(JUNEAU) - The Alaska Senate approved House Bill 28 by a vote of 20 to zero on Wednesday. Sponsored by House Special Committee on Oil and Gas Chair Rep. Vic Kohring (R Wasilla/Mat Su) and House Rules Committee Chair Rep. Norman Rokeberg (R-Anchorage), HB 28 provides an oil royalty reduction as an incentive to encourage development of fields that are not profitable. Kohring said the bill is a re-write of major incentive legislation passed in 1995.

"The law was too cumbersome and costly for industry and discouraged the filing of drilling applications," Kohring said. "This bill puts into affect a new system that is more simple and flexible that will spur further development."

HB 28 gives the Commissioner of the Department of Natural Resources broad authority to decide at what level the royalty reduction should be set. The royalty break will fall between 3% and 12.5% depending on the economics of a field.

"This legislation is designed to spark development of unprofitable or marginal fields so that oil doesn't just sit in the ground," Kohring said. "If we can get that oil produced, it creates jobs and contributes to the state treasury to help offset the deficit."

Kohring also expressed gratitude for Rokeberg's active role with HB 28.

"I wish to thank my colleague Representative Rokeberg for initiating this legislation and for all the hard work he put into this effort over the last two years to make it a reality," Kohring said.

House Bill 28 now goes to the Governor for his signature.

# # #

05-22-03: House Special Committee on Oil and Gas Chair Representative Vic Kohring explains why House Bill 28 grants more flexibility to the Department of Natural Resources commissioner to negotiate royalty rates with oil and gas companies.

=

Vic Kohring 64 K

=

Vic Kohring 448 K