05/15/2003 08:45 AM Senate FIN

                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 61(RES)                                                                                
     "An Act establishing  an exploration and development  incentive                                                            
     tax credit  for operators and working interest  owners directly                                                            
     engaged in the exploration  for and development of gas for sale                                                            
     and  delivery  without  reference  to volume  from  a lease  or                                                            
     property  in the state; and providing  for an effective  date."                                                            
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee. At adjournment  of the previous hearing a motion to adopt                                                            
Amendment #1 was on the table.                                                                                                  
                                                                                                                                
Co-Chair Wilken  reminded that this bill "allows a  tax credit equal                                                            
to ten-percent  of qualified  capital investment  as well as  labor,                                                            
seismic  and  associated  costs  related   to  gas  exploration  and                                                            
development."                                                                                                                   
                                                                                                                                
Amendment  #1:  This  amendment  inserts,   "east  of  meridian  156                                                            
degrees"  into  Section  1,  Sec.  43.20.043.  Gas  exploration  and                                                            
development  tax credit. The  amended language  on page 3,  lines 10                                                            
through 14 reads as follows.                                                                                                    
                                                                                                                                
          (f) A taxpayer is not entitled to a credit under this                                                                 
     section  for expenditures  that  are made or  incurred for  the                                                            
     qualified  capital investment  or for  qualified services  made                                                            
     for exploration  and development of gas that  occur in the area                                                            
     of Alaska lying north  of 68 degrees North latitude and east of                                                            
     meridian 156 degrees  or that are made or incurred to transport                                                            
     gas from reserves  located in the area of Alaska lying north of                                                            
     68 degrees North latitude and east of meridian 156 degrees.                                                                
                                                                                                                                
Senator Olson  WITHDREW his  motion to adopt  the amendment  without                                                            
objection.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  MIKE CHENAULT,  sponsor of  the bill, clarified  for                                                            
Senator  Taylor's  benefit  that  the  Senate  Resources   committee                                                            
substitute is the preferred version.                                                                                            
                                                                                                                                
Senator  Olson  commented  that  he withdrew  his  motion  to  adopt                                                            
Amendment #1 because  the portion of his district  that was excluded                                                            
in  this legislation  was  addressed  in SB  185. He  requested  the                                                            
Committee  extend  consideration  to Western  Alaska  when  debating                                                            
future similar legislation.                                                                                                     
                                                                                                                                
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
Without  objection SCS  CS HB  61 (RES)  MOVED from  Committee  with                                                            
accompanying  zero fiscal notes: #1  from the Department  of Natural                                                            
Resources and #2 from the Department of Revenue.