00 SENATE BILL NO. 5002 01 "An Act relating to the exploration incentive credit; increasing the motor fuel tax; 02 increasing the taxes on cigarettes and tobacco products; taxing electronic smoking 03 products; adding a definition of 'electronic smoking product' and requiring labeling of 04 an electronic smoking product; increasing the excise tax on alcoholic beverages; relating 05 to exemptions from the mining license tax; removing the minimum and maximum 06 restrictions on the annual base fee for the reissuance or renewal of an entry permit or an 07 interim-use permit; increasing the mining license tax rate; relating to mining license 08 application, renewal, and fees; increasing the fisheries business tax and fishery resource 09 landing tax; relating to refunds to local governments; and providing for an effective 10 date." 11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 12  * Section 1. AS 16.43.160(c) is amended to read: 01 (c) The annual base fee for issuance or renewal of an entry permit or an 02 interim-use permit [MAY NOT BE LESS THAN $30 OR MORE THAN $3,000. THE 03 ANNUAL BASE FEE] must reasonably reflect the different rates of economic return 04 for different fisheries. In addition to the annual base fee established by the commission 05 under this subsection, a nonresident shall pay an annual nonresident surcharge for the 06 issuance or renewal of one or more entry permits or interim-use permits. The 07 commission shall establish the annual nonresident surcharge by regulation [AT AN 08 AMOUNT THAT IS AS CLOSE AS IS PRACTICABLE TO THE MAXIMUM 09 ALLOWED BY LAW]. 10 * Sec. 2. AS 27.30.030(a) is amended to read: 11 (a) In a tax year [OR ROYALTY PAYMENT PERIOD], subject to (c) of this 12 section and the respective limitations of this subsection, the person may apply the 13 credit, the taking of which was approved under AS 27.30.020(2), against [(1)] taxes 14 payable by the person 15 (1) [(A)] under AS 43.65; application of the credit under this 16 paragraph [SUBPARAGRAPH] may not exceed the lesser of 17 (A) [(i)] 50 percent of the person's tax liability under AS 43.65 18 for the tax year that is related to production from the mining operation at which 19 the exploration activities occurred, as shown under (b) of this section; or 20 (B) [(ii)] 50 percent of the person's total tax liability under 21 AS 43.65 for the tax year; 22 (2) [(B)] under AS 43.20; application of the credit under this 23 paragraph [SUBPARAGRAPH] may not exceed the lesser of 24 (A) [(i)] an amount equal to the amount determined under 25 (1)(A) [(A)(i)] of this subsection [PARAGRAPH]; or 26 (B) [(ii)] 50 percent of the person's total tax liability under 27 AS 43.20 for the tax year [; AND 28 (2) MINERAL PRODUCTION ROYALTY PAYMENTS PAYABLE 29 BY THE PERSON UNDER AS 38.05.135 - 38.05.160 AND 38.05.212 FOR 30 PRODUCTION FROM THE MINING OPERATION AT WHICH THE 31 EXPLORATION ACTIVITIES OCCURRED; APPLICATION OF THE CREDIT 01 UNDER THIS PARAGRAPH MAY NOT EXCEED 50 PERCENT OF THE 02 PERSON'S MINERAL PRODUCTION ROYALTY PAYMENT LIABILITY FROM 03 THE MINING OPERATION AT WHICH THE EXPLORATION ACTIVITIES 04 OCCURRED]. 05  * Sec. 3. AS 27.30.030(b) is amended to read: 06 (b) If the person applies the credit against the person's tax liability under 07 (a)(1)(A) or (a)(2)(A) [(a)(1)(A)(i) OR (a)(1)(B)(i)] of this section, the commissioner 08 of revenue shall disallow application of the credit under that provision unless the 09 person files with the person's tax return an accounting of the person's mining operation 10 activities for each mining operation that is included in the tax return and as to which 11 the credit is being applied. The accounting of mining operation activities required by 12 this subsection shall be made 13 (1) on a form prescribed by the Department of Revenue; on the form, 14 the person shall 15 (A) identify the mining operations for which the credit is 16 claimed; and 17 (B) set out the gross income attributable to the mining 18 operations and other information about the mining operations that the 19 Department of Revenue may require; 20 (2) without regard to an exemption to which the person may be entitled 21 under AS 43.65.010(a). 