00 CS FOR HOUSE BILL NO. 110(FIN) 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 the oil 04 and gas production tax; relating to oil and gas production tax credits, including 05 qualified capital credits for exploration, development, and production; relating to 06 certain additional nontransferable oil and gas production tax credits; relating to the 07 disclosure of certain tax information; making conforming amendments; and providing 08 for an effective date." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10  * Section 1. AS 05.15.095(c) is amended to read: 11 (c) A delinquent fee bears interest at the rate set by AS 43.05.225(2) 12 [AS 43.05.225]. 01  * Sec. 2. AS 34.45.470(a) is amended to read: 02 (a) A person who fails to pay or deliver property within the time prescribed by 03 this chapter may be required to pay to the department interest at the annual rate 04 calculated under AS 43.05.225(2) [AS 43.05.225] on the property or the value of it 05 from the date the property should have been paid or delivered. 06  * Sec. 3. AS 43.05.225 is amended to read: 07 Sec. 43.05.225. Interest. Unless otherwise provided, 08 (1) when a tax levied in this title becomes delinquent, it bears interest 09 in a calendar quarter at the rate of three [FIVE] percentage points above the annual 10 rate charged member banks for advances by the 12th Federal Reserve District as of the 11 first day of that calendar quarter, or at the annual rate of 11 percent, whichever is 12 lesser [GREATER], compounded quarterly as of the last day of that quarter; 13 (2) the interest rate is 12 percent a year for 14 (A) delinquent fees payable under AS 05.15.095(c); and  15 (B) [REPEALED AND 16 (C)] unclaimed property that is not timely paid or delivered, as 17 allowed by AS 34.45.470(a). 18  * Sec. 4. AS 43.20.046(i) is amended to read: 19 (i) The issuance of a refund under this section does not limit the department's 20 ability to later audit or adjust the claim if the department determines, as a result of the 21 audit, that the person that claimed the credit was not entitled to the amount of the 22 credit. The tax liability of the person receiving the credit under this chapter is 23 increased by the amount of the credit that exceeds that to which the person was 24 entitled. If the tax liability is increased under this subsection, the increase bears 25 interest under AS 43.05.225(1) [AS 43.05.225] from the date the refund was issued. 26  * Sec. 5. AS 43.50.570 is amended to read: 27 Sec. 43.50.570. Interest. A licensee who fails to pay an amount due for the 28 purchase of stamps within the time required 29 (1) is considered to have failed to pay the cigarette taxes due under this 30 chapter; and 31 (2) shall pay interest at the rate established under AS 43.05.225(1) 01 [AS 43.05.225] from the date on which the amount became due until the date of 02 payment. 03  * Sec. 6. AS 43.55.011(e) is amended to read: 04 (e) There is levied on the producer of oil or gas a tax for all oil and gas 05 produced each calendar year from each lease or property in the state, less any oil and 06 gas the ownership or right to which is exempt from taxation or constitutes a 07 landowner's royalty interest. Except as otherwise provided under (f), (j), (k), and (o) of 08 this section, the tax is equal to the sum of 09 [(1)] the annual production tax value of the taxable oil and gas  10 (1) produced from a lease or property not described in (2) of this  11 subsection as calculated under AS 43.55.160(a)(1) multiplied by 25 percent, and the  12 sum, over all months of the calendar year, of the tax amounts determined under  13 (g)(1) of this section; and 14 (2) produced during the first seven consecutive years after the  15 start of sustained production or produced during the first seven years after the  16 effective date of this bill section, whichever is later, from a lease or property  17 containing land that was not or previously had not been within a unit or in  18 commercial production as of December 31, 2008, as calculated under  19 AS 43.55.160(a)(1) multiplied by 15 percent, and the sum, over all months of the 20 calendar year, of the tax amounts determined under (g)(2) [(g)] of this section; in this  21 paragraph, "sustained production" has the meaning given in AS 43.55.025(l). 