SCS CSHB 341(JUD): "An Act relating to administrative adjudication and judicial appeals and to the informal resolution of certain factual disputes between taxpayers and the Department of Revenue; establishing the office of tax appeals as a quasi-judicial agency in the Department of Administration; revising the procedures for hearing certain tax appeals, including appeals regarding seafood marketing assessments; relating to consideration and determination by the superior court of disputes involving certain taxes and penalties due, and amending provisions relating to the assessment, levy, and collection of taxes and penalties by the state and to the tax liability of taxpayers; providing for the release of agency records relating to formal administrative tax appeals; relating to litigation disclosure of public records; clarifying administrative subpoena power in certain tax matters; and providing for an effective date."
00SENATE CS FOR CS FOR HOUSE BILL NO. 341(JUD) 01 "An Act relating to administrative adjudication and judicial appeals and to the 02 informal resolution of certain factual disputes between taxpayers and the 03 Department of Revenue; establishing the office of tax appeals as a quasi-judicial 04 agency in the Department of Administration; revising the procedures for hearing 05 certain tax appeals, including appeals regarding seafood marketing assessments; 06 relating to consideration and determination by the superior court of disputes 07 involving certain taxes and penalties due, and amending provisions relating to 08 the assessment, levy, and collection of taxes and penalties by the state and to 09 the tax liability of taxpayers; providing for the release of agency records 10 relating to formal administrative tax appeals; relating to litigation disclosure of 11 public records; clarifying administrative subpoena power in certain tax matters; 12 and providing for an effective date." 13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 14 * Section 1. AS 43.05 is amended by adding new sections to read:
01 ARTICLE 4. OFFICE OF TAX APPEALS. 02 Sec. 43.05.400. OFFICE OF TAX APPEALS ESTABLISHED. The office of 03 tax appeals is established within the department. 04 Sec. 43.05.405. JURISDICTION. The office of tax appeals has original 05 jurisdiction to hear formal appeals from informal conference decisions of the 06 Department of Revenue under AS 43.05.240. Appeal to the office may be taken only 07 from an informal conference decision under AS 43.05.240. Jurisdiction of the office 08 is limited to, and AS 43.05.400 - 43.05.499 applies to and governs, an administrative 09 appeal regarding 10 (1) electric and telephone cooperative taxes under AS 10.25; 11 (2) a seafood marketing assessment under AS 16.51; 12 (3) all taxes levied under AS 43, except the property tax assessed under 13 AS 43.56; and 14 (4) any other taxes administered by the Department of Revenue. 15 Sec. 43.05.410. APPOINTMENT; TERM; REAPPOINTMENT. (a) The 16 governor shall appoint a chief administrative law judge of the office of tax appeals 17 from among two or more persons nominated as most qualified for that position by the 18 Alaska Judicial Council. If one or more additional administrative law judges are 19 established in the office of tax appeals, the governor shall appoint additional 20 administrative law judges from among two or more persons nominated as most 21 qualified for each position by the judicial council. 22 (b) The initial term for an administrative law judge, including the chief 23 administrative law judge, is two years. The governor may reappoint a person appointed 24 to serve as an administrative law judge, including the chief administrative law judge, 25 to subsequent terms of four years each. 26 (c) A reappointment of a person appointed to serve as an administrative law 27 judge, including the chief administrative law judge, shall be made as follows: 28 (1) if an administrative law judge seeks reappointment, the governor 29 shall notify the judicial council of the impending end of the administrative law judge's 30 term at least 120 days before the end of the term; 31 (2) in reviewing the performance of the administrative law judge, the