22  * Sec. 4. AS 27.30.040 is amended to read: 23 Sec. 27.30.040. Credit may be carried forward. Except as its application is 24 limited by AS 27.30.030 and 27.30.050, a portion of a credit that is not applied under 25 AS 27.30.030 during a tax year [OR ROYALTY PAYMENT PERIOD] may be 26 carried forward to and applied during a subsequent tax year [OR ROYALTY 27 PAYMENT PERIOD]. 28  * Sec. 5. AS 27.30.050 is amended to read: 29 Sec. 27.30.050. Limit on application of credit. An exploration incentive 30 credit for a mining operation may not exceed $20,000,000 and must be applied within 31 15 tax years [OR ROYALTY PAYMENT PERIODS] after the taking of the credit is 01 approved under AS 27.30.020(2), but the tax years [OR ROYALTY PAYMENT 02 PERIODS] in which the credit is applied need not be 03 (1) the tax year [OR ROYALTY PAYMENT PERIOD] in which the 04 person first incurs liability for payment of tax [OR ROYALTY] based on the person's 05 activity that is the basis of the claim of the exploration incentive credit; or 06 (2) consecutive periods. 07  * Sec. 6. AS 38.05.150(d) is amended to read: 08 (d) For the privilege of mining or extracting the coal in the land covered by 09 the lease, the lessee 10 (1) shall pay to the state the royalties specified in the lease; the 11 royalties shall be fixed before offering the lease, and shall be effective for a period of 12 not more than 20 years; the royalties shall be not less than five cents a ton of 2,000 13 pounds; [THE ROYALTY PAYMENT IS SUBJECT TO THE EXPLORATION 14 INCENTIVE CREDIT AUTHORIZED BY AS 27.30;] 15 (2) shall also pay an annual rental, payable at the date of the lease and 16 annually thereafter, on the land or coal deposits covered by the lease, at a rate fixed by 17 the commissioner before offering the lease; the annual rental shall be effective for a 18 period of not more than 20 years; the annual rental shall be not less than 25 cents an 19 acre for the first year of the lease, not less than 50 cents an acre for the second year, 20 third year, fourth year and fifth year, and not less than $1 an acre for each year 21 thereafter during the continuance of the lease; the rental for each year shall be credited 22 against the royalties as they accrue for that year; each lease shall provide that the 23 annual rental payment is subject to adjustment at intervals of not [NO] more than 20 24 years and adjustments shall be based on the current rates for properties similarly 25 situated. 26  * Sec. 7. AS 43.40.010(a) is amended to read: 27 (a) In addition to the surcharge levied under AS 43.40.005, there is levied a 28 tax of 16 [EIGHT] cents a gallon on all motor fuel sold or otherwise transferred within 29 the state, except that 30 (1) the tax on aviation gasoline is seven [FOUR AND SEVEN- 31 TENTHS] cents a gallon; 01 (2) the tax on motor fuel used in and on watercraft of all descriptions is 02 10 [FIVE] cents a gallon; 03 (3) the tax on all aviation fuel other than gasoline is six and one-half 04 [THREE AND TWO-TENTHS] cents a gallon; and 05 (4) the tax rate on motor fuel that is blended with alcohol is the same 06 tax rate a gallon as other motor fuel; however, in an area and during the months in 07 which fuel containing alcohol is required to be sold, transferred, or used in an effort to 08 attain air quality standards for carbon monoxide as required by federal or state law or 09 regulation, the tax rate on motor fuel that is blended with alcohol is six cents a gallon 10 less than the tax on other motor fuel not described in (1) - (3) of this subsection. 