22 * Sec. 7. AS 43.55.011(g) is repealed and reenacted to read: 23 (g) For each month of the calendar year for which the producer's average 24 monthly production tax value under AS 43.55.160(a)(2) for each BTU equivalent 25 barrel of the taxable oil and gas is more than $30, the amount of tax for purposes 26 (1) of (e)(1) of this section is determined by multiplying the monthly 27 production tax value of the taxable oil and gas produced during the month by the 28 following tax rates, as applicable: 29 (A) if the producer's average monthly production tax value of a 30 BTU equivalent barrel of the taxable oil and gas for the month is not more than 31 $42.50, the tax rate is 2.5 percent of the difference between that average 01 monthly production tax value of a BTU equivalent barrel and $30; 02 (B) if the producer's average monthly production tax value of a 03 BTU equivalent barrel of the taxable oil and gas for the month is more than 04 $42.50 but not more than $55, the tax rates are 05 (i) 2.5 percent on the first $12.50 of monthly production 06 tax value for each BTU equivalent barrel that is greater than $30; and 07 (ii) 7.5 percent of the monthly production tax value for 08 each BTU equivalent barrel that is greater than $42.50; 09 (C) if the producer's average monthly production tax value of a 10 BTU equivalent barrel of the taxable oil and gas for the month is more than 11 $55 but not more than $67.50, the tax rates are 12 (i) 2.5 percent on the first $12.50 of monthly production 13 tax value for each BTU equivalent barrel that is greater than $30; 14 (ii) 7.5 percent of the next higher $12.50 of monthly 15 production tax value for each BTU equivalent barrel; and 16 (iii) 12.5 percent of the monthly production tax value 17 for each BTU equivalent barrel that is greater than $55; 18 (D) if the producer's average monthly production tax value of a 19 BTU equivalent barrel of the taxable oil and gas for the month is more than 20 $67.50 but not more than $80, the tax rates are 21 (i) 2.5 percent on the first $12.50 of monthly production 22 tax value for each BTU equivalent barrel that is greater than $30; 23 (ii) 7.5 percent of the next higher $12.50 of monthly 24 production tax value for each BTU equivalent barrel; 25 (iii) 12.5 percent of the next higher $12.50 of monthly 26 production tax value for each BTU equivalent barrel; 27 (iv) 17.5 percent of the monthly production tax value 28 for each BTU equivalent barrel that is greater than $67.50; 29 (E) if the producer's average monthly production tax value of a 30 BTU equivalent barrel of the taxable oil and gas for the month is more than 31 $80 but not more than $92.50, the tax rates are 01 (i) 2.5 percent on the first $12.50 of monthly production 02 tax value for each BTU equivalent barrel that is greater than $30; 03 (ii) 7.5 percent of the next higher $12.50 of monthly 04 production tax value for each BTU equivalent barrel; 05 (iii) 12.5 percent of the next higher $12.50 of monthly 06 production tax value for each BTU equivalent barrel; 07 (iv) 17.5 percent of the next higher $12.50 of monthly 08 production tax value for each BTU equivalent barrel; and 09 (v) 22.5 percent of the monthly production tax value for 10 each BTU equivalent barrel that is greater than $80; 11 (F) if the producer's average monthly production tax value of a 12 BTU equivalent barrel of the taxable oil and gas for the month is more than 13 $92.50, the tax rates are 14 (i) 2.5 percent on the first $12.50 of monthly production 15 tax value for each BTU equivalent barrel that is greater than $30; 16 (ii) 7.5 percent of the next higher $12.50 of monthly 17 production tax value for each BTU equivalent barrel; 18 (iii) 12.5 percent of the next higher $12.50 of monthly 19 production tax value for each BTU equivalent barrel; 20 (iv) 17.5 percent of the next higher $12.50 of monthly 21 production tax value for each BTU equivalent barrel; 22 (v) 22.5 percent of the next higher $12.50 of monthly 23 production tax value for each BTU equivalent barrel; and 24 (vi) 25 percent of the monthly production tax value for 25 each BTU equivalent barrel that is greater than $92.50; 26 (2) of (e)(2) of this section is determined by multiplying the monthly 27 production tax value of the taxable oil and gas produced during the month by the 28 following tax rates, as applicable: 29 (A) if the producer's average monthly production tax value of a 30 BTU equivalent barrel of the taxable oil and gas for the month is not more than 31 $42.50, the tax rate is 2.5 percent of the difference between that average 01 monthly production tax value of a BTU equivalent barrel and $30; 02 (B) if the producer's average monthly production tax value of a 03 BTU equivalent barrel of the taxable oil and gas for the month is more than 04 $42.50 but not more than $55, the tax rates are 05 (i) 2.5 percent on the first $12.50 of monthly production 06 tax value for each BTU equivalent barrel that is greater than $30; and 07 (ii) 7.5 percent of the monthly production tax value for 08 each BTU equivalent barrel that is greater than $42.50; 09 (C) if the producer's average monthly production tax value of a 10 BTU equivalent barrel of the taxable oil and gas for the month is more than 11 $55 but not more than $67.50, the tax rates are 12 (i) 2.5 percent on the first $12.50 of monthly production 13 tax value for each BTU equivalent barrel that is greater than $30; 14 (ii) 7.5 percent of the next higher $12.50 of monthly 15 production tax value for each BTU equivalent barrel; and 16 (iii) 12.5 percent of