00 CS FOR HOUSE BILL NO. 110(RES) 01 "An Act relating to the interest rate applicable to certain amounts due for fees, taxes, 02 and payments made and property delivered to the Department of Revenue; relating to 03 the oil and gas production tax rate; relating to monthly installment payments of 04 estimated oil and gas production tax; relating to oil and gas production tax credits, 05 including qualified capital credits for exploration, development, and production; 06 relating to certain additional nontransferable oil and gas production tax credits; relating 07 to the determination of oil and gas production tax values; relating to the disclosure of 08 certain tax information; making conforming amendments; and providing for an 09 effective date." 10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 11  * Section 1. AS 05.15.095(c) is amended to read: 12 (c) A delinquent fee bears interest at the rate set by AS 43.05.225(2) 01 [AS 43.05.225]. 02  * Sec. 2. AS 34.45.470(a) is amended to read: 03 (a) A person who fails to pay or deliver property within the time prescribed by 04 this chapter may be required to pay to the department interest at the annual rate 05 calculated under AS 43.05.225(2) [AS 43.05.225] on the property or the value of it 06 from the date the property should have been paid or delivered. 07  * Sec. 3. AS 43.05.225 is amended to read: 08 Sec. 43.05.225. Interest. Unless otherwise provided, 09 (1) when a tax levied in this title becomes delinquent, it bears interest 10 in a calendar quarter at the rate of three [FIVE] percentage points above the annual 11 rate charged member banks for advances by the 12th Federal Reserve District as of the 12 first day of that calendar quarter, or at the annual rate of 11 percent, whichever is 13 lesser [GREATER], compounded quarterly as of the last day of that quarter; 14 (2) the interest rate is 12 percent a year for 15 (A) delinquent fees payable under AS 05.15.095(c); and  16 (B) [REPEALED AND 17 (C)] unclaimed property that is not timely paid or delivered, as 18 allowed by AS 34.45.470(a). 19  * Sec. 4. AS 43.20.046(i) is amended to read: 20 (i) The issuance of a refund under this section does not limit the department's 21 ability to later audit or adjust the claim if the department determines, as a result of the 22 audit, that the person that claimed the credit was not entitled to the amount of the 23 credit. The tax liability of the person receiving the credit under this chapter is 24 increased by the amount of the credit that exceeds that to which the person was 25 entitled. If the tax liability is increased under this subsection, the increase bears 26 interest under AS 43.05.225(1) [AS 43.05.225] from the date the refund was issued. 27  * Sec. 5. AS 43.50.570 is amended to read: 28 Sec. 43.50.570. Interest. A licensee who fails to pay an amount due for the 29 purchase of stamps within the time required 30 (1) is considered to have failed to pay the cigarette taxes due under this 31 chapter; and 01 (2) shall pay interest at the rate established under AS 43.05.225(1) 02 [AS 43.05.225] from the date on which the amount became due until the date of 03 payment. 04  * Sec. 6. AS 43.55.011(e) is amended to read: 05 (e) There is levied on the producer of oil or gas a tax for all oil and gas 06 produced each calendar year from each lease or property in the state, less any oil and 07 gas the ownership or right to which is exempt from taxation or constitutes a 08 landowner's royalty interest. Except as otherwise provided under (f), (j), (k), and (o) of 09 this section, for  10 (1) oil and gas produced from a lease or property containing land  11 that, as of December 31, 2008, was within a unit or in commercial production, the 12 tax is equal to [THE SUM OF 13 (1)] the annual production tax value of the taxable oil and gas as 14 calculated under AS 43.55.160(a)(1) multiplied by the tax rate calculated [25 15 PERCENT; AND 16 (2) THE SUM, OVER ALL MONTHS OF THE CALENDAR YEAR, 17 OF THE TAX AMOUNTS DETERMINED] under (g)(1) [(g)] of this section;  18 (2) other oil and gas, the tax is equal to the annual production tax  19 value of the taxable oil and gas as calculated under AS 43.55.160(a)(1) multiplied  20 by the tax rate calculated under (g)(2) of this section. 21  * Sec. 7. AS 43.55.011(f) is amended to read: 22 (f) The levy of tax under this section for oil and gas produced north of 68 23 degrees North latitude, other than oil and gas production subject to (i) of this section 24 and gas subject to (o) of this section, may not be less than 25 (1) four percent of the gross value at the point of production when the 26 average price per barrel for Alaska North Slope crude oil for sale on the United States 27 West Coast during the calendar year for which the tax is due is more than $20 [$25]; 28 (2) three percent of the gross value at the point of production when the 29 average price per barrel for Alaska North Slope crude oil for sale on the United States 30 West Coast during the calendar year for which the tax is due is over $17.50 [$20] but 31 not over $20 [$25]; 01 (3) two percent of the gross value at the point of production when the 02 average price per barrel for Alaska North Slope crude