11  * Sec. 8. AS 43.40.010(b) is amended to read: 12 (b) In addition to the surcharge levied under AS 43.40.005, there is levied a 13 tax of 16 [EIGHT] cents a gallon on all motor fuel consumed by a user, except that 14 (1) the tax on aviation gasoline consumed is seven [FOUR AND 15 SEVEN-TENTHS] cents a gallon; 16 (2) the tax on motor fuel used in and on watercraft of all descriptions is 17 10 [FIVE] cents a gallon; 18 (3) the tax on all aviation fuel other than gasoline is six and one-half 19 [THREE AND TWO-TENTHS] cents a gallon; and 20 (4) the tax rate on motor fuel that is blended with alcohol is the same 21 tax rate a gallon as other motor fuel; however, in an area and during the months in 22 which fuel containing alcohol is required to be sold, transferred, or used in an effort to 23 attain air quality standards for carbon monoxide as required by federal or state law or 24 regulation, the tax rate on motor fuel that is blended with alcohol is six cents a gallon 25 less than the tax on other motor fuel not described in (1) - (3) of this subsection. 26  * Sec. 9. AS 43.40.030(a) is amended to read: 27 (a) Except as specified in AS 43.40.010(j), a person who uses motor fuel to 28 operate an internal combustion engine is entitled to a motor fuel tax refund of 12 [SIX] 29 cents a gallon if 30 (1) the tax on the motor fuel has been paid; 31 (2) the motor fuel is not aviation fuel, or motor fuel used in or on 01 watercraft; and 02 (3) the internal combustion engine is not used in or in conjunction with 03 a motor vehicle licensed to be operated on public ways. 04  * Sec. 10. AS 43.50.150(c) is amended to read:  05 (c) The department may enter into an agreement with a municipality that 06 imposes a tax on cigarettes, electronic smoking products, or other tobacco products 07 for the purpose of jointly auditing a person liable for a tax under AS 43.50.010 - 08 43.50.390 and the municipal tax on cigarettes, electronic smoking products, or other 09 tobacco products. 10  * Sec. 11. AS 43.50.170 is amended by adding a new paragraph to read: 11 (13) "electronic smoking product" has the meaning given in 12 AS 43.50.390. 13  * Sec. 12. AS 43.50.190(a) is amended to read: 14 (a) There is levied an excise tax on each cigarette imported or acquired in this 15 state of 112 [, 16 (1) AFTER DECEMBER 31, 2004, BUT BEFORE JULY 1, 2006, 42 17 MILLS; 18 (2) AFTER JUNE 30, 2006, BUT BEFORE JULY 1, 2007, 52 19 MILLS; 20 (3) AFTER JUNE 30, 2007, 62] mills. 21  * Sec. 13. AS 43.50.300 is amended to read: 22 Sec. 43.50.300. Excise tax levied. An excise tax is levied on tobacco products 23 in the state at the rate of 100 [75] percent of the wholesale price of the tobacco 24 products. The tax is levied when a person  25 (1) brings, or causes to be brought, a tobacco product into the state 26 from outside the state for sale; 27 (2) makes, manufactures, or fabricates a tobacco product in the state 28 for sale in the state; or 29 (3) ships or transports a tobacco product to a retailer in the state for 30 sale by the retailer. 31  * Sec. 14. AS 43.50 is amended by adding a new section to read: 01 Sec. 43.50.305. Electronic smoking products excise tax; labeling. (a) An 02 excise tax is levied on electronic smoking products in the state at the rate of 75 percent 03 of the wholesale price of the electronic smoking product. The tax is levied when a 04 person 05 (1) brings, or causes to be brought, an electronic smoking product into 06 the state from outside the state for sale; 07 (2) makes, manufactures, or fabricates an electronic smoking product 08 in the state for sale in the state; or 09 (3) ships or transports a tobacco product to a retailer in the state for 10 sale by the retailer. 11 (b) An electronic smoking product sold in the state that contains nicotine must 12 be prominently labeled "CONTAINS NICOTINE." 13  * Sec. 15. AS 43.50.310(b) is amended to read: 14 (b) The tax does not apply to a tobacco product or electronic smoking  15 product if the United States Constitution or other federal laws prohibit the levying of 16 the tax on the product by the state. 