03/13/2024 01:00 PM House RESOURCES

             HB 387-OIL & GAS TAX CREDIT: JACK-UP RIG                                                                       
                                                                                                                                
1:41:48 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY  announced that the  next order of business  would be                                                               
HOUSE BILL NO. 387, "An Act  relating to a tax credit for certain                                                               
oil and  gas equipment in  the Cook Inlet sedimentary  basin; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
CHAIR MCKAY  noted that  a committee substitute  (CS) for  HB 387                                                               
has been drafted.                                                                                                               
                                                                                                                                
1:42:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  moved to adopt the  committee's proposed                                                               
CS  for HB  387, labeled  33-LS1282\S, Nauman,  3/11/24, [Version                                                               
S], as the working document.                                                                                                    
                                                                                                                                
1:42:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  objected and  then removed  his objection                                                               
to  adopting  Version  S.   There  being  no  further  objection,                                                               
Version S was before the committee.                                                                                             
                                                                                                                                
1:42:54 PM                                                                                                                    
                                                                                                                                
TREVOR  JEPSEN, Staff,  Representative  Tom  McKay, Alaska  State                                                               
Legislature,  Juneau,  Alaska,  reviewed   the  changes  made  in                                                               
Version  S,  the  committee's  proposed   CS  for  HB  387.    He                                                               
paraphrased  from  the  summary   of  changes  [included  in  the                                                               
committee packet],  which read  as follows  [original punctuation                                                               
included with some formatting changes]:                                                                                         
                                                                                                                                
     Section  1:  Extends date  which  jack-up  rig must  be                                                                    
     installed  in Cook  Inlet from  July 1,  2026, to  July                                                                    
     1[,]  2030.  Requires  jack-up  rig  must  be  used  or                                                                    
     contracted to be  used for at least 3  years to qualify                                                                    
     for   the  credit.   Sets  limitation   on  credit   at                                                                    
     $75,000,000.00.                                                                                                            
                                                                                                                                
     Section 2: No changes.                                                                                                     
                                                                                                                                
MR. JEPSEN explained that the  first change of extending the date                                                               
to mid-year  2030 would  allow more  flexibility for  getting the                                                               
rig into the inlet and  would allow for adequately addressing the                                                               
Cook  Inlet  gas shortage.    He  said  the second  change  would                                                               
require  that a  company purchasing  and  bringing a  rig to  the                                                               
inlet wouldn't  receive the  credit unless  the company  used the                                                               
rig  in-state for  three years,  or a  company contracting  a rig                                                               
wouldn't  receive the  credit unless  the company  contracted the                                                               
rig for in-state  use for three years.  He  stated that the third                                                               
change would  set a limitation  on the  credit at $75  million to                                                               
protect the state, rather than there being an open-ended credit.                                                                
                                                                                                                                
1:44:08 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY announced that HB 387 was held over.