00 CS FOR HOUSE BILL NO. 280(L&C) 01 "An Act relating to a gas storage facility; relating to the Regulatory Commission of 02 Alaska; relating to the participation by the attorney general in a matter involving the 03 approval of a rate or a gas supply contract; relating to an income tax credit for a gas 04 storage facility; relating to oil and gas production tax credits; relating to the powers and 05 duties of the Alaska Oil and Gas Conservation Commission; relating to production tax 06 credits for certain losses and expenditures, including exploration expenditures; relating 07 to the powers and duties of the director of the division of lands and to lease fees for a gas 08 storage facility on state land; and providing for an effective date." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10  * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 11 to read: 12 SHORT TITLE. This Act may be known as the Cook Inlet Recovery Act. 01  * Sec. 2. AS 31.05 is amended by adding a new section to read: 02 Sec. 31.05.032. Certification of gas storage capacity. (a) An owner of a gas 03 storage facility that seeks an exemption under AS 38.05.180(u) or a credit under 04 AS 43.20.046 shall apply to the commission for certification of the facility's working 05 gas storage capacity and certification of the facility's gas withdrawal capability. The 06 application shall be on a form prescribed by the commission. 07 (b) Within six months after receiving an application under (a) of this section, 08 the commission shall determine and certify 09 (1) the working gas storage capacity of the facility on the date the 10 facility commences commercial operation rounded to the nearest 1,000,000,000 cubic 11 feet; and 12 (2) whether the gas storage facility is capable of withdrawing a 13 minimum of 10,000,000 cubic feet of gas a day. 14 (c) The commission shall provide a copy of the certifications required by (b) 15 of this section to the owner of the gas storage facility that requested the certification, 16 the commissioner of natural resources, and the commissioner of revenue. 17 (d) If a gas storage facility ceases commercial operation, an owner of the gas 18 storage facility shall give written notice to the commission that commercial operation 19 has ceased. The notice must be filed with the commission before April 1 of the year 20 immediately following the year in which the gas storage facility ceases commercial 21 operation. 22 (e) In this section, 23 (1) "ceases commercial operation" means that the gas storage facility 24 fails to inject or withdraw more than 10,000,000 cubic feet of gas during a calendar 25 year following the year in which a gas storage facility commences commercial 26 operation; 27 (2) "commences commercial operation" means the first injection of 28 non-native gas into a gas storage facility for purposes other than testing; 29 (3) "cushion gas" means native and non-native gas in a gas storage 30 facility that is needed to pressurize the facility and that allows the facility to function; 31 (4) "gas storage facility" means a tank, depleted or nearly depleted 01 reservoir or pool, or other structure in the state that is available for the storage of gas; 02 (5) "native gas" means gas in a gas storage facility that was not 03 injected; 04 (6) "non-native gas" means gas that is produced elsewhere and injected 05 into a gas storage facility; 06 (7) "pool" has the meaning given in AS 31.05.170; 07 (8) "working gas storage capacity" means the maximum volume of 08 non-native gas a gas storage facility may safely contain without creating or causing 09 waste; the maximum volume of non-native gas does not include the volume of cushion 10 gas present or the volume required for proper functioning of the gas storage facility. 11  * Sec. 3. AS 38.05.035(a) is amended to read: 12 (a) The director shall 13 (1) have general charge and supervision of the division and may 14 exercise the powers specifically delegated to the director; the director may employ and 15 fix the compensation of assistants and employees necessary for the operations of the 16 division; the director is the certifying officer of the division, with the consent of the 17 commissioner, and may approve vouchers for disbursements of money appropriated to 18 the division; 19 (2) manage, inspect, and control state land and improvements on it 20 belonging to the state and under the jurisdiction of the division; 21 (3) execute laws, rules, regulations, and orders adopted by the 22 commissioner; 23 (4) prescribe application procedures and practices for the sale, lease, or 24 other disposition of available land, resources, property, or interest in them; 25 (5) prescribe fees or service charges, with the consent of the 26 commissioner, for any public service rendered; 27 (6) under the conditions and limitations imposed by law and the 28 commissioner, issue deeds, leases, or other conveyances disposing of available land, 29 resources, property, or any interests in them; 30 (7) have jurisdiction over state land, except that land acquired by the 31 Alaska