17  * Sec. 16. AS 43.50.320(a) is amended to read: 18 (a) Except as provided in (g) of this section, a person must be licensed by the 19 department if the person engages in business as a distributor for a tobacco product or  20 electronic smoking product that is subject to the tax. 21  * Sec. 17. AS 43.50.330(a) is amended to read: 22 (a) On or before the last day of each calendar month, a licensee shall file a 23 return with the department. The return must state the number or amount of tobacco 24 products or electronic smoking products sold by the licensee during the preceding 25 calendar month, the selling price of the tobacco products or electronic smoking  26 products, and the amount of tax imposed on the tobacco products or electronic  27 smoking products. 28  * Sec. 18. AS 43.50.335 is amended to read: 29 Sec. AS 43.50.335. Tax credits and refunds. The department shall adopt 30 procedures for a refund or credit to a licensee of the tax paid for tobacco products or  31 electronic smoking products that have become unfit for sale, are destroyed, or are 01 returned to the manufacturer for credit or replacement if the licensee provides proof 02 acceptable to the department that the tobacco products or electronic smoking  03 products have not been and will not be consumed in this state. 04  * Sec. 19. AS 43.50.340 is amended to read: 05 Sec. 43.50.340. Records. A licensee shall keep a complete and accurate record 06 of all tobacco products or electronic smoking products of the licensee subject to the 07 tax, including purchase prices, sales prices, the names and addresses of the sellers and 08 the purchasers, the dates of delivery, the quantities of tobacco products or electronic  09 smoking products, and the trade names and brands. Statements and records required 10 by this section must be in the form prescribed by the department, preserved for three 11 years, and available for inspection upon demand by the department. 12  * Sec. 20. AS 43.50.390(4) is amended to read: 13 (4) "tobacco product" 14 (A) means 15 (i) [(A)] a cigar; 16 (ii) [(B)] a cheroot; 17 (iii) [(C)] a stogie; 18 (iv) [(D)] a perique; 19 (v) [(E)] snuff and snuff flour; 20 (vi) [(F)] smoking tobacco, including granulated, plug- 21 cut, crimp-cut, ready-rubbed, and any form of tobacco suitable for 22 smoking in a pipe or cigarette; 23 (vii) [(G)] chewing tobacco, including cavendish, twist, 24 plug, scrap, and tobacco suitable for chewing; or 25 (viii) [(H)] an article or product made of tobacco or a 26 tobacco substitute, but not including a cigarette as defined in 27 AS 43.50.170; 28 (B) does not include a product that has been approved by  29 the United States Food and Drug Administration for sale as a smoking  30 cessation product, tobacco dependence product, or modified risk tobacco  31 product;  01  * Sec. 21. AS 43.50.390(5) is amended to read: 02 (5) "wholesale price" means, for a tobacco product or electronic  03 smoking product  04 (A) acquired from a manufacturer, the gross invoice 05 [ESTABLISHED] price, including all federal excise taxes, at [FOR] which 06 the [A] manufacturer sells a tobacco product or electronic smoking product 07 to an unaffiliated [A] distributor after a deduction of a trade discount or other 08 reduction received by the distributor [FOR QUANTITY OR CASH IF THE 09 MANUFACTURER'S ESTABLISHED PRICE IS ADEQUATELY 10 SUPPORTED BY BONA FIDE ARM'S LENGTH SALES AS 11 DETERMINED BY THE DEPARTMENT]; or 12 (B) not acquired from a manufacturer, the gross invoice 13 price, including all federal excise taxes, after a deduction of a trade  14 discount or other reduction [AS DETERMINED BY THE DEPARTMENT, 15 FOR WHICH TOBACCO PRODUCTS OF COMPARABLE RETAIL PRICE 16 ARE SOLD TO DISTRIBUTORS IN THE ORDINARY COURSE OF 17 TRADE IF THE MANUFACTURER'S ESTABLISHED PRICE DOES NOT 18 MEET THE STANDARDS OF (A) OF THIS PARAGRAPH]. 