Alaska State Legislature
News from the House Majority

Jerry Ritter, House Majority Press Secretary
State Capitol
Juneau, AK 99801
Phone: (907) 465-3804
web site: http://www.akrepublicans.org
Actuality line: 1-800-478-6540

Legislature Approves Bill Encouraging Rapid Development of Reserves

Measure Reduces Royalties on Cook Inlet Oil and Gas

For Immediate Release April 20, 1998 Contact: Rep. Mark Hodgins at (907) 465-2283.

Juneau – The Alaska Legislature Monday gave final approval to House Bill 380. HB 380 is intended to stimulate the development of old oil & gas reserves in and around Cook Inlet.

"The idea behind HB 380 is to encourage the development of several undeveloped oil & gas fields in Cook Inlet," said Representative Mark Hodgins (R-Kenai), the bill’s sponsor. "But once that new infrastructure is in place, hopefully it can be used to leverage additional exploration and development in the area," Hodgins said.

House Bill 380 provides incentive for oil companies to develop old oil and gas fields as rapidly as possible, consistent with safety and environmental standards. The fields that qualify under HB 380 were all discovered more than 30 years ago and have remained undeveloped due to poor economics. The legislation says lessees would pay a reduced royalty rate of 5 percent, for a period of ten years, providing the field is brought into production before January 1, 2004.

The final version of the bill contains strong local hire and local manufacturing provisions.

"If this bill leads to the rapid development of these now-uneconomic oil and gas fields, state and local economies will also benefit through taxation and royalties," Hodgins said. "With the costs of industry infrastructure lowered, future development of new oil and gas discoveries should also prove to be more feasible. And, of course, House Bill 380 will provide good jobs for Alaskans," Hodgins said.

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Broadcasters note: Comments are available by calling the House Majority Actuality Line at (800) 478-6540.
= Mark Hodgins, 33 K