oil for sale on the United States 03 West Coast during the calendar year for which the tax is due is over $15 [$17.50] but 04 not over $17.50 [$20]; 05 (4) one percent of the gross value at the point of production when the 06 average price per barrel for Alaska North Slope crude oil for sale on the United States 07 West Coast during the calendar year for which the tax is due is over $12.50 [$15] but 08 not over $15 [$17.50]; or 09 (5) zero percent of the gross value at the point of production when the 10 average price per barrel for Alaska North Slope crude oil for sale on the United States 11 West Coast during the calendar year for which the tax is due is $12.50 [$15] or less. 12  * Sec. 8. AS 43.55.011(g) is repealed and reenacted to read: 13 (g) The tax rate for a calendar year for purposes of 14 (1) (e)(1) of this section is equal to the percentage rate obtained by 15 performing the following calculations: 16 (A) calculating, for the calendar year, the producer's average 17 annual production tax value under AS 43.55.160(a)(1) for each BTU 18 equivalent barrel of the taxable oil and gas subject to (e)(1) of this section; 19 (B) calculating the fraction, if any, of that average annual 20 production tax value for each BTU equivalent barrel that falls within each 21 range of incremental production tax value for each BTU equivalent barrel in 22 the table set out in (D) of this paragraph; 23 (C) multiplying each of those fractions by the corresponding 24 incremental rate in the table set out in (D) of this paragraph; and 25 (D) adding together the products calculated under (C) of this 26 paragraph; the table of incremental values and incremental rates is as follows: 27 Incremental Production Tax Value for each 28 BTU Equivalent Barrel Incremental Rate 29 Not more than $30 25 percent 30 More than $30 but not more than $42.50 27.5 percent 31 More than $42.50 but not more than $55 32.5 percent 01 More than $55 but not more than $67.50 37.5 percent 02 More than $67.50 but not more than $80 42.5 percent 03 More than $80 but not more than $92.50 47.5 percent 04 More than $92.50 50 percent 05 (2) (e)(2) of this section is equal to the percentage rate obtained by 06 performing the following calculations: 07 (A) calculating, for the calendar year, the producer's average 08 annual production tax value under AS 43.55.160(a)(1) for each BTU 09 equivalent barrel of the taxable oil and gas not subject to (e)(1) of this section; 10 (B) calculating the fraction, if any, of that average annual 11 production tax value for each BTU equivalent barrel that falls within each 12 range of incremental production tax value for each BTU equivalent barrel in 13 the table set out in (D) of this paragraph; 14 (C) multiplying each of those fractions by the corresponding 15 incremental rate in the table set out in (D) of this paragraph; and 16 (D) adding together the products calculated under (C) of this 17 paragraph; the table of incremental values and incremental rates is as follows: 18 Incremental Production Tax Value for each 19 BTU Equivalent Barrel Incremental Rate 20 Not more than $30 15 percent 21 More than $30 but not more than $42.50 17.5 percent 22 More than $42.50 but not more than $55 22.5 percent 23 More than $55 but not more than $67.50 27.5 percent 24 More than $67.50 but not more than $80 32.5 percent 25 More than $80 but not more than $92.50 37.5 percent 26 More than $92.50 40 percent 27  * Sec. 9. AS 43.55.020(a) is repealed and reenacted to read: 28 (a) For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i) 29 shall pay the tax as follows: 30 (1) an installment payment of the estimated tax levied by 31 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 01 month of the calendar year on the last day of the following month; except as otherwise 02 provided under (2) of this subsection, the amount of the installment payment is the 03 sum of the amounts calculated in (A) - (D) of this paragraph, less 1/12 of the tax 04 credits that are allowed by law to be applied against the tax levied by AS 43.55.011(e) 05 for the calendar year, but the amount of the installment payment may not be less than 06 zero: 07 (A) the sum of the monthly production tax values for the month 08 under AS 43.55.160(a)(2) for the categories described in 09 AS 43.55.160(a)(1)(B) and (F), multiplied by the tax rate calculated for the 10 calendar year of production under AS 43.55.011(g)(1); 11 (B) the greater of 12 (i) the sum of the product of the monthly production tax 13 value for the month under AS 43.55.160(a)(2) for the category 14 described in AS 43.55.160(a)(1)(A) multiplied by the tax rate 15 calculated for the calendar year of production under 16 AS 43.55.011(g)(1), and the product of the monthly production tax 17 value for the month under AS 43.55.160(a)(2) for the category 18 described in AS 43.55.160(a)(1)(G) multiplied by the tax rate 19 calculated for the calendar year of production under 20 AS 43.55.011(g)(2); or 21 (ii) zero percent, one percent, two percent, three 22 percent, or four percent, as applicable under AS 43.55.011(f), of the 23 gross value at the point of production of the oil and gas, other than gas 24 subject to AS 43.55.011(o), produced during the month