19  * Sec. 22. AS 43.50.390 is amended by adding a new paragraph to read: 20 (6) "electronic smoking product" 21 (A) means a component, solution, vapor product, or other 22 related product of an electronic cigarette, electronic cigar, electronic cigarillo, 23 electronic pipe, or other similar product that is manufactured and sold for the 24 purpose of being aerosolized to deliver nicotine to the person inhaling; if the 25 product is sold as a disposable integrated unit containing a power source and 26 delivery system, or as a kit containing a refillable electronic smoking system 27 and power source, the entire unit shall be considered an electronic smoking 28 product for the purposes of this definition; 29 (B) does not include a 30 (i) product that is subject to taxation under 31 AS 43.61.010 - 43.61.050 that does not contain nicotine; 01 (ii) drug, product, or combination product approved for 02 sale by the United States Food and Drug Administration, as those terms 03 are defined in 21 U.S.C. 301-392 (Food, Drug, and Cosmetic Act); or 04 (iii) product that has been approved by the United 05 States Food and Drug Administration for sale as a smoking cessation 06 product, tobacco dependence product, or modified risk tobacco product. 07  * Sec. 23. AS 43.60.010(a) is amended to read: 08 (a) Except as provided in (c) of this section, every brewer, distiller, bottler, 09 jobber, retailer, wholesaler, or manufacturer who sells alcoholic beverages in the state 10 or who consigns shipments of alcoholic beverages into the state, whether or not the 11 alcoholic beverages are brewed, distilled, bottled, or manufactured in the state, shall 12 pay on all malt beverages (alcoholic content of one percent or more by volume), 13 wines, and hard or distilled alcoholic beverages, the following taxes: 14 (1) malt beverages at the rate of $2.14 [$1.07] a gallon or fraction of a 15 gallon; 16 (2) cider with at least 0.5 percent alcohol by volume but not more than 17 seven percent alcohol by volume, at the rate of $2.14 [$1.07] a gallon or fraction of a 18 gallon; 19 (3) wine or other beverages, other than beverages described in (1) or 20 (2) of this subsection, of 21 percent alcohol by volume or less, at the rate of $5 [$2.50] 21 a gallon or fraction of a gallon; and 22 (4) other beverages having a content of more than 21 percent alcohol 23 by volume at the rate of $25.60 [$12.80] a gallon. 24  * Sec. 24. AS 43.60.010(c) is amended to read: 25 (c) A brewer shall pay a tax at the rate of 70 [35] cents a gallon on sales of the 26 first 60,000 barrels of beer sold in the state each fiscal year beginning July 1, 2001, for 27 beer produced in the United States if the producing brewery meets the qualifications of 28 26 U.S.C. 5051(a)(2). To qualify for the tax rate under this subsection, the brewer 29 must file with the department a copy of an Alcohol and Tobacco Tax and Trade 30 Bureau acknowledged copy of the brewer's notice of intent to pay reduced rate of tax 31 required under 27 C.F.R. 25.167 for the calendar year in which the fiscal year begins 01 for which the partial exemption is sought. If proof of eligibility is not received by the 02 department before June 1, the tax rate under this subsection does not apply until the 03 first day of the second month after the month the notice is received by the department. 04 For purposes of applying this subsection, a barrel of beer may contain not more than 05 31 gallons. 06  * Sec. 25. AS 43.60.040(a) is amended to read: 07 (a) Each brewer, distiller, bottler, jobber, wholesaler, or manufacturer is 08 primarily liable for the payment of the excise taxes on alcoholic beverages sold, and 09 shall furnish a good and sufficient surety bond in an amount as determined by [OF 10 $25,000 PAYABLE TO] the department and approved by the Department of Law. If a 11 licensee [WHOLESALER] fails to pay the tax to the state the licensee 12 [WHOLESALER] forfeits the bond and the licensee's [WHOLESALER'S] license 13 shall be revoked. The department, in its discretion, may issue permits in place of 14 bonds to resident holders of wholesale, malt beverage, and wine licenses doing 15 business wholly in the state who pay the tax before shipment. 