World War II Veterans Board and the Agricultural Loan Board or the 01 departments or agencies succeeding to their respective functions through foreclosure 02 or default; to this end, the director possesses the powers and, with the approval of the 03 commissioner, shall perform the duties necessary to protect the state's rights and 04 interest in state land, including the taking of all necessary action to protect and enforce 05 the state's contractual or other property rights; 06 (8) maintain the records the commissioner considers necessary, 07 administer oaths, and do all things incidental to the authority imposed; the following 08 records and files shall be kept confidential upon request of the person supplying the 09 information: 10 (A) the name of the person nominating or applying for the sale, 11 lease, or other disposal of land by competitive bidding; 12 (B) before the announced time of opening, the names of the 13 bidders and the amounts of the bids; 14 (C) all geological, geophysical, and engineering data supplied, 15 whether or not concerned with the extraction or development of natural 16 resources; 17 (D) except as provided in AS 38.05.036, cost data and financial 18 information submitted in support of applications, bonds, leases, and similar 19 items; 20 (E) applications for rights-of-way or easements; 21 (F) requests for information or applications by public agencies 22 for land that is being considered for use for a public purpose; 23 (9) account for the fees, licenses, taxes, or other money received in the 24 administration of this chapter including the sale or leasing of land, identify their 25 source, and promptly transmit them to the proper fiscal department after crediting 26 them to the proper fund; receipts from land application filing fees and charges for 27 copies of maps and records shall be deposited immediately in the general fund of the 28 state by the director; 29 (10) select and employ or obtain at reasonable compensation cadastral, 30 appraisal, or other professional personnel the director considers necessary for the 31 proper operation of the division; 01 (11) be the certifying agent of the state to select, accept, and secure by 02 whatever action is necessary in the name of the state, by deed, sale, gift, devise, 03 judgment, operation of law, or other means any land, of whatever nature or interest, 04 available to the state; and be the certifying agent of the state, to select, accept, or 05 secure by whatever action is necessary in the name of the state any land, or title or 06 interest to land available, granted, or subject to being transferred to the state for any 07 purpose; 08 (12) on request, furnish records, files, and other information related to 09 the administration of AS 38.05.180 to the Department of Revenue for use in 10 forecasting state revenue under or administering AS 43.55, whether or not those 11 records, files, and other information are required to be kept confidential under (8) of 12 this subsection; in the case of records, files, or other information required to be kept 13 confidential under (8) of this subsection, the Department of Revenue shall maintain 14 the confidentiality that the Department of Natural Resources is required to extend to 15 records, files, and other information under (8) of this subsection;  16 (13) when reasonably possible, give priority to and expedite the  17 processing of an application for a lease or assignment of a lease of state land for  18 development and operation of a gas storage facility, for a right-of-way to a gas  19 storage facility, for a change to the allocation of production within a unit, and for  20 a permit necessary for the operation of a gas storage facility; in this paragraph,  21 "gas storage facility" has the meaning given in AS 31.05.032. 22  * Sec. 4. AS 38.05.180(u) is amended to read: 23 (u) To avoid waste or to promote conservation of natural resources, the 24 commissioner may authorize the subsurface storage of oil or gas, whether or not 25 produced from state land, in land leased or subject to lease under this section. This 26 authorization may provide for the payment of a storage fee or rental on the stored oil 27 or gas, or, instead of the fee or rental, for a royalty other than that prescribed in the 28 lease when the stored oil or gas is produced in conjunction with oil or gas not 29 previously produced. A lease on which storage is so authorized shall be extended at 30 least for the period of storage and so long thereafter as oil or gas not previously 31 produced is produced in paying quantities. Notwithstanding the authorization for  01 payments under this subsection, when requested by a lessee, the commissioner  02 shall exempt a gas storage facility that qualifies for a tax credit under  03 AS 43.20.046 from any payment described in this subsection for the periods  04 described in this subsection. The exemption is available for the calendar year in  05 which the facility commences commercial operation and for each of the nine  06 calendar years immediately following the first year