the monthly production tax value 17 for each BTU equivalent barrel that is greater than $55; 18 (D) if the producer's average monthly production tax value of a 19 BTU equivalent barrel of the taxable oil and gas for the month is more than 20 $67.50 but not more than $80, the tax rates are 21 (i) 2.5 percent on the first $12.50 of monthly production 22 tax value for each BTU equivalent barrel that is greater than $30; 23 (ii) 7.5 percent of the next higher $12.50 of monthly 24 production tax value for each BTU equivalent barrel; 25 (iii) 12.5 percent of the next higher $12.50 of monthly 26 production tax value for each BTU equivalent barrel; 27 (iv) 17.5 percent of the monthly production tax value 28 for each BTU equivalent barrel that is greater than $67.50; 29 (E) if the producer's average monthly production tax value of a 30 BTU equivalent barrel of the taxable oil and gas for the month is more than 31 $80 but not more than $92.50, the tax rates are 01 (i) 2.5 percent on the first $12.50 of monthly production 02 tax value for each BTU equivalent barrel that is greater than $30; 03 (ii) 7.5 percent of the next higher $12.50 of monthly 04 production tax value for each BTU equivalent barrel; 05 (iii) 12.5 percent of the next higher $12.50 of monthly 06 production tax value for each BTU equivalent barrel; 07 (iv) 17.5 percent of the next higher $12.50 of monthly 08 production tax value for each BTU equivalent barrel; and 09 (v) 22.5 percent of the monthly production tax value for 10 each BTU equivalent barrel that is greater than $80; 11 (F) if the producer's average monthly production tax value of a 12 BTU equivalent barrel of the taxable oil and gas for the month is more than 13 $92.50, the tax rates are 14 (i) 2.5 percent on the first $12.50 of monthly production 15 tax value for each BTU equivalent barrel that is greater than $30; 16 (ii) 7.5 percent of the next higher $12.50 of monthly 17 production tax value for each BTU equivalent barrel; 18 (iii) 12.5 percent of the next higher $12.50 of monthly 19 production tax value for each BTU equivalent barrel; 20 (iv) 17.5 percent of the next higher $12.50 of monthly 21 production tax value for each BTU equivalent barrel; 22 (v) 22.5 percent of the next higher $12.50 of monthly 23 production tax value for each BTU equivalent barrel; and 24 (vi) 25 percent of the monthly production tax value for 25 each BTU equivalent barrel that is greater than $92.50. 26  * Sec. 8. AS 43.55.020(a) is amended to read: 27 (a) For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i) 28 shall pay the tax as follows: 29 (1) an installment payment of the estimated tax levied by 30 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 31 month of the calendar year on the last day of the following month; except as otherwise 01 provided under (2) of this subsection, the amount of the installment payment is the 02 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 03 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 04 of the installment payment may not be less than zero: 05 (A) for oil and gas produced from leases or properties in the 06 state outside the Cook Inlet sedimentary basin but not subject to 07 AS 43.55.011(o), other than leases or properties subject to AS 43.55.011(f), the 08 greater of 09 (i) zero; or 10 (ii) the applicable tax rates in AS 43.55.011(e), as  11 applicable, and 43.55.011(g), as applicable, applied to [SUM OF 25 12 PERCENT AND THE TAX RATE CALCULATED FOR THE 13 MONTH UNDER AS 43.55.011(g) MULTIPLIED BY] the remainder 14 obtained by subtracting 1/12 of the producer's adjusted lease 15 expenditures for the calendar year of production under AS 43.55.165 16 and 43.55.170 that are deductible for the leases or properties under 17 AS 43.55.160 from the gross value at the point of production of the oil 18 and gas produced from the leases or properties during the month for 19 which the installment payment is calculated; 20 (B) for oil and gas produced from leases or properties subject 21 to AS 43.55.011(f), the greatest of 22 (i) zero; 23 (ii) zero percent, one percent, two percent, three 24 percent, or four percent, as applicable, of the gross value at the point of 25 production of the oil and gas produced from all leases or properties 26 during the month for which the installment payment is calculated; or 27 (iii) the applicable tax rates in AS 43.55.011(e), as  28 applicable, and 43.55.011(g), as applicable, applied to [SUM OF 25 29 PERCENT AND THE TAX RATE CALCULATED FOR THE 30 MONTH UNDER AS 43.55.011(g) MULTIPLIED BY] the remainder 31 obtained by subtracting 1/12 of the producer's adjusted lease 01 expenditures for the calendar year of production under AS 43.55.165 02 and 43.55.170 that are deductible for those leases or properties under 03 AS 43.55.160 from the gross value at the point of production of the oil 04 and gas produced from those leases or properties during the month for 05 which the