16  * Sec. 26. AS 43.65.010(a) is amended to read:  17 (a) A person prosecuting or attempting to prosecute, or engaging in the 18 business of mining in the state shall obtain a license from the department. All new 19 mining operations are exempt from the tax levied by this chapter for two [THREE 20 AND ONE-HALF] years after production begins. 21  * Sec. 27. AS 43.65.010(c) is amended to read: 22 (c) The license tax on mining is as follows: on [UPON] the net income of the 23 taxpayer from the property in the state, computed with allowable depletion, plus 24 royalty received in connection with mining property in the state 25 over $40,000 and not over $50,000 ............................................................... 3 percent 26 over $50,000 and not over $100,000 ......................................................... $1,500 plus 27 5 percent of the excess over $50,000 28 over $100,000 ............................................................................................. $4,000 29 9 [7] percent of the excess over $100,000. 30  * Sec. 28. AS 43.65.030 is amended to read: 31 Sec. 43.65.030. Applications and [APPLICATION FOR] renewals; fees. 01 The fee for a mining license and for each renewal is $50. Application for renewal of 02 a mining license shall be made before January 1 [MAY 1] of each year. 03  * Sec. 29. AS 43.75.015(a) is amended to read: 04 (a) A person engaged in a fisheries business is liable for and shall pay the tax 05 levied by this section on the value of each of the following fisheries resources 06 processed during the year at the rate set out after each: 07 (1) salmon canned at a shore-based fisheries business - five [FOUR] 08 and one-half percent; 09 (2) salmon processed by a shore-based fisheries business, except 10 salmon for which the tax is due under (1) of this subsection, and all other fisheries 11 resources processed by a shore-based fisheries business - four [THREE] percent; 12 (3) fisheries resources processed by a floating fisheries business - six 13 [FIVE] percent. 14  * Sec. 30. AS 43.75.015(d) is amended to read: 15 (d) Instead of the taxes levied under (a) or (b) of this section, a person who 16 processes a fishery resource under a direct marketing fisheries business license is 17 liable for and shall pay a tax equal to 18 (1) one percent of the value of the developing commercial fish species 19 processed during the year; and 20 (2) four [THREE] percent of the value of a commercial fish species 21 not subject to (1) of this subsection. 22  * Sec. 31. AS 43.75.030(b) is amended to read: 23 (b) The return shall be made on a [THE BASIS OF THE] calendar year basis  24 and submitted to the department [AT JUNEAU] before April 1 after the close of the 25 calendar year. 26  * Sec. 32. AS 43.75.130(a) is amended to read: 27 (a) The amount of tax revenue equal to one percent of the value of each  28 fishery taxed under this chapter shall be deposited into the general fund. Except 29 as provided in (d) of this section, and not including the revenue equal to one  30 percent of the value of each fishery taxed under this section deposited in the  31 general fund, the commissioner shall pay 01 (1) to each unified municipality and to each city located in the 02 unorganized borough, 50 percent of the amount of tax revenue collected in the 03 municipality from taxes levied under this chapter; 04 (2) to each city located within a borough, 25 percent of the amount of 05 tax revenue collected in the city from taxes levied under this chapter; and 06 (3) to each borough 07 (A) 50 percent of the amount of tax revenue collected in the 08 area of the borough outside cities from taxes levied under this chapter; and 09 (B) 25 percent of the amount of tax revenue collected in cities 10 located within the borough from taxes levied under this chapter. 