HB 280 Summary: Cook Inlet Recovery Act

• Establishes certification process for gas storage facilities through the Alaska Oil and Gas Conservation Commission, requiring facilities to have minimum 500 million cubic feet working capacity and 10 million cubic feet daily withdrawal capability.

• Creates $1.50 per 1,000 cubic feet refundable income tax credit for gas storage facility owners, capped at $15 million or 25 percent of establishment costs, for facilities commencing commercial operation between January 1, 2011 and January 1, 2016.

• Exempts qualifying gas storage facilities from state lease payment fees for 10 years (first year of operation plus nine following years), provided the facility qualifies for the tax credit under AS 43.20.046.

• Defines natural gas storage service as regulated utility under AS 42.05 and excludes storage facilities that are part of pipeline systems from regulatory requirements.

• Gas withdrawn from storage facilities is not considered production subject to oil and gas taxes until all injected non-native gas has been withdrawn, with cushion gas excluded from production calculations.