04/18/1993 01:20 PM Senate FIN

                                                                               
  SENATE BILL NO. 151                                                          
                                                                               
       An Act providing for oil  and gas exploration incentive                 
       credits for certain  activities on certain land  in the                 
       state; and providing for an effective date.                             
                                                                               
  Co-chair  Pearce directed  that  SB 151  be  brought on  for                 
  discussion  and  noted  accompany zero  fiscal  notes  and a                 
  letter from the  Governor.  SENATOR  LOREN LEMAN again  came                 
  before committee.   He explained  that SB 151  was heard  by                 
  Senate Oil and Gas and passed from committee in its original                 
  form.  KEN BOYD, Director, Division of Oil and Gas, Dept. of                 
  Natural  Resources, spoke  in  support  of  the  bill.    He                 
  explained that exploration incentive credits for state lands                 
  presently  exist  in  Title 38.    They  have  been used  to                 
  encourage  exploration.   The  program  allows the  state to                 
  provide  relief  for the  cost of  drilling  wells, up  to a                 
  maximum of 50%.   In the ten  years the program has  been in                 
  place, the state  has forgiven approximately $40  million in                 
  revenue.    The  incentive  credit  can be  applied  against                 
  certain  taxes and  royalty  or  rental  payments.   SB  151                 
  extends  exploration  incentive  credits  to  all  lands  in                 
  Alaska--federal, state, private, etc.                                        
                                                                               
  End, SFC-93, #65, Side 2                                                     
  Begin, SFC-93, #67, Side 1                                                   
                                                                               
                                                                               
  Mr. Boyd noted that well data received by the state would be                 
  held confidential for 25 months from the date of receipt and                 
  then released.   That  is a  departure from  Title 38  which                 
  allows  for  extended  confidentiality.   Seismic  or  other                 
  geophysical data provided  to the state  may be used by  the                 
  state  and  shown by  the  state  (in a  marketing  sense to                 
  promote state lands) but may not be given away.                              
                                                                               
  At the present time, the amount of the exploration incentive                 
  credit is up to 50%.  Under SB 151 it is 50% on  state-owned                 
  land and 25% on  other land.  Exploration on  non-state land                 
  would not be as beneficial to the state.                                     
                                                                               
  Co-chair Pearce  asked if  opposition to  the bill  had been                 
  raised when it was before Senate Oil and Gas.  Senator Leman                 
  responded  negatively but  advised  that  Senator Adams  had                 
  moved  to amend the  bill to apply  up to 50%  credit to all                 
  lands.  That amendment did not pass.                                         
                                                                               
  Co-chair Pearce called for additional testimony on the bill.                 
  None was forthcoming.                                                        
                                                                               
  Senator Sharp  MOVED that  SB 151  pass from  committee with                 
  individual  recommendations  and  accompanying  zero  fiscal                 
  notes.  No objection having been raised, SB 151 was REPORTED                 
  OUT of committee with  zero notes from the Dept.  of Revenue                 
  and  Dept.  of  Natural  Resources.    Co-chair  Pearce  and                 
  Senators  Jacko,  Kelly,  Rieger,   and  Sharp  signed   the                 
  committee report with  a "do pass" recommendation.   Senator                 
  Kerttula  signed  "Do   not  pass."    Co-chair   Frank  was                 
  temporarily absent from the meeting and did not sign.                        
                                                                               
  Co-chair   Pearce  directed  that  the  meeting  be  briefly                 
  recessed.                                                                    
                                                                               
                       RECESS - 3:00 P.M.                                      
                      RECONVENE - 3:20 P.M.