of commercial operation;  07 however, an exemption is not applicable for the calendar year after the facility  08 ceases commercial operation or for any subsequent calendar year. The lessee  09 shall provide the commissioner with any information the commissioner requests  10 to determine if the exemption applies. The information related to state land  11 leased for a gas storage facility under this subsection is public information and  12 may be furnished to the Regulatory Commission of Alaska. On request, the  13 commissioner shall provide the name of each person using state land leased for a  14 gas storage facility under this chapter, the years for which an exemption was  15 granted, and the amount of the exemption. Gas withdrawn from a gas storage  16 facility is considered to be non-native gas and is not considered to be produced  17 and subject to royalty until all non-native gas injected into the gas storage facility  18 has been withdrawn from the gas storage facility. A person receiving an  19 exemption for a payment under this section that contracts to store gas for a  20 utility regulated under AS 42.05 shall reduce the storage price to reflect the value  21 of the exemption. In this subsection, "ceases commercial operation,"  22 "commences commercial operation," "gas storage facility," and "non-native  23 gas" have the meanings given in AS 31.05.032.  24  * Sec. 5. AS 42.05.141 is amended by adding a new subsection to read: 25 (d) When considering whether the approval of a rate or a gas supply contract 26 proposed by a utility to provide a reliable supply of gas for a reasonable price is in the 27 public interest, the commission shall 28 (1) recognize the public benefits of allowing a utility to negotiate 29 different pricing mechanisms with different gas suppliers and to maintain a diversified 30 portfolio of gas supply contracts to protect customers from the risks of inadequate 31 supply or excessive cost that may arise from a single pricing mechanism; and 01 (2) consider whether a utility could meet its responsibility to the public 02 in a timely manner and without undue risk to the public if the commission fails to 03 approve a rate or a gas supply contract proposed by the utility. 04  * Sec. 6. AS 42.05.381 is amended by adding a new subsection to read: 05 (k) In determining the just and reasonable rates of a gas utility, the 06 commission shall allow the reasonable and necessary costs of storing the utility's gas. 07 The cost to the utility of storing gas in a gas storage facility that is allowed shall reflect 08 the reduction in cost attributable to any exemption from a payment due under 09 AS 38.05.180(u) and the value of a tax credit that the owner of the gas storage facility 10 received under AS 43.20.046. The commission may request the (1) commissioner of 11 natural resources to report the value of the exemption from a payment due under 12 AS 38.05.180(u) that the gas storage facility received; and (2) commissioner of 13 revenue to report information on the amount of tax credits taken under AS 43.20.046 14 for the gas storage facility. In this subsection, "gas storage facility" has the meaning 15 given in AS 31.05.032. 16  * Sec. 7. AS 42.05.990(4) is amended to read: 17 (4) "public utility" or "utility" includes every corporation whether 18 public, cooperative, or otherwise, company, individual, or association of individuals, 19 their lessees, trustees, or receivers appointed by a court, that owns, operates, manages, 20 or controls any plant, pipeline, or system for 21 (A) furnishing, by generation, transmission, or distribution, 22 electrical service to the public for compensation; 23 (B) furnishing telecommunications service to the public for 24 compensation; 25 (C) furnishing water, steam, or sewer service to the public for 26 compensation; 27 (D) furnishing by transmission or distribution of natural or 28 manufactured gas to the public for compensation; 29 (E) furnishing for distribution or by distribution petroleum or 30 petroleum products to the public for compensation when the consumer has no 31 alternative in the choice of supplier of a comparable product and service at an 01 equal or lesser price; 02 (F) furnishing collection and disposal service of garbage, 03 refuse, trash, or other waste material to the public for compensation; 04 (G) furnishing injection, storage, and withdrawal services  05 for natural gas that is owned by a utility regulated under this chapter; 06  * Sec. 8. AS 43.05.230 is amended by adding a new subsection to read: 07 (j) Information described in this subsection that relates to the tax credit in 08 AS 43.20.046 is public information and the commissioner shall furnish the 09 information to the Regulatory Commission of Alaska on request. The commissioner 10 shall disclose 11 (1) the name of each person claiming a credit and the amount of credit 12 issued to that person under AS 43.20.046; 13 (2) the amount of credit shown on a transferable tax credit certificate 14 issued under AS 43.20.046 and the name of the person to whom the tax credit 15 certificate is transferred; and 16 (3) the name of each person selling an unused credit to the department 17 under AS 43.20.046 and the amount paid to that person by the department. 