from all leases 25 or properties that include land north of 68 degrees North latitude; for 26 purposes of this sub-subparagraph, the applicable percentage under 27 AS 43.55.011(f) is determined by substituting in AS 43.55.011(f)(1) - 28 (5) the phrase "month for which the installment payment is calculated" 29 in place of the phrase "calendar year for which the tax is due"; 30 (C) for oil produced during the month from each lease or 31 property subject to AS 43.55.011(k), for gas produced during the month from 01 each lease or property subject to AS 43.55.011(j), and for gas subject to 02 AS 43.55.011(o) produced during the month from each lease or property, the 03 monthly production tax value for the month calculated under 04 AS 43.55.160(a)(2) for the categories described in AS 43.55.160(a)(1)(C), (D), 05 or (E), respectively, multiplied by 06 (i) the tax rate calculated for the calendar year of 07 production under AS 43.55.011(g)(1), for a lease or property subject to 08 AS 43.55.011(e)(1); or 09 (ii) the tax rate calculated for the calendar year of 10 production under AS 43.55.011(g)(2), for a lease or property not 11 subject to AS 43.55.011(e)(1); and 12 (D) the sum of the monthly production tax values for the month 13 under AS 43.55.160(a)(2) for the categories described in 14 AS 43.55.160(a)(1)(H) and (I), multiplied by the tax rate calculated for the 15 calendar year of production under AS 43.55.011(g)(2); 16 (2) an amount calculated under (1)(C) of this subsection for oil or gas 17 produced from a particular lease or property may not exceed the product obtained by 18 carrying out the calculation set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, 19 or set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas, but 20 substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the amount of taxable 21 oil produced during the month for the amount of taxable oil produced during the 22 calendar year and substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as 23 applicable, the amount of taxable gas produced during the month for the amount of 24 taxable gas produced during the calendar year; 25 (3) an installment payment of the estimated tax levied by 26 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 27 on the last day of the following month; the amount of the installment payment is the 28 sum of 29 (A) the applicable tax rate for oil provided under 30 AS 43.55.011(i), multiplied by the gross value at the point of production of the 31 oil taxable under AS 43.55.011(i) and produced from the lease or property 01 during the month; and 02 (B) the applicable tax rate for gas provided under 03 AS 43.55.011(i), multiplied by the gross value at the point of production of the 04 gas taxable under AS 43.55.011(i) and produced from the lease or property 05 during the month; 06 (4) any amount of tax levied by AS 43.55.011(e) or (i), net of any 07 credits applied as allowed by law, that exceeds the total of the amounts due as 08 installment payments of estimated tax is due on March 31 of the year following the 09 calendar year of production. 10  * Sec. 10. AS 43.55.020(g) is amended to read: 11 (g) Notwithstanding any contrary provision of AS 43.05.225, an unpaid 12 amount of an installment payment required under (a)(1) - (3) of this section that is not 13 paid when due bears interest (1) at the rate provided for an underpayment under 26 14 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date 15 the installment payment is due until March 31 following the calendar year of 16 production, and (2) as provided for a delinquent tax under AS 43.05.225(1) 17 [AS 43.05.225] after that March 31. Interest accrued under (1) of this subsection that 18 remains unpaid after that March 31 is treated as an addition to tax that bears interest 19 under (2) of this subsection. An unpaid amount of tax due under (a)(4) of this section 20 that is not paid when due bears interest as provided for a delinquent tax under 21 AS 43.05.225(1) [AS 43.05.225]. 22  * Sec. 11. AS 43.55.023(a) is amended to read: 23 (a) A producer or explorer may take a tax credit for a qualified capital 24 expenditure as follows: 25 (1) notwithstanding that a qualified capital expenditure may be a 26 deductible lease expenditure for purposes of calculating the production tax value of oil 27 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under 28 AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or 29 explorer that incurs a qualified capital expenditure may also elect to apply a tax credit 30 against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that 31 expenditure; [HOWEVER, NOT MORE THAN HALF OF THE TAX CREDIT MAY 01 BE APPLIED FOR A SINGLE CALENDAR YEAR;] 02 (2) a producer or explorer may take a credit for a qualified capital 03 expenditure incurred in connection with geological or geophysical exploration or in 04 connection with an exploration well only if the producer or explorer 05 (A) agrees, in writing, to the applicable provisions of 06 AS 43.55.025(f)(2); 07 (B) submits to the Department of Natural Resources all data 08 that would be required to be submitted under AS 43.55.025(f)(2). 