection; and (2) shall, if the department determines that the producer, explorer, or taxpayer receiving a credit that is subject to the conditions of (j) of this section has not complied with (j)(1) or (2) of this section, disallow the credit for the period in which the producer, explorer, or taxpayer was not in compliance and require repayment of an amount equal to the amount of the credit received." Reletter the following subsection accordingly. Senator Therriault moved for the adoption of Amendment No. 2. Senator Gary Stevens objected. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 2 YEAS: 13 NAYS: 7 EXCUSED: 0 ABSENT: 0 Yeas: Bunde, Davis, Dyson, Ellis, Elton, French, Guess, Kookesh, Olson, Seekins, Therriault, Wagoner, Wilken Nays: Cowdery, Green, Hoffman, Huggins, Stedman, Stevens B, Stevens G and so, Amendment No. 2 was adopted. Senator Therriault offered Amendment No. 3 : 2006-04-24 Senate Journal Page 2884 Page 2, line 22: Delete "secs. 27 and 29" Insert "secs. 26 and 28" Page 18, line 9, through page 19, line 5: Delete all material. Renumber the following bill sections accordingly. Page 30, line 25: Delete "24 - 35" Insert "24 - 34" Page 31, line 16: Delete "sec. 26" Insert "sec. 25" Page 31, line 19: Delete "sec. 26" Insert "sec. 25" Page 31, line 22: Delete "sec. 26" Insert "sec. 25" Page 31, line 24: Delete "sec. 26" Insert "sec. 25" Page 33, line 1: Delete "24 - 35, and 37" Insert "24 - 34, and 36" Page 33, line 20: Delete "24 - 37" Insert "24 - 36" Senator Therriault moved for the adoption of Amendment No. 3. Senator Green objected. 2006-04-24 Senate Journal Page 2885 In accordance with Mason's Manual Section 582, President Ben Stevens relinquished the Chair to President pro tempore Gary Stevens for the purpose of debate. After debate, President pro tempore Gary Stevens returned to the floor. President Ben Stevens returned as presiding officer. The question being: "Shall Amendment No. 3 be adopted?" The roll was taken with the following result: CSSB 305(FIN) am Second Reading Amendment No. 3 YEAS: 12 NAYS: 8 EXCUSED: 0 ABSENT: 0 Yeas: Bunde, Davis, Dyson, Ellis, Elton, French, Guess, Kookesh, Olson, Therriault, Wagoner, Wilken Nays: Cowdery, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G and so, Amendment No. 3 was adopted. Senator Therriault offered Amendment No. 4 : Page 24, line 29, following "section": Insert ", including the incorporation of the concepts of 26 U.S.C. 482 (Internal Revenue Code), as amended, and 26 U.S.C. 6662(e) (Internal Revenue Code), as amended, the related or accompanying regulations of each of those sections, and any ruling or guidance issued by the United States Internal Revenue Service that relates to each of those sections" Senator Therriault moved for the adoption of Amendment No. 4. Objections were heard. The question being: "Shall Amendment No. 4 be adopted?" The roll was taken with the following result: 2006-04-24 Senate Journal Page 2886 CSSB 305(FIN) am Second Reading Amendment No. 4 YEAS: 11 NAYS: 9 EXCUSED: 0 ABSENT: 0 Yeas: Bunde, Dyson, Ellis, Elton, French, Guess, Kookesh, Olson, Therriault, Wagoner, Wilken Nays: Cowdery, Davis, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G and so, Amendment No. 4 was adopted. Senator Guess offered Amendment No. 5 : Page 25, lines 8 - 9: Delete "that ends before April 1, 2016, and" Page 26, line 6, following "month;": Insert "and" Page 26, line 7: Delete "except as provided in (5) of this subsection," Page 26, lines 9 - 11: Delete "; and (5) may not be applied if it would cause the total of the tax credits applied by the producer under this section during 2016 to exceed $3,500,000" Page 27, lines 12 - 13: Delete "credits under AS 43.55.025 and 43.55.170 beyond April 30, 2016" Insert "credit under AS 43.55.025 beyond March 31, 2016" Senator Guess moved for the adoption of Amendment No. 5. Senator Gary Stevens objected. The question being: "Shall Amendment No. 5 be adopted?" The roll was taken with the following result: 2006-04-24 Senate Journal Page 2887 CSSB 305(FIN) am Second Reading Amendment No. 5 YEAS: 7 NAYS: 13 EXCUSED: 0 ABSENT: 0 Yeas: Davis, Ellis, Elton, French, Guess, Kookesh, Olson Nays: Bunde, Cowdery, Dyson, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken and so, Amendment No. 5 failed. Senator French offered Amendment No. 6 : Page 10, line 18: Delete "April 1" Insert "January 1" Page 10, line 25: Delete "April 1" Insert "January 1" Page 10, line 26: Delete "April 1" Insert "January 1" Page 10, line 27: Delete "April 1" Insert "January 1" Page 10, line 28: Delete "April 1" Insert "January 1" Page 10, line 31: Delete "April 1" Insert "January 1" Page 11, line 1: Delete "April 1" Insert "January 1" 2006-04-24 Senate Journal Page 2888 Page 11, line 15: Delete "March 31, 2013" Insert "December 31, 2012" Page 20, line 7: Delete "April 1" Insert "January 1" Page 23, line 28: Delete "April 1" Insert "January 1" Page 25, line 9: Delete "April 1" Insert "January 1" Page 27, line 13: Delete "April 30, 2016" Insert "December 31, 2015" Page 30, line 26: Delete "April 1" Insert "January 1" Page 30, line 31, through page 31, line 28: Delete all material. Insert "TRANSITIONAL PROVISIONS. (a)" Reletter the following subsections accordingly. Page 31, line 30: Delete "April 1" Insert "January 1" Page 32, line 3: Delete "March 31, 2006" Insert "December 31, 2005" Page 32, line 12: Delete "April 1" Insert "January 1" 2006-04-24 Senate Journal Page 2889 Page 32, line 16: Delete "(g)(1)" Insert "(a)(1)" Page 32, line 17: Delete "March 31, 2006" Insert "December 31, 2005" Page 32, line 18: Delete "(g)(2)" Insert "(a)(2)" Page 32, line 20: Delete "(g)(1)" Insert "(a)(1)" Page 32, line 21: Delete "(h)(1)" Insert "(b)(1)" Page 32, lines 22 - 23: Delete "March 31, 2006" Insert "December 31, 2005" Page 33, line 2: Delete "April 1" Insert "January 1" Page 33, line 20: Delete "April 1" Insert "January 1" Senator French moved for the adoption of Amendment No. 6. Objections were heard. The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: 2006-04-24 Senate Journal Page 2890 CSSB 305(FIN) am Second Reading Amendment No. 6 YEAS: 6 NAYS: 14 EXCUSED: 0 ABSENT: 0 Yeas: Ellis, Elton, French, Guess, Kookesh, Olson Nays: Bunde, Cowdery, Davis, Dyson, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken and so, Amendment No. 6 failed. Senator Gary Stevens moved and asked unanimous consent that the bill be considered engrossed, advanced to third reading and placed on final passage. Without objection, it was so ordered. CS FOR SENATE BILL NO. 305(FIN) am was read the third time. Senator French moved and asked unanimous consent to abstain from voting due to a conflict of interest. Objections were heard and Senator French was required to vote. The question being: "Shall CS FOR SENATE BILL NO. 305(FIN) am "An Act repealing the oil production tax and the gas production tax and providing for a production tax on oil and gas; relating to the calculation of the gross value at the point of production of oil and gas and to the determination of the value of oil and gas for purposes of the production tax on oil and gas; providing for tax credits against the production tax on oil and gas; relating to the relationship of the production tax on oil and gas to other taxes, to the dates those tax payments and surcharges are due, to interest on overpayments of the tax, and to the treatment of the tax in a producer's settlement with the royalty owners; relating to flared gas, and to oil and gas used in the operation of a lease or property under the production tax; relating to the prevailing value of oil and gas under the production tax; relating to surcharges on oil; relating to statements or other information required to be filed with or furnished to the Department of Revenue, to the penalty for failure to file certain reports for the tax, to the powers of the Department of Revenue, and to the disclosure of certain information required to be furnished to the Department of Revenue as applicable to the administration of the tax; relating to criminal 2006-04-24 Senate Journal Page 2891 penalties for violating conditions governing access to and use of confidential information relating to the tax, and to the deposit of tax money collected by the Department of Revenue; amending the definitions of 'gas,' 'oil,' and certain other terms for purposes of the production tax, and as the definition of the term 'gas' applies in the Alaska Stranded Gas Development Act, and adding further definitions; making conforming amendments; and providing for an effective date" pass the Senate?" The roll was taken with the following result: CSSB 305(FIN) am Third Reading - Final Passage Effective Date YEAS: 14 NAYS: 6 EXCUSED: 0 ABSENT: 0 Yeas: Bunde, Cowdery, Davis, Dyson, Green, Hoffman, Huggins, Seekins, Stedman, Stevens B, Stevens G, Therriault, Wagoner, Wilken Nays: Ellis, Elton, French, Guess, Kookesh, Olson and so, CS FOR SENATE BILL NO. 305(FIN) am passed the Senate. Senator Gary Stevens moved and asked unanimous consent that the vote on the passage of the bill be considered the vote on the effective date clause. Without objection, it was so ordered. Senator Gary Stevens lifted the call. Senator Ellis gave notice of reconsideration.