Legislature(2023 - 2024)
2024-05-12 House Journal
Full Journal pdf2024-05-12 House Journal Page 3040 HB 223 The following, which was held from the May 11 calendar (page 2894), was read the second time: HOUSE BILL NO. 223 "An Act relating to the production tax and royalty rates on certain gas; and providing for an effective date." 2024-05-12 House Journal Page 3041 with the: Journal Page RES RPT CS(RES) NEW TITLE 5DP 1DNP 2NR 1758 FN1: INDETERMINATE(DNR) 1758 FN2: INDETERMINATE(REV) 1758 FIN RPT CS(FIN) NEW TITLE 3DP 1DNP 3NR 4AM 2890 FN3: INDETERMINATE(DNR) 2890 FN4: INDETERMINATE(REV) 2890 Representative Saddler moved and asked unanimous consent that the following committee substitute be adopted in lieu of the original bill: CS FOR HOUSE BILL NO. 223(FIN) "An Act relating to royalty rates and payments for certain oil and gas; relating to state loans for oil and gas development projects in the Cook Inlet sedimentary basin; relating to the creation of subsidiaries related to development projects in the Cook Inlet sedimentary basin by the Alaska Industrial Development and Export Authority; relating to the Cook Inlet reserve-based lending fund and the payment of dividends from the fund; relating to a report to the legislature related to oil and gas development projects in the Cook Inlet sedimentary basin; and providing for an effective date." Representative Eastman objected. The question being: "Shall the House adopt CSHB 223(FIN)?" The roll was taken with the following result: HB 223 Second Reading Adopt Finance CS YEAS: 39 NAYS: 1 EXCUSED: 0 ABSENT: 0 Yeas: Allard, Armstrong, Baker, Carpenter, Carrick, Coulombe, Cronk, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, D.Johnson, Josephson, McCabe, McCormick, McKay, Mears, Mina, Ortiz, Prax, Rauscher, Ruffridge, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Sumner, Tilton, Tomaszewski, Vance, Wright 2024-05-12 House Journal Page 3042 Nays: Eastman And so, CSHB 223(FIN) was adopted. Amendment No. 1 was offered by Representative Josephson: Page 2, line 1: Delete "three" Insert "four" Page 2, line 31: Delete "three" Insert "four" Representative Josephson moved and asked unanimous consent that Amendment No. 1 be adopted. Representative Stapp objected. Amendment No. 1 to Amendment No. 1 was offered by Representative Stapp: Page 1, lines 5-7 of the amendment: Delete all material. Representative Stapp moved and asked unanimous consent that Amendment No. 1 to Amendment No. 1 be adopted. Representative Saddler objected. Representative Galvin moved and asked unanimous consent to abstain from voting because of a conflict of interest. Objection was heard, and she was required to vote. The question being: "Shall Amendment No. 1 to Amendment No. 1 be adopted?" The roll was taken with the following result: CSHB 223(FIN) Second Reading Amendment No. 1 to Amendment No. 1 2024-05-12 House Journal Page 3043 YEAS: 26 NAYS: 14 EXCUSED: 0 ABSENT: 0 Yeas: Allard, Armstrong, Baker, Carpenter, Carrick, Cronk, Dibert, Eastman, Edgmon, Fields, Gray, Himschoot, C.Johnson, D.Johnson, McCabe, McCormick, McKay, Prax, Rauscher, Saddler, Shaw, Stapp, Tilton, Tomaszewski, Vance, Wright Nays: Coulombe, Foster, Galvin, Groh, Hannan, Josephson, Mears, Mina, Ortiz, Ruffridge, Schrage, Story, Stutes, Sumner And so, Amendment No. 1 to Amendment No. 1 was adopted. The question being: "Shall Amendment No. 1 as amended be adopted?" The roll was taken with the following result: CSHB 223(FIN) Second Reading Amendment No. 1 as amended YEAS: 17 NAYS: 23 EXCUSED: 0 ABSENT: 0 Yeas: Carrick, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, Josephson, McCormick, Mears, Mina, Ortiz, Schrage, Story, Stutes Nays: Allard, Armstrong, Baker, Carpenter, Coulombe, Cronk, Dibert, Eastman, C.Johnson, D.Johnson, McCabe, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Sumner, Tilton, Tomaszewski, Vance, Wright And so, Amendment No. 1 as amended was not adopted. Amendment No. 2 was offered by Representative Mears: Page 1, line 1, following "gas;" (title amendment): Insert "relating to disclosure of information related to oil and gas production taxes;" Page 5, following line 27: Insert new bill sections to read: "* Sec. 5. AS 43.55.890 is amended to read: Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary provision of AS 40.25.100 or 2024-05-12 House Journal Page 3044 AS 43.05.230, [AND REGARDLESS OF WHETHER THE INFORMATION IS CONSIDERED UNDER AS 43.05.230(E) TO CONSTITUTE STATISTICS CLASSIFIED TO PREVENT THE IDENTIFICATION OF PARTICULAR RETURNS OR REPORTS,] the department shall make publicly available [MAY PUBLISH] the following information under this chapter, [IF AGGREGATED AMONG THREE OR MORE PRODUCERS OR EXPLORERS,] showing by month or calendar year and by lease or property, unit, or area of the state: (1) the amount of oil or gas production; (2) the amount of taxes levied under this chapter or paid under this chapter; (3) the effective tax rates under this chapter; (4) the gross value of oil or gas at the point of production; (5) the transportation costs for oil or gas; (6) qualified capital expenditures, as defined in AS 43.55.023; (7) exploration expenditures under AS 43.55.025; (8) production tax values of oil or gas under AS 43.55.160; (9) lease expenditures under AS 43.55.165; (10) adjustments to lease expenditures under AS 43.55.170; (11) tax credits applicable or potentially applicable against taxes levied by this chapter. * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to read: APPLICABILITY. AS 43.55.890, as amended by sec. 5 of this Act, applies to information collected on or after the effective date of sec. 5 of this Act." Renumber the following bill sections accordingly. Representative Mears moved and asked unanimous consent that Amendment No. 2 be adopted. Representative Rauscher objected. 2024-05-12 House Journal Page 3045 Representative Galvin moved and asked unanimous consent to abstain from voting because of a conflict of interest. Objection was heard, and she was required to vote. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: CSHB 223(FIN) Second Reading Amendment No. 2 YEAS: 19 NAYS: 21 EXCUSED: 0 ABSENT: 0 Yeas: Armstrong, Carrick, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, Josephson, McCormick, Mears, Mina, Ortiz, Schrage, Story, Stutes Nays: Allard, Baker, Carpenter, Coulombe, Cronk, Eastman, C.Johnson, D.Johnson, McCabe, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Sumner, Tilton, Tomaszewski, Vance, Wright And so, Amendment No. 2 was not adopted. HB 223 The following was before the House: CS FOR HOUSE BILL NO. 223(FIN) "An Act relating to royalty rates and payments for certain oil and gas; relating to state loans for oil and gas development projects in the Cook Inlet sedimentary basin; relating to the creation of subsidiaries related to development projects in the Cook Inlet sedimentary basin by the Alaska Industrial Development and Export Authority; relating to the Cook Inlet reserve-based lending 2024-05-12 House Journal Page 3046 fund and the payment of dividends from the fund; relating to a report to the legislature related to oil and gas development projects in the Cook Inlet sedimentary basin; and providing for an effective date." Amendment No. 3 was offered by Representative Mears: Page 1, line 1, following "gas;" (title amendment): Insert "establishing an income tax on certain entities producing or transporting oil or gas in the state;" Page 5, following line 27: Insert new bill sections to read: "* Sec. 5. AS 43.20 is amended by adding a new section to read: Sec. 43.20.019. Tax on income attributable to a qualified entity. (a) If an entity has qualified taxable income over $4,000,000 in a tax year, the entity shall pay a tax of 9.4 percent on the qualified taxable income over $4,000,000. (b) The tax under this section does not apply to a corporation paying tax under AS 43.20.011. (c) The department may aggregate the qualified taxable income of two or more entities for the purpose of determining the tax due under this section if the department determines that, without the provisions of this section, the qualified taxable income would reasonably be expected to be attributed to a single entity. (d) In this section, (1) "entity" means a (A) sole proprietorship; (B) partnership; or (C) entity that has elected to file federal returns under 26 U.S.C. 1361 - 1379 (Internal Revenue Code); (2) "qualified taxable income" means income from the production of oil or gas from a lease or property in the state or from the transportation of oil or gas by pipeline in the state before deductions for (A) dividends and gifts; and (B) wages, salaries, bonuses, or other similar payments to owners, partners, members, or shareholders of the entity. * Sec. 6. The uncodified law of the State of Alaska is amended by 2024-05-12 House Journal Page 3047 adding a new section to read: APPLICABILITY. AS 43.20.019, added by sec. 5 of this Act, applies to the tax year of an entity beginning on or after the effective date of sec. 5 of this Act." Renumber the following bill sections accordingly. Representative Mears moved and asked unanimous consent that Amendment No. 3 be