09  * Sec. 12. AS 43.55.023(d) is amended to read: 10 (d) Except as limited by (i) of this section, a person that is entitled to take a tax 11 credit under this section that wishes to transfer the unused credit to another person or 12 obtain a cash payment under AS 43.55.028 may apply to the department for 13 transferable tax credit certificate [CERTIFICATES]. An application under this 14 subsection must be in a form prescribed by the department and must include 15 supporting information and documentation that the department reasonably requires. 16 The department shall grant or deny an application, or grant an application as to a lesser 17 amount than that claimed and deny it as to the excess, not later than 120 days after the 18 latest of (1) March 31 of the year following the calendar year in which the qualified 19 capital expenditure, well lease expenditure, or carried-forward annual loss for which 20 the credit is claimed was incurred; (2) the date the statement required under 21 AS 43.55.030(a) or (e) was filed for the calendar year in which the qualified capital 22 expenditure, well lease expenditure, or carried-forward annual loss for which the 23 credit is claimed was incurred; or (3) the date the application was received by the 24 department. If, based on the information then available to it, the department is 25 reasonably satisfied that the applicant is entitled to a credit, the department shall issue 26 the applicant a [TWO] transferable tax credit certificate for [CERTIFICATES, 27 EACH FOR HALF OF] the amount of the credit. [THE CREDIT SHOWN ON ONE 28 OF THE TWO CERTIFICATES IS AVAILABLE FOR IMMEDIATE USE. THE 29 CREDIT SHOWN ON THE SECOND OF THE TWO CERTIFICATES MAY NOT 30 BE APPLIED AGAINST A TAX FOR A CALENDAR YEAR EARLIER THAN 31 THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH 01 THE CERTIFICATE IS ISSUED, AND THE CERTIFICATE MUST CONTAIN A 02 CONSPICUOUS STATEMENT TO THAT EFFECT.] A certificate issued under this 03 subsection does not expire. 04  * Sec. 13. AS 43.55.023(g) is amended to read: 05 (g) The issuance of a transferable tax credit certificate under (d) or (m) of this 06 section or the purchase of a certificate under AS 43.55.028 does not limit the 07 department's ability to later audit a tax credit claim to which the certificate relates or to 08 adjust the claim if the department determines, as a result of the audit, that the applicant 09 was not entitled to the amount of the credit for which the certificate was issued. The 10 tax liability of the applicant under AS 43.55.011(e) and 43.55.017 - 43.55.180 is 11 increased by the amount of the credit that exceeds that to which the applicant was 12 entitled, or the applicant's available valid outstanding credits applicable against the tax 13 levied by AS 43.55.011(e) are reduced by that amount. If the applicant's tax liability is 14 increased under this subsection, the increase bears interest under AS 43.05.225(1) 15 [AS 43.05.225] from the date the transferable tax credit certificate was issued. For 16 purposes of this subsection, an applicant that is an explorer is considered a producer 17 subject to the tax levied by AS 43.55.011(e). 18  * Sec. 14. AS 43.55.023(g) is amended to read: 19 (g) The issuance of a transferable tax credit certificate under (d) of this  20 section or former (m) of this section or the purchase of a certificate under 21 AS 43.55.028 does not limit the department's ability to later audit a tax credit claim to 22 which the certificate relates or to adjust the claim if the department determines, as a 23 result of the audit, that the applicant was not entitled to the amount of the credit for 24 which the certificate was issued. The tax liability of the applicant under 25 AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased by the amount of the credit 26 that exceeds that to which the applicant was entitled, or the applicant's available valid 27 outstanding credits applicable against the tax levied by AS 43.55.011(e) are reduced 28 by that amount. If the applicant's tax liability is increased under this subsection, the 29 increase bears interest under AS 43.05.225(1) from the date the transferable tax credit 30 certificate was issued. For purposes of this subsection, an applicant that is an explorer 31 is considered a producer subject to the tax levied by AS 43.55.011(e). 01  * Sec. 15. AS 43.55.023(l) is amended to read: 02 (l) A producer or explorer may apply for a tax credit for a well lease 03 expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH 04 LATITUDE] after December 31, 2011 [JUNE 30, 2010], as follows: 05 (1) notwithstanding that a well lease expenditure [INCURRED IN 06 THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] may be a deductible 07 lease expenditure for purposes of calculating the production tax value of oil and gas 08 under AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this 09 section, AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer 10 or explorer that incurs a well lease expenditure [IN THE STATE SOUTH OF 68 11 DEGREES NORTH LATITUDE] may elect to apply a tax credit against a tax levied 12 by AS 43.55.011(e) in the amount of 40 percent of that expenditure; [A TAX CREDIT 13 UNDER THIS PARAGRAPH MAY BE APPLIED FOR A SINGLE CALENDAR 14 YEAR;] 15 (2) a producer or explorer may take a credit for a well lease 16 expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH 17 LATITUDE] in connection with geological or geophysical exploration or in 18 connection with an exploration well only if the producer or explorer 19 (A) agrees, in writing, to the applicable provisions of 20 AS 43.55.025(f)(2); and 21 (B) submits to the Department of Natural Resources all data 22 that would be required to be submitted under AS 43.55.025(f)(2). 