18  * Sec. 9. AS 43.20 is amended by adding a new section to article 1 to read: 19 Sec. 43.20.046. Gas storage facility tax credit. (a) A person that is an owner 20 of a gas storage facility described in (b) of this section that commences commercial 21 operation after December 31, 2010, and before January 1, 2016, may apply for a credit 22 against a tax liability that may be imposed on the person under this chapter for the tax 23 year in which the gas storage facility commences commercial operation or the tax year 24 immediately following. The tax credit under this section shall be an amount equal to 25 $1.50 for each 1,000 cubic feet of working gas storage capacity that is certified under 26 AS 31.05.032 less any amount of credit received under this section taken in earlier tax 27 years for that capacity. The total amount of the credit that may be received for a single 28 gas storage facility under this section may not exceed $30,000,000. The tax credit in 29 this section is in addition to any other credit under this chapter for which the person is 30 eligible. 31 (b) A gas storage facility qualifying for the credit in this section must 01 (1) have a working gas storage capacity of more than 500,000,000 02 cubic feet of gas other than cushion gas; 03 (2) have a minimum withdrawal capability of 10,000,000 cubic feet a 04 day as certified by the Alaska Oil and Gas Conservation Commission under 05 AS 31.05.032; 06 (3) be available for the storage of gas that is owned by a utility 07 regulated under AS 42.05; and 08 (4) if located on state land and leased or subject to a lease under 09 AS 38.05.180, be in compliance with the terms of the lease. 10 (c) The person applying for the credit under this section has the burden of 11 demonstrating compliance with the requirements of this section and the amount of the 12 credit being claimed. To apply for the credit, the person shall submit to the department 13 a copy of the certification of working gas storage capacity and withdrawal capability 14 issued under AS 31.05.032, the date that the gas storage facility commenced 15 commercial operation, and other information required by the department. A person 16 applying the credit against a liability under this chapter shall submit the application 17 claiming the credit with the taxpayer's return. A person that is not subject to tax under 18 this chapter that is applying for a transferable tax credit certificate under (d) of this 19 section shall submit the application claiming the credit before May 1 of the year 20 following the year in which the gas storage facility on which the credit is based first 21 commences commercial operation. 22 (d) A person entitled to a tax credit under this section that is greater than the 23 person's tax liability under this chapter may apply to the department for a transferable 24 tax credit certificate in the amount of the unused portion of the tax credit. The 25 department shall grant or deny the application in whole or in part within 120 days after 26 the date of the application. A person who receives a transferable tax credit certificate 27 under this subsection may transfer the certificate to another person, and a transferee 28 may further transfer the certificate. 29 (e) A person who receives a transferable tax credit certificate under this 30 section may apply to the department to have the department purchase the tax credit 31 certificate. The department may use available money in the oil and gas tax credit fund 01 established in AS 43.55.028 to purchase the certificate in whole or in part if the 02 department finds that (1) the applicant does not have an outstanding liability to the 03 state for unpaid delinquent taxes under this title; and (2) after application of all 04 available tax credits, the applicant's total tax liability under this chapter for any tax 05 year ending before the date on which the application is submitted is zero. In this 06 subsection, "unpaid delinquent tax" means an amount of tax for which the department 07 has issued an assessment that has not been paid and, if contested, has not been finally 08 resolved in the taxpayer's favor. 09 (f) For the purpose of determining the amount of the credit under this section, 10 the working gas storage capacity on which the credit is based shall be the capacity 11 certified by the Alaska Oil and Gas Conservation Commission under AS 31.05.032. 12 (g) A person may not receive a credit under this section for the acquisition of a 13 gas storage facility for which a credit has been granted under this section. 14 (h) If the gas storage facility for which a credit was received under this section 15 ceases commercial operation during the nine calendar years immediately following the 16 calendar year in which the gas storage facility commences commercial operation, the 17 tax liability under this chapter of the person who took the credit shall be increased. 