installment payment is calculated; 06 (C) for oil and gas produced from each lease or property 07 subject to AS 43.55.011(j), (k), or (o), the greater of 08 (i) zero; or 09 (ii) the applicable tax rates in AS 43.55.011(e), as  10 applicable, and 43.55.011(g), as applicable, applied to [SUM OF 25 11 PERCENT AND THE TAX RATE CALCULATED FOR THE 12 MONTH UNDER AS 43.55.011(g) MULTIPLIED BY] the remainder 13 obtained by subtracting 1/12 of the producer's adjusted lease 14 expenditures for the calendar year of production under AS 43.55.165 15 and 43.55.170 that are deductible under AS 43.55.160 for oil or gas, 16 respectively, produced from the lease or property from the gross value 17 at the point of production of the oil or gas, respectively, produced from 18 the lease or property during the month for which the installment 19 payment is calculated; 20 (2) an amount calculated under (1)(C) of this subsection for oil or gas 21 produced from a lease or property subject to AS 43.55.011(j), (k), or (o) may not 22 exceed the product obtained by carrying out the calculation set out in 23 AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas or set out in 24 AS 43.55.011(k)(1) or (2), as applicable, for oil, but substituting in 25 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 26 gas produced during the month for the amount of taxable gas produced during the 27 calendar year and substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the 28 amount of taxable oil produced during the month for the amount of taxable oil 29 produced during the calendar year; 30 (3) an installment payment of the estimated tax levied by 31 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 01 on the last day of the following month; the amount of the installment payment is the 02 sum of 03 (A) the applicable tax rate for oil provided under 04 AS 43.55.011(i), multiplied by the gross value at the point of production of the 05 oil taxable under AS 43.55.011(i) and produced from the lease or property 06 during the month; and 07 (B) the applicable tax rate for gas provided under 08 AS 43.55.011(i), multiplied by the gross value at the point of production of the 09 gas taxable under AS 43.55.011(i) and produced from the lease or property 10 during the month; 11 (4) any amount of tax levied by AS 43.55.011(e) or (i), net of any 12 credits applied as allowed by law, that exceeds the total of the amounts due as 13 installment payments of estimated tax is due on March 31 of the year following the 14 calendar year of production. 15  * Sec. 9. AS 43.55.020(g) is amended to read: 16 (g) Notwithstanding any contrary provision of AS 43.05.225, an unpaid 17 amount of an installment payment required under (a)(1) - (3) of this section that is not 18 paid when due bears interest (1) at the rate provided for an underpayment under 26 19 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date 20 the installment payment is due until March 31 following the calendar year of 21 production, and (2) as provided for a delinquent tax under AS 43.05.225(1) 22 [AS 43.05.225] after that March 31. Interest accrued under (1) of this subsection that 23 remains unpaid after that March 31 is treated as an addition to tax that bears interest 24 under (2) of this subsection. An unpaid amount of tax due under (a)(4) of this section 25 that is not paid when due bears interest as provided for a delinquent tax under 26 AS 43.05.225(1) [AS 43.05.225]. 27  * Sec. 10. AS 43.55.023(a) is amended to read: 28 (a) A producer or explorer may take a tax credit for a qualified capital 29 expenditure as follows: 30 (1) notwithstanding that a qualified capital expenditure may be a 31 deductible lease expenditure for purposes of calculating the production tax value of oil 01 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under 02 AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or 03 explorer that incurs a qualified capital expenditure may also elect to apply a tax credit 04 against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that 05 expenditure; [HOWEVER, NOT MORE THAN HALF OF THE TAX CREDIT MAY 06 BE APPLIED FOR A SINGLE CALENDAR YEAR;] 07 (2) a producer or explorer may take a credit for a qualified capital 08 expenditure incurred in connection with geological or geophysical exploration or in 09 connection with an exploration well only if the producer or explorer 10 (A) agrees, in writing, to the applicable provisions of 11 AS 43.55.025(f)(2); 12 (B) submits to the Department of Natural Resources all data 13 that would be required to be submitted under AS 43.55.025(f)(2). 14  * Sec. 11. AS 43.55.023(d) is amended to read: 15 (d) Except as limited by (i) of this section, a person that is entitled to take a tax 16 credit under this section that wishes to transfer the unused credit to another person or 17 obtain a cash payment under AS 43.55.028 may apply to the department for a 18 transferable tax credit certificate [CERTIFICATES]. An application under this 19 subsection must be in a form prescribed by the department and must include 20 supporting information and documentation that the department reasonably requires. 