01 judicial council shall collect and review sufficient information to thoroughly evaluate 02 the administrative law judge; the review by the judicial council must include a 03 published notice requesting written comments on the administrative law judge whose 04 performance is being evaluated; 05 (3) the judicial council shall review the performance of the 06 administrative law judge and submit by at least 30 days before the vacancy a 07 recommendation to the governor on whether the administrative law judge should be 08 reappointed; 09 (4) the governor has discretion to reappoint or not reappoint an 10 administrative law judge whom the judicial council recommends for reappointment, but 11 the governor may not reappoint a person as administrative law judge if the judicial 12 council recommends against that reappointment. 13 (d) Nominations made by the Alaska Judicial Council under (a) of this section 14 shall be made after the judicial council has reviewed the qualifications of applicants 15 for administrative law judges. The judicial council shall collect and review sufficient 16 information to thoroughly evaluate each applicant. The review by the judicial council 17 must include a published notice requesting written comments on the list of applicants 18 for an administrative law judge opening. 19 (e) In reviews by the Alaska Judicial Council under (c) and (d) of this section, 20 (1) comments, references, or survey responses that request 21 confidentiality, or for which the judicial council promises confidentiality, shall be kept 22 confidential, but the judicial council shall provide the applicant for administrative law 23 judge or administrative law judges seeking reappointment a summary of the concerns 24 raised in the comments, references, and survey responses that are kept confidential; 25 (2) the judicial council has authority to review confidential Alaska Bar 26 Association files, including bar complaint files, on applicants for administrative law 27 judge and on administrative law judges seeking reappointment whose applications or 28 reappointment evaluations are under review; the judicial council shall maintain the 29 confidentiality of these files; and 30 (3) the judicial council shall send to the governor with its nominees or 31 reappointment recommendations all nonconfidential materials that it gathers on
01 applicants for administrative law judge and administrative law judges seeking 02 reappointment whose applications or reappointment evaluations are under review, and 03 shall provide the governor with summaries of concerns raised in the comments, 04 references, and survey responses that are kept confidential. 05 Sec. 43.05.415. REMOVAL. (a) The chief administrative law judge may be 06 disciplined or removed from office by the commissioner only for good cause. 07 (b) An administrative law judge other than the chief administrative law judge 08 may be disciplined or removed from office by the chief administrative law judge only 09 for good cause. 10 (c) In this section, "good cause" includes 11 (1) violation of the Alaska code of judicial conduct adopted by the 12 Alaska Supreme Court; 13 (2) conviction of a crime of moral turpitude; 14 (3) unjustified failure to handle the caseload assigned or similar 15 nonfeasance of office; 16 (4) failure to meet the requirements of AS 43.05.425 relating to 17 qualification for office; and 18 (5) unreasonable failure to comply with the statutes or regulations 19 regarding the confidentiality of taxpayer information. 20 Sec. 43.05.420. ADMINISTRATION. (a) The chief administrative law judge 21 (1) shall exercise general supervision of the office; and 22 (2) may select and hire staff for the office. 23 (b) An administrative law judge, including the chief administrative law judge, 24 may preside over a proceeding and carry out any procedures authorized under 25 AS 43.05.400 - 43.05.499. 26 (c) The chief administrative law judge may adopt regulations implementing or 27 interpreting AS 43.05.400 - 43.05.499, including rules of procedure and evidence for 28 proceedings before the office. 29 Sec. 43.05.425. QUALIFICATIONS; CODE OF CONDUCT. (a) An 30 administrative law judge, including the chief administrative law judge, at the time of 31 appointment, must
01 (1) be licensed to practice law in this state or another state; and 02 (2) have experience in the field of tax law or tax administration. 03 (b) A person appointed as an administrative law judge under AS 43.05.410 04 who is not licensed to practice law in this state at the time of appointment must 05 become licensed to practice law in this state within 12 months after appointment or 06 shall cease to hold office. 07 (c) An administrative law judge, including the chief administrative law judge, 08 shall comply with the Alaska code of judicial conduct and, except as provided in (b) 09 of this section, shall be and remain licensed to practice law in this state. 10 Sec. 43.05.430. NOTICE OF APPEAL FROM INFORMAL CONFERENCE 11 DECISION. An appeal under the jurisdiction of the office is initiated by filing with 12 the office, and serving upon the commissioner of revenue, a notice of appeal from an 13 informal conference decision of the Department of Revenue under AS 43.05.240. A 14 notice of appeal from the informal conference decision may be filed or amended after 15 the time for filing has expired only if good cause is shown. 