18 The amount of the increase in tax liability 19 (1) shall be determined and assessed as of the first calendar year after 20 the gas storage facility ceases commercial operation, regardless of whether the gas 21 storage facility subsequently resumes commercial operation; and 22 (2) is equal to the total amount of the credit taken multiplied by a 23 fraction, the numerator of which is the difference between 10 and the number of 24 calendar years for which the gas storage facility was eligible for a tax credit under this 25 section and the denominator of which is 10. 26 (i) The issuance of a tax credit certificate under this section does not limit the 27 department's ability to later audit a tax credit claim to which the certificate relates or to 28 adjust the claim if the department determines, as a result of the audit, that the person 29 that received the credit was not entitled to the amount of the credit that was issued. 30 The tax liability of the person receiving the credit under this chapter is increased by 31 the amount of the credit that exceeds that to which the person was entitled. If the tax 01 liability is increased under this subsection, the increase bears interest under 02 AS 43.05.225 from the date the transferable tax credit certificate was issued. 03 (j) A person liable for an increased tax liability under (h) and (i) of this section 04 that otherwise is not subject to tax under this chapter is considered to be a corporation 05 subject to tax under this chapter. 06 (k) A person that applies for a tax credit under this section shall, when 07 contracting with a utility regulated under AS 42.05 to store the utility's gas, reduce the 08 price it would otherwise charge the utility to reflect the value of any tax credits 09 received under this section. 10 (l) A person that receives a tax credit under this section for a gas storage 11 facility that ceases commercial operation within nine calendar years immediately 12 following the calendar year in which the gas storage facility commences commercial 13 operation shall notify the department in writing of the date the gas storage facility 14 ceased commercial operation. The notice must be filed with the return due in the 15 calendar year immediately following the calendar year in which the gas storage 16 facility ceases commercial operation, or, if no return is due, before May 1 of the year 17 immediately following the year in which the gas storage facility ceases commercial 18 operation. The notice in this subsection is considered a return for purposes of 19 AS 43.05.260. 20 (m) In this section, "ceases commercial operation," "commences commercial 21 operation," "gas storage facility," and "working gas storage capacity" have the 22 meanings given in AS 31.05.032. 23  * Sec. 10. AS 43.55.011(m) is amended to read: 24 (m) Notwithstanding any contrary provision of AS 38.05.180(i), 25 AS 41.09.010, AS 43.55.024, or 43.55.025, the department shall provide by regulation 26 a method to ensure that, for a calendar year for which a producer's tax liability is 27 limited by (j), (k), or (o) of this section, tax credits based on a lease expenditure  28 incurred before January 1, 2011, that are otherwise available under 29 AS 38.05.180(i), AS 41.09.010, AS 43.55.024, or 43.55.025 and allocated to gas 30 subject to the limitations in (j), (k), and (o) of this section are accounted for as though 31 the credits had been applied first against a tax liability calculated without regard to the 01 limitations under (j), (k), and (o) of this section so as to reduce the tax liability to the 02 maximum amount provided for under (j) or (o) of this section for the production of gas 03 or (k) of this section for the production of oil. The regulation must provide for a 04 reasonable method to allocate tax credits to gas subject to (j) and (o) of this section. 05 Only the amount of a tax credit remaining after the accounting provided for under this 06 subsection may be used for a later calendar year, transferred to another person, or 07 applied against a tax levied on the production of oil or gas not subject to (j), (k), or (o) 08 of this section to the extent otherwise allowed. 09  * Sec. 11. AS 43.55.020 is amended by adding a new subsection to read: 10 (i) Cushion gas in a gas storage facility is not considered to be gas used in the 11 operation of a lease or property or gas used for repressuring as described in (e) of this 12 section. Gas withdrawn from a gas storage facility is considered to be non-native gas 13 until all non-native gas injected into the gas storage facility has been withdrawn from 14 the gas storage facility. Non-native gas withdrawn from a gas storage facility is not 15 considered to be gas produced for the purposes of AS 43.55.011 - 43.55.180. Gas 16 withdrawn from a gas storage facility after all non-native gas previously injected into 17 the gas storage facility has been withdrawn is gas considered to be produced from the 18 lease or property for the purposes of AS 43.55.011 - 43.55.180. In this subsection, 19 "gas storage facility," "native gas," and "non-native gas" have the meanings given in 20 AS 31.05.032. 