23  * Sec. 16. AS 43.55.023(n) is amended to read: 24 (n) For the purposes of (l) [AND (m)] of this section, a well lease expenditure 25 [INCURRED IN THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] is a 26 lease expenditure that is 27 (1) directly related to an exploration well, a stratigraphic test well, a 28 producing well, or an injection well other than a disposal well, [LOCATED IN THE 29 STATE SOUTH OF 68 DEGREES NORTH LATITUDE,] if the expenditure is a 30 qualified capital expenditure and an intangible drilling and development cost 31 authorized under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R. 01 1.612-4, regardless of the elections made under 26 U.S.C. 263(c); in this paragraph, an 02 expenditure directly related to a well includes an expenditure for well sidetracking, 03 well deepening, well completion or recompletion, or well workover, regardless of 04 whether the well is or has been a producing well; or 05 (2) an expense for seismic work conducted within the boundaries of a 06 production or exploration unit. 07  * Sec. 17. AS 43.55.023 is amended by adding a new subsection to read: 08 (p) A producer that incurs more than 80 percent of its wage and compensation 09 expenditures for wages and compensation paid to Alaska residents may take a tax 10 credit against the tax levied under AS 43.55.011(e) equal to the percentage by which 11 the wages and compensation paid to Alaska residents exceeds 80 percent of all wages 12 and compensation paid by the producer in the state. The department, in consultation 13 with the Department of Labor and Workforce Development, shall adopt regulations 14 necessary to administer the credit authorized by this subsection. Notwithstanding (c) 15 of this section, the unused amount of credit under this subsection may not be carried 16 forward for more than two years, and, notwithstanding (d), (e), and (g) of this section, 17 a producer may not transfer a tax credit or obtain a transferable tax credit certificate 18 for a credit authorized under this subsection. In this subsection, "Alaska resident" has 19 the meaning given in AS 43.82.230. 20  * Sec. 18. AS 43.55.024(b) is amended to read: 21 (b) A producer may not take a tax credit under (a) of this section for any 22 calendar year after the later of 23 (1) 2021 [2016]; or 24 (2) the ninth calendar year after the calendar year during which the 25 producer first has commercial oil or gas production before May 1, 2021 [2016], from 26 at least one lease or property in the state outside the Cook Inlet sedimentary basin, no 27 part of which is north of 68 degrees North latitude, if the producer did not have 28 commercial oil or gas production from a lease or property in the state outside the Cook 29 Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, before 30 April 1, 2006. 31  * Sec. 19. AS 43.55.024(c) is amended to read: 01 (c) For a calendar year for which a producer's tax liability under 02 AS 43.55.011(e) exceeds zero before application of any credits under this chapter, 03 other than a credit under (a) of this section but after application of any credit under (a) 04 of this section, a producer that is qualified under (e) of this section and whose average 05 amount of oil and gas produced a day and taxable under AS 43.55.011(e) is less than 06 100,000 BTU equivalent barrels a day may apply a tax credit under this subsection 07 against that liability. A producer whose average amount of oil and gas produced a day 08 and taxable under AS 43.55.011(e) is 09 (1) not more than 50,000 BTU equivalent barrels may apply a tax 10 credit of not more than $15,000,000 [$12,000,000] for the calendar year; 11 (2) more than 50,000 and less than 100,000 BTU equivalent barrels 12 may apply a tax credit of not more than $15,000,000 [$12,000,000] multiplied by the 13 following fraction for the calendar year: 14 1 - [2 X (AP - 50,000)] / 100,000 15 where AP = the average amount of oil and gas taxable under AS 43.55.011(e), 16 produced a day during the calendar year in BTU equivalent barrels. 17  * Sec. 20. AS 43.55.024(d) is amended to read: 18 (d) A producer may not take a tax credit under (c) of this section for any 19 calendar year after the later of 20 (1) 2021 [2016]; or 21 (2) if the producer did not have commercial oil or gas production from 22 a lease or property in the state before April 1, 2006, the ninth calendar year after the 23 calendar year during which the producer first has commercial oil or gas production 24 before May 1, 2021 [2016], from at least one lease or property in the state. 