21 The department shall grant or deny an application, or grant an application as to a lesser 22 amount than that claimed and deny it as to the excess, not later than 120 days after the 23 latest of (1) March 31 of the year following the calendar year in which the qualified 24 capital expenditure, well lease expenditure, or carried-forward annual loss for which 25 the credit is claimed was incurred; (2) the date the statement required under 26 AS 43.55.030(a) or (e) was filed for the calendar year in which the qualified capital 27 expenditure, well lease expenditure, or carried-forward annual loss for which the 28 credit is claimed was incurred; or (3) the date the application was received by the 29 department. If, based on the information then available to it, the department is 30 reasonably satisfied that the applicant is entitled to a credit, the department shall issue 31 the applicant a [TWO] transferable tax credit certificate for [CERTIFICATES, 01 EACH FOR HALF OF] the amount of the credit. [THE CREDIT SHOWN ON ONE 02 OF THE TWO CERTIFICATES IS AVAILABLE FOR IMMEDIATE USE. THE 03 CREDIT SHOWN ON THE SECOND OF THE TWO CERTIFICATES MAY NOT 04 BE APPLIED AGAINST A TAX FOR A CALENDAR YEAR EARLIER THAN 05 THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH 06 THE CERTIFICATE IS ISSUED, AND THE CERTIFICATE MUST CONTAIN A 07 CONSPICUOUS STATEMENT TO THAT EFFECT.] A certificate issued under this 08 subsection does not expire. 09  * Sec. 12. AS 43.55.023(g) is amended to read: 10 (g) The issuance of a transferable tax credit certificate under (d) of this  11 section or former (m) of this section or the purchase of a certificate under 12 AS 43.55.028 does not limit the department's ability to later audit a tax credit claim to 13 which the certificate relates or to adjust the claim if the department determines, as a 14 result of the audit, that the applicant was not entitled to the amount of the credit for 15 which the certificate was issued. The tax liability of the applicant under 16 AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased by the amount of the credit 17 that exceeds that to which the applicant was entitled, or the applicant's available valid 18 outstanding credits applicable against the tax levied by AS 43.55.011(e) are reduced 19 by that amount. If the applicant's tax liability is increased under this subsection, the 20 increase bears interest under AS 43.05.225 from the date the transferable tax credit 21 certificate was issued. For purposes of this subsection, an applicant that is an explorer 22 is considered a producer subject to the tax levied by AS 43.55.011(e). 23  * Sec. 13. AS 43.55.023(g) is amended to read: 24 (g) The issuance of a transferable tax credit certificate under (d) of this section 25 or former (m) of this section or the purchase of a certificate under AS 43.55.028 does 26 not limit the department's ability to later audit a tax credit claim to which the 27 certificate relates or to adjust the claim if the department determines, as a result of the 28 audit, that the applicant was not entitled to the amount of the credit for which the 29 certificate was issued. The tax liability of the applicant under AS 43.55.011(e) and 30 43.55.017 - 43.55.180 is increased by the amount of the credit that exceeds that to 31 which the applicant was entitled, or the applicant's available valid outstanding credits 01 applicable against the tax levied by AS 43.55.011(e) are reduced by that amount. If the 02 applicant's tax liability is increased under this subsection, the increase bears interest 03 under AS 43.05.225(1) [AS 43.05.225] from the date the transferable tax credit 04 certificate was issued. For purposes of this subsection, an applicant that is an explorer 05 is considered a producer subject to the tax levied by AS 43.55.011(e). 06  * Sec. 14. AS 43.55.023(l) is amended to read: 07 (l) A producer or explorer may apply for a tax credit for a well lease 08 expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH 09 LATITUDE] after December 31, 2010, and before January 1, 2021 [JUNE 30, 10 2010], as follows: 11 (1) notwithstanding that a well lease expenditure [INCURRED IN 12 THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] may be a deductible 13 lease expenditure for purposes of calculating the production tax value of oil and gas 14 under AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this 15 section, AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer 16 or explorer that incurs a well lease expenditure [IN THE STATE SOUTH OF 68 17 DEGREES NORTH LATITUDE] may elect to apply a tax credit against a tax levied 18 by AS 43.55.011(e) in the amount of 40 percent of that expenditure; [A TAX CREDIT 19 UNDER THIS PARAGRAPH MAY BE APPLIED FOR A SINGLE CALENDAR 20 YEAR;] 21 (2) a producer or explorer may take a credit for a well lease 22 expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH 23 LATITUDE] in connection with geological or geophysical exploration or in 24 connection with an exploration well only if the producer or explorer 25 (A) agrees, in writing, to the applicable provisions of 26 AS 43.55.025(f)(2); and 27 (B) submits to the Department of Natural Resources all data 28 that would be required to be submitted under AS 43.55.025(f)(2). 