21  * Sec. 12. AS 43.55.023(a) is amended to read: 22 (a) A producer or explorer may take a tax credit for a qualified capital 23 expenditure as follows: 24 (1) notwithstanding that a qualified capital expenditure may be a 25 deductible lease expenditure for purposes of calculating the production tax value of oil 26 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under 27 AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or 28 explorer that incurs a qualified capital expenditure may also elect to apply a tax credit 29 against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that 30 expenditure; the full amount of the credit for a qualified capital expenditure  31 incurred in the Cook Inlet sedimentary basin after December 31, 2010, may be  01 applied for a single calendar year; however, not more than half of the tax credit for  02 a qualified capital expenditure incurred outside of the Cook Inlet sedimentary  03 basin after December 31, 2010, may be applied for a single calendar year; 04 (2) a producer or explorer may take a credit for a qualified capital 05 expenditure incurred in connection with geological or geophysical exploration or in 06 connection with an exploration well only if the producer or explorer 07 (A) agrees, in writing, to the applicable provisions of 08 AS 43.55.025(f)(2); 09 (B) submits to the Department of Natural Resources all data 10 that would be required to be submitted under AS 43.55.025(f)(2). 11  * Sec. 13. AS 43.55.023(d) is amended to read: 12 (d) Except as limited by (i) of this section, a person that is entitled to take a tax 13 credit under this section that wishes to transfer the unused credit to another person or 14 obtain a cash payment under AS 43.55.028 may apply to the department for 15 transferable tax credit certificates. An application under this subsection must be in a 16 form prescribed by the department and must include supporting information and 17 documentation that the department reasonably requires. The department shall grant or 18 deny an application, or grant an application as to a lesser amount than that claimed and 19 deny it as to the excess, not later than 120 days after the latest of (1) March 31 of the 20 year following the calendar year in which the qualified capital expenditure or carried- 21 forward annual loss for which the credit is claimed was incurred; (2) the date the 22 statement required under AS 43.55.030(a) or (e) was filed for the calendar year in 23 which the qualified capital expenditure or carried-forward annual loss for which the 24 credit is claimed was incurred; or (3) the date the application was received by the 25 department. If, based on the information then available to it, the department is 26 reasonably satisfied that the applicant is entitled to a credit, the department shall,  27 except as provided in (n) of this section, issue the applicant two transferable tax 28 credit certificates, each for half of the amount of the credit; the [. THE] credit shown 29 on one of the two certificates is available for immediate use. The credit shown on the 30 second of the two certificates may not be applied against a tax for a calendar year 31 earlier than the calendar year following the calendar year in which the certificate is 01 issued, and the certificate must contain a conspicuous statement to that effect; a [. A] 02 certificate issued under this subsection does not expire. 03  * Sec. 14. AS 43.55.023(g) is amended to read: 04 (g) The issuance of a transferable tax credit certificate under (d) or (n) of this 05 section or the purchase of a certificate under AS 43.55.028 does not limit the 06 department's ability to later audit a tax credit claim to which the certificate relates or to 07 adjust the claim if the department determines, as a result of the audit, that the applicant 08 was not entitled to the amount of the credit for which the certificate was issued. The 09 tax liability of the applicant under AS 43.55.011(e) and 43.55.017 - 43.55.180 is 10 increased by the amount of the credit that exceeds that to which the applicant was 11 entitled, or the applicant's available valid outstanding credits applicable against the tax 12 levied by AS 43.55.011(e) are reduced by that amount. If the applicant's tax liability is 13 increased under this subsection, the increase bears interest under AS 43.05.225 from 14 the date the transferable tax credit certificate was issued. For purposes of this 15 subsection, an applicant that is an explorer is considered a producer subject to the tax 16 levied by AS 43.55.011(e). 