25  * Sec. 21. AS 43.55.025(a) is amended to read: 26 (a) Subject to the terms and conditions of this section, a credit against the 27 production tax levied by AS 43.55.011(e) is allowed for exploration expenditures that 28 qualify under (b) of this section in an amount equal to one of the following: 29 (1) 30 percent of the total exploration expenditures that qualify only 30 under (b) and (c) of this section; 31 (2) 30 percent of the total exploration expenditures that qualify only 01 under (b) and (d) of this section; 02 (3) 40 percent of the total exploration expenditures that qualify under 03 (b), (c), and (d) of this section; 04 (4) 40 percent of the total exploration expenditures that qualify only 05 under (b) and (e) of this section; [OR] 06 (5) 80, 90, or 100 percent, or a lesser amount described in (l) of this 07 section, of the total exploration expenditures described in (b)(1) and (2) of this section 08 and not excluded by (b)(3) and (4) of this section that qualify only under (l) of this 09 section; or  10 (6) 30 percent of the total exploration expenditures that qualify  11 only under (b) and (n) of this section. 12  * Sec. 22. AS 43.55.025(b) is amended to read: 13 (b) To qualify for the production tax credit under (a) of this section, an 14 exploration expenditure must be incurred for work performed after June 30, 2008, and 15 before July 1, 2021 [2016], and 16 (1) may be for seismic or other geophysical exploration costs not 17 connected with a specific well; 18 (2) if for an exploration well, 19 (A) must be incurred by an explorer that holds an interest in the 20 exploration well for which the production tax credit is claimed; 21 (B) may be for either a well that encounters an oil or gas 22 deposit or a dry hole; 23 (C) must be for a well that has been completed, suspended, or 24 abandoned at the time the explorer claims the tax credit under (f) of this 25 section; and 26 (D) must be for goods, services, or rentals of personal property 27 reasonably required for the surface preparation, drilling, casing, cementing, 28 and logging of an exploration well, and, in the case of a dry hole, for the 29 expenses required for abandonment if the well is abandoned within 18 months 30 after the date the well was spudded; 31 (3) may not be for administration, supervision, engineering, or lease 01 operating costs; geological or management costs; community relations or 02 environmental costs; bonuses, taxes, or other payments to governments related to the 03 well; costs, including repairs and replacements, arising from or associated with fraud, 04 wilful misconduct, gross negligence, criminal negligence, or violation of law, 05 including a violation of 33 U.S.C. 1319(c)(1) or 1321(b)(3) (Clean Water Act); or 06 other costs that are generally recognized as indirect costs or financing costs; and 07 (4) may not be incurred for an exploration well or seismic exploration 08 that is included in a plan of exploration or a plan of development for any unit before 09 May 14, 2003. 10  * Sec. 23. AS 43.55.025(k) is amended to read: 11 (k) Subject to the terms and conditions of this section, if a claim is filed under 12 (f)(1) of this section before January 1, 2021 [2016], a credit against the production tax 13 levied by AS 43.55.011(e) is allowed in an amount equal to five percent of an eligible 14 expenditure under this subsection incurred for seismic exploration performed before 15 July 1, 2003. To be eligible under this subsection, an expenditure must 16 (1) have been for seismic exploration that 17 (A) obtained data that the commissioner of natural resources 18 considers to be in the best interest of the state to acquire for public distribution; 19 and 20 (B) was conducted outside the boundaries of a production unit; 21 however, the amount of the expenditure that is otherwise eligible under this 22 section is reduced proportionately by the portion of the seismic exploration 23 activity that crossed into a production unit; and 24 (2) qualify under (b)(3) of this section. 25  * Sec. 24. AS 43.55.025 is amended by adding a new subsection to read: 26 (n) To be eligible for the 30 percent production tax credit authorized by (a)(6) 27 of this section, exploration expenditures must be for a well drilled north of 68 degrees 28 North latitude that is 29 (1) outside of a unit; or 30 (2) within a unit formed after June 30, 2008, and the exploration 31 expenditures are incurred before the later of the date that is four years after the date 01 the 02 (A) unit is formed; or 03 (B) first exploration well is drilled on a lease or property that is 04 within the unit. 05  * Sec. 25. AS 43.55.028(e) is amended to read: 06 (e) The department, on the written application of a person to whom a 07 transferable tax credit certificate has been issued under AS 43.55.023(d) or former  08 AS 43.55.023(m) [(m)] or to whom a production tax credit certificate has been issued 09 under AS 43.55.025(f), may use available money in the oil and gas tax credit fund to 10 purchase, in whole or in part, the certificate if the department finds that 11 (1) the calendar year of the purchase is not earlier than the first 12 calendar year for which the credit shown on the certificate would otherwise be allowed 13 to be applied against a tax; 14 (2) [REPEALED 15 (3) REPEALED 16 (4)] the applicant does not have an outstanding liability to the state for 17 unpaid delinquent taxes under this title; 18 (3) [(5)] the applicant's total tax liability under AS 43.55.011(e), after 19 application of all available tax credits, for the calendar year in which the application is 20 made is zero; 21 (4) [(6)] the applicant's average daily production of oil and gas taxable 22 under AS 43.55.011(e) during the calendar year preceding the calendar year in which 23 the application is made was not more than 50,000 BTU equivalent barrels; and 24 (5) [(7)] the purchase is consistent with this section and regulations 25 adopted under this section. 