29  * Sec. 15. AS 43.55.023(l) is amended to read: 30 (l) A producer or explorer may apply for a tax credit for a well lease 31 expenditure incurred in the state south of 68 degrees North latitude after 01 December 31, 2020 [DECEMBER 31, 2010, AND BEFORE JANUARY 1, 2021], as 02 follows: 03 (1) notwithstanding that a well lease expenditure incurred in the state  04 south of 68 degrees North latitude may be a deductible lease expenditure for 05 purposes of calculating the production tax value of oil and gas under AS 43.55.160(a), 06 unless a credit for that expenditure is taken under (a) of this section, AS 38.05.180(i), 07 AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or explorer that incurs a 08 well lease expenditure in the state south of 68 degrees North latitude may elect to 09 apply a tax credit against a tax levied by AS 43.55.011(e) in the amount of 40 percent 10 of that expenditure; 11 (2) a producer or explorer may take a credit for a well lease 12 expenditure incurred in the state south of 68 degrees north latitude in connection 13 with geological or geophysical exploration or in connection with an exploration well 14 only if the producer or explorer 15 (A) agrees, in writing, to the applicable provisions of 16 AS 43.55.025(f)(2); and 17 (B) submits to the Department of Natural Resources all data 18 that would be required to be submitted under AS 43.55.025(f)(2). 19  * Sec. 16. AS 43.55.023(n) is amended to read: 20 (n) For the purposes of (l) [AND (m)] of this section, a well lease expenditure 21 [INCURRED IN THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] is a 22 lease expenditure that is 23 (1) directly related to an exploration well, a stratigraphic test well, a 24 producing well, or an injection well other than a disposal well, [LOCATED IN THE 25 STATE SOUTH OF 68 DEGREES NORTH LATITUDE,] if the expenditure is a 26 qualified capital expenditure and an intangible drilling and development cost 27 authorized under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R. 28 1.612-4, regardless of the elections made under 26 U.S.C. 263(c); in this paragraph, an 29 expenditure directly related to a well includes an expenditure for well sidetracking, 30 well deepening, well completion or recompletion, or well workover, regardless of 31 whether the well is or has been a producing well; or 01 (2) an expense for seismic work conducted within the boundaries of a 02 production or exploration unit. 03  * Sec. 17. AS 43.55.023(n) is amended to read: 04 (n) For the purposes of (l) of this section, a well lease expenditure incurred in  05 the state south of 68 degrees North latitude is a lease expenditure that is 06 (1) directly related to an exploration well, a stratigraphic test well, a 07 producing well, or an injection well other than a disposal well, located in the state  08 south of 68 degrees North latitude, if the expenditure is a qualified capital 09 expenditure and an intangible drilling and development cost authorized under 26 10 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R. 1.612-4, regardless of the 11 elections made under 26 U.S.C. 263(c); in this paragraph, an expenditure directly 12 related to a well includes an expenditure for well sidetracking, well deepening, well 13 completion or recompletion, or well workover, regardless of whether the well is or has 14 been a producing well; or 15 (2) an expense for seismic work conducted within the boundaries of a 16 production or exploration unit. 17  * Sec. 18. AS 43.55.024(b) is amended to read: 18 (b) A producer may not take a tax credit under (a) of this section for any 19 calendar year after the later of 20 (1) 2021 [2016]; or 21 (2) the ninth calendar year after the calendar year during which the 22 producer first has commercial oil or gas production before May 1, 2021 [2016], from 23 at least one lease or property in the state outside the Cook Inlet sedimentary basin, no 24 part of which is north of 68 degrees North latitude, if the producer did not have 25 commercial oil or gas production from a lease or property in the state outside the Cook 26 Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, before 27 April 1, 2006. 