11  * Sec. 33. AS 43.77.010 is amended to read: 12 Sec. 43.77.010. Landing tax. A person who engages or attempts to engage in a 13 floating fisheries business in the state and who owns a fishery resource that is not 14 subject to AS 43.75 but that is brought into the jurisdiction of, and first landed in, this 15 state is liable for and shall pay a landing tax on the value of the fishery resource. The 16 amount of the landing tax is 17 (1) for a developing commercial fish species, as defined under 18 AS 43.75.290, one percent of the value of the fishery resource at the place of landing; 19 (2) for a fish species other than a developing commercial fish species, 20 four [THREE] percent of the value of the fishery resource at the place of the landing. 21  * Sec. 34. AS 43.77.060(a) is amended to read: 22 (a) The amount of tax revenue equal to one percent of the value of each  23 fishery taxed under this chapter shall be deposited into the general fund. Subject 24 to appropriation by the legislature and except as provided in (b) of this section, and  25 not including the revenue equal to one percent of the value of each fishery taxed  26 under this section deposited in the general fund, the commissioner shall pay to each 27 (1) unified municipality and to each city located in the unorganized 28 borough, 50 percent of the amount of tax revenue collected from taxes levied under 29 this chapter on the fishery resource landed in the municipality and accounted for under 30 AS 43.77.050(b); 31 (2) city located within a borough, 25 percent of the amount of the tax 01 revenue collected from taxes levied under this chapter on fishery resources landed in 02 the city and accounted for under AS 43.77.050(b); and 03 (3) borough 04 (A) 50 percent of the amount of the tax revenue collected from 05 taxes levied under this chapter on fishery resources landed in the area of the 06 borough outside cities and accounted for under AS 43.77.050(b); and 07 (B) 25 percent of the amount of the tax revenue collected from 08 taxes levied under this chapter on fishery resources landed in cities located 09 within the borough and accounted for under AS 43.77.050(b). 10  * Sec. 35. AS 43.77.060(b) is amended to read: 11 (b) The amount of tax revenue equal to one percent of the value of each  12 fishery taxed under this chapter shall be deposited into the general fund. 13 Notwithstanding the provisions of (a)(2) and (a)(3)(B) of this section, and subject to 14 appropriation by the legislature, and not including the revenue equal to one percent  15 of the value of each fishery taxed under this section deposited in the general fund, 16 the commissioner shall pay to each 17 (1) city that is located in a borough incorporated after January 1, 1994, 18 the following percentages of the tax revenue collected from taxes levied under this 19 chapter on fishery resources landed in the city and accounted for under 20 AS 43.77.050(b): 21 (A) 45 percent of the tax revenue collected during the calendar 22 year in which the borough is incorporated; 23 (B) 40 percent of the tax revenue collected during the first 24 calendar year after the calendar year in which the borough is incorporated; 25 (C) 35 percent of the tax revenue collected during the second 26 calendar year after the calendar year in which the borough is incorporated; and 27 (D) 30 percent of the tax revenue collected during the third 28 calendar year after the calendar year in which the borough is incorporated; and 29 (2) borough that is incorporated after January 1, 1994, the following 30 percentages of the tax revenue collected from taxes levied under this chapter on 31 fishery resources landed in the cities located within the borough and accounted for 01 under AS 43.77.050(b): 02 (A) five percent of the tax revenue collected during the 03 calendar year in which the borough is incorporated; 04 (B) 10 percent of the tax revenue collected during the first 05 calendar year after the calendar year in which the borough is incorporated; 06 (C) 15 percent of the tax revenue collected during the second 07 calendar year after the calendar year in which the borough is incorporated; and 08 (D) 20 percent of the tax revenue collected during the third 09 calendar year after the calendar year in which the borough is incorporated. 