26  * Sec. 26. AS 43.55.028(g) is amended to read: 27 (g) The department may adopt regulations to carry out the purposes of this 28 section, including standards and procedures to allocate available money among 29 applications for purchases under this chapter and claims for refunds under 30 AS 43.20.046 when the total amount of the applications for purchase and claims for 31 refund exceed the amount of available money in the fund. The regulations adopted by 01 the department may not, when allocating available money in the fund under this 02 section, distinguish an application for the purchase of a credit certificate issued under 03 former AS 43.55.023(m) or a claim for refund under AS 43.20.046. 04  * Sec. 27. AS 43.55.160(a) is repealed and reenacted to read: 05 (a) Except as provided in (b) of this section, for the purposes of 06 (1) AS 43.55.011(e), the annual production tax value of taxable oil, 07 gas, or oil and gas produced by a producer during a calendar year, in a given category 08 for which a separate production tax value is required to be calculated under this 09 paragraph, is equal to the gross value at the point of production of that oil, gas, or oil 10 and gas, respectively, taxable under AS 43.55.011(e), less the producer's lease 11 expenditures under AS 43.55.165 for the calendar year that are applicable to the oil, 12 gas, or oil and gas, respectively, in that category produced by the producer during the 13 calendar year, as adjusted under AS 43.55.170; a separate annual production tax value 14 must be calculated for 15 (A) oil and gas, other than gas produced before 2022 and used 16 in the state, produced in aggregate from all leases or properties in the state that 17 include land north of 68 degrees North latitude and are subject to 18 AS 43.55.011(e)(1); 19 (B) oil and gas, other than gas produced before 2022 and used 20 in the state, produced in aggregate from all leases or properties in the state that 21 are subject to AS 43.55.011(e)(1) and are described in AS 43.55.024(a), during 22 a calendar year before or during the last calendar year under AS 43.55.024(b) 23 for which the producer could take a tax credit under AS 43.55.024(a); 24 (C) oil produced before 2022 from each lease or property in the 25 Cook Inlet sedimentary basin; 26 (D) gas produced before 2022 from each lease or property in 27 the Cook Inlet sedimentary basin; 28 (E) gas produced before 2022 from each lease or property in 29 the state outside the Cook Inlet sedimentary basin and used in the state; 30 (F) oil and gas produced in aggregate from all leases or 31 properties in the state that do not include land north of 68 degrees North 01 latitude and are subject to AS 43.55.011(e)(1); this subparagraph does not 02 apply to 03 (i) gas that is produced before 2022 and used in the 04 state; 05 (ii) oil or gas that is produced before 2022 from a lease 06 or property in the Cook Inlet sedimentary basin; 07 (iii) oil or gas that is produced from a lease or property 08 described in AS 43.55.024(a) during a calendar year before or during 09 the last calendar year under AS 43.55.024(b) for which the producer 10 could take a tax credit under AS 43.55.024(a); 11 (G) oil and gas, other than gas produced before 2022 and used 12 in the state, produced in aggregate from all leases or properties in the state that 13 include land north of 68 degrees North latitude and are not subject to 14 AS 43.55.011(e)(1); 15 (H) oil and gas, other than gas produced before 2022 and used 16 in the state, produced in aggregate from all leases or properties in the state that 17 are not subject to AS 43.55.011(e)(1) and are described in AS 43.55.024(a), 18 during a calendar year before or during the last calendar year under 19 AS 43.55.024(b) for which the producer could take a tax credit under 20 AS 43.55.024(a); 21 (I) oil and gas produced in aggregate from all leases or 22 properties in the state that do not include land north of 68 degrees North 23 latitude and are not subject to AS 43.55.011(e)(1); this subparagraph does not 24 apply to 25 (i) gas that is produced before 2022 and used in the 26 state; 27 (ii) oil or gas that is produced before 2022 from a lease 28 or property in the Cook Inlet sedimentary basin; 29 (iii) oil or gas that is produced from a lease or property 30 described in AS 43.55.024(a) during a calendar year before or during 31 the last calendar year under AS 43.55.024(b) for which the producer 01 could take a tax credit under AS 43.55.024(a); 02 (2) AS 43.55.020(a), the monthly production tax value of taxable oil, 03 gas, or oil and gas produced by a producer during a month, in a given category for 04 which a separate production tax value is required to be calculated under this 05 paragraph, is equal to the gross value at the point of production of that oil, gas, or oil 06 and gas, respectively, taxable under AS 43.55.011(e), less 1/12 of the producer's lease 07 expenditures under AS 43.55.165 for the calendar year that are applicable to the oil, 08 gas, or oil and gas, respectively, in that category produced by the producer during the 09 calendar year, as adjusted under AS 43.55.170; a separate monthly production tax 10 value must be calculated for each of the categories for which a separate annual 11 production tax value is required to be calculated under (1) of this subsection. 