28  * Sec. 19. AS 43.55.024(d) is amended to read: 29 (d) A producer may not take a tax credit under (c) of this section for any 30 calendar year after the later of 31 (1) 2021 [2016]; or 01 (2) if the producer did not have commercial oil or gas production from 02 a lease or property in the state before April 1, 2006, the ninth calendar year after the 03 calendar year during which the producer first has commercial oil or gas production 04 before May 1, 2021 [2016], from at least one lease or property in the state. 05  * Sec. 20. AS 43.55.025(b) is amended to read: 06 (b) To qualify for the production tax credit under (a) of this section, an 07 exploration expenditure must be incurred for work performed after June 30, 2008, and 08 before July 1, 2021 [2016], and 09 (1) may be for seismic or other geophysical exploration costs not 10 connected with a specific well; 11 (2) if for an exploration well, 12 (A) must be incurred by an explorer that holds an interest in the 13 exploration well for which the production tax credit is claimed; 14 (B) may be for either a well that encounters an oil or gas 15 deposit or a dry hole; 16 (C) must be for a well that has been completed, suspended, or 17 abandoned at the time the explorer claims the tax credit under (f) of this 18 section; and 19 (D) must be for goods, services, or rentals of personal property 20 reasonably required for the surface preparation, drilling, casing, cementing, 21 and logging of an exploration well, and, in the case of a dry hole, for the 22 expenses required for abandonment if the well is abandoned within 18 months 23 after the date the well was spudded; 24 (3) may not be for administration, supervision, engineering, or lease 25 operating costs; geological or management costs; community relations or 26 environmental costs; bonuses, taxes, or other payments to governments related to the 27 well; costs, including repairs and replacements, arising from or associated with fraud, 28 wilful misconduct, gross negligence, criminal negligence, or violation of law, 29 including a violation of 33 U.S.C. 1319(c)(1) or 1321(b)(3) (Clean Water Act); or 30 other costs that are generally recognized as indirect costs or financing costs; and 31 (4) may not be incurred for an exploration well or seismic exploration 01 that is included in a plan of exploration or a plan of development for any unit before 02 May 14, 2003. 03  * Sec. 21. AS 43.55.025(k) is amended to read: 04 (k) Subject to the terms and conditions of this section, if a claim is filed under 05 (f)(1) of this section before January 1, 2021 [2016], a credit against the production tax 06 levied by AS 43.55.011(e) is allowed in an amount equal to five percent of an eligible 07 expenditure under this subsection incurred for seismic exploration performed before 08 July 1, 2003. To be eligible under this subsection, an expenditure must 09 (1) have been for seismic exploration that 10 (A) obtained data that the commissioner of natural resources 11 considers to be in the best interest of the state to acquire for public distribution; 12 and 13 (B) was conducted outside the boundaries of a production unit; 14 however, the amount of the expenditure that is otherwise eligible under this 15 section is reduced proportionately by the portion of the seismic exploration 16 activity that crossed into a production unit; and 17 (2) qualify under (b)(3) of this section. 18  * Sec. 22. AS 43.55.028(e) is amended to read: 19 (e) The department, on the written application of a person to whom a 20 transferable tax credit certificate has been issued under AS 43.55.023(d) or former  21 AS 43.55.023(m) [(m)] or to whom a production tax credit certificate has been issued 22 under AS 43.55.025(f), may use available money in the oil and gas tax credit fund to 23 purchase, in whole or in part, the certificate if the department finds that 24 (1) the calendar year of the purchase is not earlier than the first 25 calendar year for which the credit shown on the certificate would otherwise be allowed 26 to be applied against a tax; 27 (2) [REPEALED 28 (3) REPEALED 29 (4)] the applicant does not have an outstanding liability to the state for 30 unpaid delinquent taxes under this title; 31 (3) [(5)] the applicant's total tax liability under AS 43.55.011(e), after 01 application of all available tax credits, for the calendar year in which the application is 02 made is zero; 03 (4) [(6)] the applicant's average daily production of oil and gas taxable 04 under AS 43.55.011(e) during the calendar year preceding the calendar year in which 05 the application is made was not more than 50,000 BTU equivalent barrels; and 06 (5) [(7)] the purchase is consistent with this section and regulations 07 adopted under this section. 08  * Sec. 23. AS 43.55.028(g) is amended to read: 09 (g) The department may adopt regulations to carry out the purposes of this 10 section, including standards and procedures to allocate available money among 11 applications for purchases under this chapter and claims for refunds under 12 AS 43.20.046 when the total amount of the applications for purchase and claims for 13 refund exceed the amount of available money in the fund. The regulations adopted by 14 the department may not, when allocating available money in the fund under this 15 section, distinguish an application for the purchase of a credit certificate issued under 16 former AS 43.55.023(m) or a claim for refund under AS 43.20.046. 