adopted. Representative Saddler objected. Representative Galvin moved and asked unanimous consent to abstain from voting because of a conflict of interest. Objection was heard, and she was required to vote. Amendment No. 1 to Amendment No. 3 was offered by Representative Sumner: Page 2, following line 5 of the amendment: Insert: "Insert a new bill section to read: "* Sec. 6. AS 43.20.046(a) is amended by deleting "the lessor of $15,000,000 or"" Renumber the following bill sections accordingly." Representative Sumner moved and asked unanimous consent that Amendment No. 1 to Amendment No. 3 be adopted. There was objection. Representative Sumner moved and asked unanimous consent to withdraw Amendment No. 1 to Amendment No. 3. There being no objection, it was so ordered. The question being: "Shall Amendment No. 3 be adopted?" The roll was taken with the following result: CSHB 223(FIN) Second Reading Amendment No. 3 2024-05-12 House Journal Page 3048 YEAS: 18 NAYS: 22 EXCUSED: 0 ABSENT: 0 Yeas: Armstrong, Carrick, Dibert, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, Josephson, McCormick, Mears, Mina, Ortiz, Schrage, Story, Stutes Nays: Allard, Baker, Carpenter, Coulombe, Cronk, Eastman, Edgmon, C.Johnson, D.Johnson, McCabe, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Sumner, Tilton, Tomaszewski, Vance, Wright And so, Amendment No. 3 was not adopted. Amendment No. 4 was offered by Representative Sumner: Page 2, line 31: Delete "three" Insert "one" Representative Sumner moved and asked unanimous consent that Amendment No. 4 be adopted. There was objection. Representative Galvin moved and asked unanimous consent to abstain from voting because of a conflict of interest. Objection was heard, and she was required to vote. The question being: "Shall Amendment No. 4 be adopted?" The roll was taken with the following result: CSHB 223(FIN) Second Reading Amendment No. 4 YEAS: 22 NAYS: 18 EXCUSED: 0 ABSENT: 0 Yeas: Allard, Baker, Carpenter, Coulombe, Cronk, Dibert, Eastman, C.Johnson, D.Johnson, McCabe, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Sumner, Tilton, Tomaszewski, Vance, Wright Nays: Armstrong, Carrick, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, Josephson, McCormick, Mears, Mina, Ortiz, Schrage, Story, Stutes And so, Amendment No. 4 was adopted. 2024-05-12 House Journal Page 3049 Amendment No. 5 was not offered. Amendment No. 6 was offered by Representative Fields: Page 1, line 2 (title amendment): Delete "loans" Insert "funding" Page 6, following line 3: Insert a new bill section to read: "* Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to read: COOK INLET ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY INVESTMENT. If a Cook Inlet gas development project would result in increased gas production from the Cook Inlet sedimentary basin, the Alaska Industrial Development and Export Authority shall make a one-time investment of up to $100,000,000 to take an equity share in the Cook Inlet gas development project. In this section, (1) "development project" has the meaning in AS 44.88.900; (2) "gas development project" means a development project to produce proven gas reserves." Renumber the following bill section accordingly. Representative Fields moved and asked unanimous consent that Amendment No. 6 be adopted. Representative Rauscher objected. Representative McCabe moved and asked unanimous consent to set an amendment deadline of 3:45 p.m., today for CSHB 223(FIN) am. There was objection. The question being: "Shall the House set an amendment deadline of 3:45 p.m., today for CSHB 223(FIN) am?" The roll was taken with the following result: 2024-05-12 House Journal Page 3050 CSHB 223(FIN) am Second Reading Amendment deadline 3:45 p.m., today YEAS: 26 NAYS: 13 EXCUSED: 0 ABSENT: 1 Yeas: Allard, Baker, Carpenter, Coulombe, Cronk, Edgmon, Foster, Galvin, C.Johnson, D.Johnson, Josephson, McCabe, McCormick, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Stutes, Sumner, Tilton, Tomaszewski, Vance, Wright Nays: Armstrong, Dibert, Eastman, Fields, Gray, Groh, Hannan, Himschoot, Mears, Mina, Ortiz, Schrage, Story Absent: Carrick And so, the motion passed. The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: CSHB 223(FIN) am Second Reading Amendment No. 6 YEAS: 16 NAYS: 24 EXCUSED: 0 ABSENT: 0 Yeas: Armstrong, Carrick, Dibert, Fields, Galvin, Gray, Groh, Hannan, Himschoot, Josephson, Mears, Mina, Ortiz, Schrage, Story, Stutes Nays: Allard, Baker, Carpenter, Coulombe, Cronk, Eastman, Edgmon, Foster, C.Johnson, D.Johnson, McCabe, McCormick, McKay, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Sumner, Tilton, Tomaszewski, Vance, Wright