17  * Sec. 15. AS 43.55.023 is amended by adding new subsections to read: 18 (m) A producer or explorer may apply for a tax credit for a Cook Inlet well 19 lease expenditure incurred after December 31, 2010, as follows: 20 (1) notwithstanding that a Cook Inlet well lease expenditure may be a 21 deductible lease expenditure for purposes of calculating the production tax value of oil 22 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under (a) 23 of this section, AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a 24 producer or explorer that incurs a Cook Inlet well lease expenditure may also elect to 25 apply a tax credit against a tax levied by AS 43.55.011(e) in the amount of 40 percent 26 of that expenditure. A tax credit under this subsection may be applied for a single 27 calendar year; 28 (2) a producer or explorer may take a credit for a Cook Inlet well lease 29 expenditure incurred in connection with geological or geophysical exploration or in 30 connection with an exploration well only if the producer or explorer 31 (A) agrees, in writing, to the applicable provisions of 01 AS 43.55.025(f)(2); and 02 (B) submits to the Department of Natural Resources all data 03 that would be required to be submitted under AS 43.55.025(f)(2). 04 (n) For a lease expenditure incurred in the Cook Inlet sedimentary basin after 05 December 31, 2010, that qualifies for tax credits under (a) and (b) of this section, and 06 for a Cook Inlet well lease expenditure that qualifies for a tax credit under (m) of this 07 section, the department shall issue a transferable tax credit certificate to the person 08 entitled to the credit for the full amount of the credit. The transferable tax credit is 09 available for immediate use and does not expire. 10  * Sec. 16. AS 43.55.028(a) is amended to read: 11 (a) The oil and gas tax credit fund is established as a separate fund of the state. 12 The purpose of the fund is to purchase [CERTAIN] transferable tax credit certificates 13 issued under AS 43.20.046 and AS 43.55.023 and [CERTAIN] production tax credit 14 certificates issued under AS 43.55.025. 15  * Sec. 17. AS 43.55.028(e) is amended to read: 16 (e) The department, on the written application of a [THE] person to whom a 17 transferable tax credit certificate has been issued under AS 43.55.023(d) or (n) or to  18 whom a production tax credit certificate has been issued under AS 43.55.025(f), may 19 use available money in the oil and gas tax credit fund to purchase, in whole or in part, 20 the certificate if the department finds that 21 (1) the calendar year of the purchase is not earlier than the first 22 calendar year for which the credit shown on the certificate would otherwise be allowed 23 to be applied against a tax; 24 (2) except for the application of a person for the purchase of a  25 transferable tax credit certificate issued under AS 43.55.023(n),  26 (A) within 24 months after applying for the transferable tax 27 credit certificate or filing a claim for the production tax credit certificate, the 28 applicant incurred a qualified capital expenditure or was the successful bidder 29 on a bid submitted for a lease on state land under AS 38.05.180(f); 30 (B) [(3)] the amount expended for the purchase would not 31 exceed the total of qualified capital expenditures and successful bids described 01 in (A) [(2)] of this paragraph [SUBSECTION] that have not been the subject 02 of a finding made under this subparagraph [PARAGRAPH] for purposes of a 03 previous purchase of a certificate; 04 (3) [(4)] the applicant does not have an outstanding liability to the state 05 for unpaid delinquent taxes under this title; 06 (4) [(5)] the applicant's total tax liability under AS 43.55.011(e), after 07 application of all available tax credits, for the calendar year in which the application is 08 made is zero; 09 (5) [(6)] the applicant's average daily production of oil and gas taxable 10 under AS 43.55.011(e) during the calendar year preceding the calendar year in which 11 the application is made was not more than 50,000 BTU equivalent barrels; and 12 (6) [(7)] the purchase is consistent with this section and regulations 13 adopted under this section. 14  * Sec. 18. AS 43.55.028(g) is amended to read: 15 (g) The department may adopt regulations to carry out the purposes of this 16 section, including standards and procedures to allocate available money among 17 applications for purchases under AS 43.20.046 and this chapter when the total 18 amount of the applications for purchase [WHICH] exceeds the amount of available 19 money in the fund. The regulations adopted by the department may not, when  20 allocating available money in the fund under this section, distinguish an  21 application for the purchase of a credit certificate issued under AS 43.20.046 or  22 AS 43.55.023(n).  23  * Sec. 19. AS 44.23.020(e) is amended to read: 24 (e) There is established within the Department of Law the function of public 25 advocacy for regulatory affairs. The attorney general shall participate as a party in a 26 matter that comes before the Regulatory Commission of Alaska when the attorney 27 general determines that participation is in the public interest. When considering  28 whether participation is in the public interest, the attorney general shall consider  29 the issues the Regulatory Commission of Alaska must take into consideration  30 under AS 42.05.141(d).  31  * Sec. 20. This Act takes effect immediately under AS 01.10.070(c).