10  * Sec. 36. The uncodified law of the State of Alaska enacted in sec. 4, ch. 48, SLA 1997, as 11 repealed and reenacted by sec. 42, ch.1, FSSLA 2004, is repealed and reenacted to read: 12 Sec. 4. AS 43.50.190(a) is amended to read: 13 (a) There is levied an excise tax on each cigarette imported or acquired in this 14 state, 15 (1) after September 30, 1997, but before January 1, 2005, 47.5 mills; 16 (2) after December 31, 2004, but before July 1, 2006, 77.5 mills; 17 (3) after June 30, 2006, but before July 1, 2007, 87.5 mills; 18 (4) after June 30, 2007, but before July 1, 2016, 97.5 mills; 19 (5) after June 30, 2016, 147.5 mills. 20  * Sec. 37. AS 27.30.080 and AS 38.05.212(b)(2) are repealed. 21  * Sec. 38. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 APPLICABILITY. (a) The changes to the applicability of the exploration incentive 24 credit made in AS 27.30.030(a) and (b), as amended by secs. 2 and 3 of this Act, 25 AS 27.30.040, as amended by sec. 4 of this Act, AS 27.30.050, as amended by sec. 5 of this 26 Act, AS 38.05.150(d), as amended by sec. 6 of this Act, and the repeal of AS 27.30.080 and 27 AS 38.05.212(b)(2) by sec. 37 of this Act, apply to a royalty payment period beginning on or 28 after the effective date of sec. 2 of this Act. 29 (b) AS 43.40.010(a), as amended by sec. 7 of this Act, applies to motor fuel sold or 30 transferred in the state on or after the effective date of sec. 7 of this Act. 31 (c) AS 43.40.010(b), as amended by sec. 8 of this Act, applies to motor fuel 01 consumed by a user on or after the effective date of sec. 8 of this Act. 02 (d) AS 43.40.030(a), as amended by sec. 9 of this Act, applies to a motor fuel tax 03 refund on motor fuel used on or after the effective date of sec. 9 of this Act. 04 (e) AS 43.50.190(a), as amended by sec. 12 of this Act, and AS 43.50.300, as 05 amended by sec. 13 of this Act, apply to tobacco products sold on or after the effective date of 06 secs. 12 and 13 of this Act. 07 (f) AS 43.50.305, added by sec. 14 of this Act, applies to electronic smoking products 08 sold on or after the effective date of sec. 14 of this Act. 09 (g) AS 43.50.330(a), as amended by sec. 17 of this Act, applies to the first monthly 10 return submitted after the first full month after the effective date of sec. 17 of this Act. 11 (h) AS 43.60.010(a), as amended by sec. 23 of this Act, and AS 43.60.010(c), as 12 amended by sec. 24 of this Act, apply to alcoholic beverages sold on or after the effective date 13 of secs. 23 and 24 of this Act. 14 (i) AS 43.60.040(a), as amended by sec. 25 of this Act, applies to surety bonds on or 15 after the effective date of sec. 25 of this Act. 16 (j) AS 43.65.010(a), as amended by sec. 26 of this Act, applies to a mining operation 17 that begins production on or after the effective date of sec. 26 of this Act. 18 (k) AS 43.65.010(c), as amended by sec. 27 of this Act, applies to net income of the 19 taxpayer from property in the state during a taxable year that begins on or after the effective 20 date of sec. 27 of this Act. 21 (l) AS 43.75.015(a) and 43.75.015(d), as amended by sec. 29 and 30 of this Act, apply 22 to a fisheries resource processed on or after the effective date of secs. 29 and 30 of this Act. 23 (m) AS 43.77.010, as amended by sec. 33 of this Act, applies to a fisheries resource 24 landed in the state on or after the effective date of sec. 33 of this Act. 25 * Sec. 39. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 TRANSITION: REGULATIONS. (a) The Alaska Commercial Fisheries Entry 28 Commission, the Department of Fish and Game, the Department of Revenue, and the 29 Department of Natural Resources may adopt regulations necessary to implement the changes 30 made by this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), 31 but not before the effective date of the law implemented by the regulation. 01 * Sec. 40. Section 39 of this Act takes effect immediately under AS 01.10.070(c). 02 * Sec. 41. Except as provided in sec. 40 of this Act, this Act takes effect January 1, 2017.