And so, Amendment No. 6 was not adopted. Amendment No. 7 was offered by Representative Fields: Page 1, line 7, following "basin;" (title amendment): Insert "relating to the acquisition of overriding royalty interests for the Cook Inlet sedimentary basin;" Page 5, following line 27: Insert a new bill section to read: 2024-05-12 House Journal Page 3051 "* Sec. 6. AS 44.88 is amended by adding a new section to article 11 to read: Sec. 44.88.860. Cook Inlet royalty investment. If the authority determines that the acquisition of an overriding royalty interest would result in the production of gas from the Cook Inlet sedimentary basin at the lowest cost to end users, the authority shall acquire, including through the use of eminent domain, private overriding royalty interests in gas produced from the Cook Inlet sedimentary basin. Before beginning a proceeding to acquire an overriding royalty interest through eminent domain, the authority shall determine that acquiring the overriding royalty interest is in the best interest of the state." Renumber the following bill sections accordingly. Representative Fields moved and asked unanimous consent that Amendment No. 7 be adopted. Representative Rauscher objected. The question being: "Shall Amendment No. 7 be adopted?" The roll was taken with the following result: CSHB 223(FIN) am Second Reading Amendment No. 7 YEAS: 14 NAYS: 26 EXCUSED: 0 ABSENT: 0 Yeas: Carrick, Dibert, Fields, Gray, Groh, Hannan, Himschoot, Josephson, Mina, Ortiz, Schrage, Story, Stutes, Sumner Nays: Allard, Armstrong, Baker, Carpenter, Coulombe, Cronk, Eastman, Edgmon, Foster, Galvin, C.Johnson, D.Johnson, McCabe, McCormick, McKay, Mears, Prax, Rauscher, Ruffridge, Saddler, Shaw, Stapp, Tilton, Tomaszewski, Vance, Wright And so, Amendment No. 7 was not adopted. Amendment No. 8 was offered by Representative Eastman: 2024-05-12 House Journal Page 3052 Page 2, line 31, following "the lessee shall": Delete "pay a royalty rate of one percent" Insert "not pay a royalty" Representative Eastman moved and asked unanimous consent that Amendment No. 8 be adopted. Representative Rauscher objected. Representative Galvin moved and asked unanimous consent to abstain from voting because of a conflict of interest. Objection was heard, and she was required to vote. The question being: "Shall Amendment No. 8 be adopted?" The roll was taken with the following result: CSHB 223(FIN) am Second Reading Amendment No. 8 YEAS: 6 NAYS: 33 EXCUSED: 0 ABSENT: 1 Yeas: Coulombe, Cronk, Eastman, Stapp, Sumner, Tomaszewski Nays: Allard, Armstrong, Baker, Carpenter, Carrick, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, Josephson, McCabe, McCormick, McKay, Mears, Mina, Ortiz, Prax, Rauscher, Ruffridge, Saddler, Schrage, Shaw, Story, Stutes, Tilton, Vance, Wright Absent: D.Johnson And so, Amendment No. 8 was not adopted. Amendment No. 9 was offered by Representative Eastman: Page 2, line 31, following "the lessee shall pay a royalty of": Delete "one percent" Insert "$1,000" Representative Eastman moved and asked unanimous consent that Amendment No. 9 be adopted. There was objection. 2024-05-12 House Journal Page 3053 Amendment No. 1 to Amendment No. 9 was offered by Representative Eastman: Page 1: Delete all material and insert: "Delete "royalty of one percent" Insert "one time royalty of $1,000"" Representative Eastman moved and asked unanimous consent that Amendment No. 1 to Amendment No. 9 be adopted. Representative Rauscher objected. The question being: "Shall Amendment No. 1 to Amendment No. 9 be adopted?" The roll was taken with the following result: CSHB 223(FIN) am Second Reading Amendment No. 1 to Amendment No. 9 YEAS: 3 NAYS: 36 EXCUSED: 0 ABSENT: 1 Yeas: Eastman, Sumner, Tomaszewski Nays: Allard, Armstrong, Baker, Carpenter, Carrick, Coulombe, Cronk, Dibert, Edgmon, Fields, Foster, Galvin, Gray, Groh, Hannan, Himschoot, C.Johnson, Josephson, McCabe, McCormick, McKay, Mears, Mina, Ortiz, Prax, Rauscher, Ruffridge, Saddler, Schrage, Shaw, Stapp, Story, Stutes, Tilton, Vance, Wright Absent: D.Johnson And so, Amendment No. 1 to Amendment No. 9 was not adopted. Representative Eastman moved and asked unanimous consent to withdraw Amendment No. 9. There being no objection, it was so ordered. Representative Saddler moved and asked unanimous consent that CSHB 223(FIN) am be considered engrossed, advanced to third reading, and placed on final passage. 2024-05-12 House Journal Page 3054 There was objection. CSHB 223(FIN) am will advance to third reading on tomorrow's calendar.