17  * Sec. 24. AS 43.55.890 is amended to read: 18 Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary 19 provision of AS 40.25.100, and regardless of whether the information is considered 20 under AS 43.05.230(e) to constitute statistics classified to prevent the identification of 21 particular returns or reports, the department may publish the following information 22 under this chapter, if aggregated among three or more producers or explorers, 23 showing, by month or calendar year and by lease or property, unit, or area of the state: 24 (1) the amount of oil or gas production; 25 (2) the amount of taxes levied under this chapter or paid under this 26 chapter; 27 (3) the effective tax rates under this chapter; 28 (4) the gross value of oil or gas at the point of production; 29 (5) the transportation costs for oil or gas; 30 (6) qualified capital expenditures, as defined in AS 43.55.023; 31 (7) exploration expenditures under AS 43.55.025; 01 (8) production tax values of oil or gas under AS 43.55.160; 02 (9) lease expenditures under AS 43.55.165; 03 (10) adjustments to lease expenditures under AS 43.55.170; 04 (11) tax credits applicable or potentially applicable against taxes levied 05 by this chapter; the information relating to tax credits under this paragraph, to  06 the extent the information is available to the department, must include the  07 statutory authority for each type of credit taken, the amount of credits taken  08 under each statute authorizing a tax credit, and whether the credit is for an  09 expenditure related to oil or gas exploration, development, or production,  10 including the drilling of wells; performing work on existing wells; conducting  11 geological or geophysical exploration; acquiring, constructing, or installing new  12 facilities or equipment; and maintaining, repairing, or replacing existing facilities  13 or equipment. 14  * Sec. 25. AS 43.56.160 is amended to read: 15 Sec. 43.56.160. Interest and penalty. When the tax levied by AS 43.56.010(a) 16 becomes delinquent, a penalty of 10 percent shall be added. Interest on the delinquent 17 taxes, exclusive of penalty, shall be assessed at the rate specified in AS 43.05.225(1)  18 [A RATE OF EIGHT PERCENT A YEAR]. 19  * Sec. 26. AS 43.77.020(d) is amended to read: 20 (d) A person subject to the tax under this chapter shall make quarterly 21 payments of the tax estimated to be due for the year, as required under regulations 22 adopted by the department. A taxpayer will be subject to an estimated tax penalty, 23 determined by applying the interest rate specified in AS 43.05.225(1) [AS 43.05.225] 24 to the underpayment for each quarter, unless the taxpayer makes estimated tax 25 payments in equal installments that total either 26 (1) at least 90 percent of the taxpayer's tax liability under this chapter 27 for the tax year; or 28 (2) at least 100 percent of the taxpayer's tax liability under this chapter 29 for the prior tax year. 30  * Sec. 27. AS 43.90.430 is amended to read: 31 Sec. 43.90.430. Interest. When a payment due to the state under this chapter 01 becomes delinquent, the payment bears interest at the rate applicable to a delinquent 02 tax under AS 43.05.225(1) [AS 43.05.225]. 03  * Sec. 28. AS 43.55.023(m) is repealed. 04 * Sec. 29. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 APPLICABILITY. (a) Sections 10 - 12, 14, 16, and 28 of this Act apply to 07 expenditures incurred after December 31, 2010. 08 (b) Sections 6 - 8 of this Act apply to oil and gas produced after December 31, 2012. 09 (c) Sections 15 and 17 of this Act apply to expenditures incurred after December 31, 10 2020. 11 * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION: REGULATIONS. The Department of Revenue may adopt regulations 14 to implement this Act. The regulations take effect under AS 44.62 (Administrative Procedure 15 Act), but not before the effective date of the provision of this Act implemented by the 16 regulation. 17  * Sec. 31. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 RETROACTIVITY. Sections 10 - 12, 14, 16, 22, 23, and 28 of this Act are retroactive 20 to January 1, 2011. 21  * Sec. 32. Section 24 of this Act takes effect January 1, 2012. 22  * Sec. 33. Sections 6 - 8 and 29(b) of this Act take effect January 1, 2013. 23  * Sec. 34. Sections 15, 17, and 29(c) of this Act take effect January 1, 2021. 24  * Sec. 35. Sections 10 - 12, 14, 16, 22, 23, 28, 29(a), and 31 of this Act take effect 25 immediately under AS 01.10.070(c). 26  * Sec. 36. Except as provided in secs. 32 - 35 of this Act, this Act takes effect July 1, 2011.