12  * Sec. 28. AS 43.55.890 is amended to read: 13 Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary 14 provision of AS 40.25.100, and regardless of whether the information is considered 15 under AS 43.05.230(e) to constitute statistics classified to prevent the identification of 16 particular returns or reports, the department may publish the following information 17 under this chapter, if aggregated among three or more producers or explorers, 18 showing, by month or calendar year and by lease or property, unit, or area of the state: 19 (1) the amount of oil or gas production; 20 (2) the amount of taxes levied under this chapter or paid under this 21 chapter; 22 (3) the effective tax rates under this chapter; 23 (4) the gross value of oil or gas at the point of production; 24 (5) the transportation costs for oil or gas; 25 (6) qualified capital expenditures, as defined in AS 43.55.023; 26 (7) exploration expenditures under AS 43.55.025; 27 (8) production tax values of oil or gas under AS 43.55.160; 28 (9) lease expenditures under AS 43.55.165; 29 (10) adjustments to lease expenditures under AS 43.55.170; 30 (11) tax credits applicable or potentially applicable against taxes levied 31 by this chapter; the information relating to tax credits under this paragraph, to  01 the extent the information is available to the department, must include the  02 statutory authority for each type of credit taken, the amount of credits taken  03 under each statute authorizing a tax credit, and whether the credit is for an  04 expenditure related to oil or gas exploration, development, or production,  05 including the drilling of wells; performing work on existing wells; conducting  06 geological or geophysical exploration; acquiring, constructing, or installing new  07 facilities or equipment; and maintaining, repairing, or replacing existing facilities  08 or equipment. 09  * Sec. 29. AS 43.56.160 is amended to read: 10 Sec. 43.56.160. Interest and penalty. When the tax levied by AS 43.56.010(a) 11 becomes delinquent, a penalty of 10 percent shall be added. Interest on the delinquent 12 taxes, exclusive of penalty, shall be assessed at the rate specified in AS 43.05.225(1)  13 [A RATE OF EIGHT PERCENT A YEAR]. 14  * Sec. 30. AS 43.77.020(d) is amended to read: 15 (d) A person subject to the tax under this chapter shall make quarterly 16 payments of the tax estimated to be due for the year, as required under regulations 17 adopted by the department. A taxpayer will be subject to an estimated tax penalty, 18 determined by applying the interest rate specified in AS 43.05.225(1) [AS 43.05.225] 19 to the underpayment for each quarter, unless the taxpayer makes estimated tax 20 payments in equal installments that total either 21 (1) at least 90 percent of the taxpayer's tax liability under this chapter 22 for the tax year; or 23 (2) at least 100 percent of the taxpayer's tax liability under this chapter 24 for the prior tax year. 25  * Sec. 31. AS 43.90.430 is amended to read: 26 Sec. 43.90.430. Interest. When a payment due to the state under this chapter 27 becomes delinquent, the payment bears interest at the rate applicable to a delinquent 28 tax under AS 43.05.225(1) [AS 43.05.225]. 29  * Sec. 32. AS 43.55.023(m) is repealed. 30 * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to 31 read: 01 APPLICABILITY. (a) Sections 11 and 12 of this Act apply to expenditures incurred 02 after December 31, 2010. 03 (b) Sections 15 - 17, 21, and 24 of this Act apply to expenditures incurred after 04 December 31, 2011. 05 (c) Sections 6 - 9 and 27 of this Act apply to oil and gas produced after December 31, 06 2012. 07 * Sec. 34. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 TRANSITION: REGULATIONS. The Department of Revenue may adopt regulations 10 to implement this Act. The regulations take effect under AS 44.62 (Administrative Procedure 11 Act), but not before the effective date of the provision of this Act implemented by the 12 regulation. 13  * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 RETROACTIVITY. Sections 11 and 12 of this Act are retroactive to January 1, 2011. 16  * Sec. 36. Sections 14 - 17, 21, 24 - 28, 32, and 33(b) of this Act take effect January 1, 17 2012. 18  * Sec. 37. Sections 6 - 9, 27, and 33(c) of this Act take effect January 1, 2013. 19  * Sec. 38. Sections 11, 12, 33(a), and 35 of this Act take effect immediately under 20 AS 01.10.070(c). 21  * Sec. 39. Except as provided in secs. 36 - 38 of this Act, this Act takes effect July 1, 2011.