16 Sec. 43.05.435. SCOPE AND STANDARDS FOR DECISION. The 17 administrative law judge shall hear all questions de novo under AS 43.05.400 - 18 43.05.499. The administrative law judge shall 19 (1) resolve a question of fact by a preponderance of the evidence or, 20 if a different standard of proof has been set by law for a particular question, by that 21 standard of proof; 22 (2) resolve a question of law in the exercise of the independent 23 judgment of the administrative law judge; 24 (3) defer to the Department of Revenue as to a matter for which 25 discretion is legally vested in the Department of Revenue, unless not supported by a 26 reasonable basis. 27 Sec. 43.05.440. SERVICE OF DOCUMENTS. Service of documents required 28 under AS 43.05.400 - 43.05.499 may be accomplished in any manner authorized under 29 the Alaska Rules of Civil Procedure. If service is done only by mail, the date of 30 service is determined by the date of mailing. If service is done by both mail and hand 31 delivery, the date of service is determined by the earlier of the date of mailing or
01 actual receipt of the documents. 02 Sec. 43.05.445. DISCOVERY. (a) In an appeal under AS 43.05.405, 03 discovery may take place only under a plan for discovery approved by the 04 administrative law judge. The administrative law judge shall approve a plan for 05 discovery to the extent consistent with the efficient, just, and speedy conduct of the 06 appeal. The plan may limit or set conditions on discovery and must include provisions 07 for stipulations of fact by the Department of Revenue and the taxpayer. Discovery 08 shall be limited to information that is relevant to the determination of the correct tax 09 or penalty, unless the Department of Revenue or the taxpayer makes a showing that 10 the discovery is reasonably calculated to lead to admissible information. 11 (b) Requests by the taxpayer for disclosure of public records relating to the 12 appeal are governed by, and the records are disclosed only in accordance with, the plan 13 approved under this section. 14 (c) Legislative history, reported court decisions, statutes, regulations, or similar 15 documents available for public inspection at a library or the office of the lieutenant 16 governor or through a publicly accessible database must be obtained through those 17 means and may not be sought through discovery. 18 Sec. 43.05.450. SUBPOENAS. An administrative law judge may issue a 19 subpoena to compel attendance of a witness or the production of a document or thing. 20 A subpoena may compel attendance of a witness or production of a document or thing, 21 located either inside or outside the state, to the maximum extent permitted by law. A 22 subpoena may be used for the purpose of discovery or for the purpose of presenting 23 evidence at a formal hearing. A subpoena shall issue upon request of a party, subject 24 to reasonable limitation or conditions set in the subpoena. A subpoena may be 25 enforced by petition to or other appropriate legal proceeding brought in a court of this 26 state or another jurisdiction. 27 Sec. 43.05.455. FORMAL HEARING. (a) At or before the formal hearing, 28 a party may present argument and evidence relevant to the amount of the tax or 29 penalty. The administrative law judge shall administer oaths and permit inquiry 30 necessary to determine the proper amount of the tax or penalty. 31 (b) Each party and witness shall be present during the formal hearing, except
01 that 02 (1) with the consent of the taxpayer, the administrative law judge may 03 conduct all or part of the hearing by telephone, audio or video teleconference, or other 04 electronic medium; and 05 (2) with the consent of the parties and the administrative law judge, all 06 or part of the hearing may be conducted through correspondence. 07 (c) The taxpayer bears the burden of proof on questions of fact by a 08 preponderance of the evidence unless a different standard of proof has been set by law 09 for a particular question. 10 (d) The formal hearing before the administrative law judge is not required to 11 be conducted with strict adherence to the Alaska Rules of Evidence. Relevant 12 evidence must be admitted if it is probative of a material fact in controversy. 13 Irrelevant and unduly repetitious evidence shall be excluded. Hearsay evidence is 14 admissible if it is the kind of evidence on which responsible persons are accustomed 15 to rely in the conduct of serious affairs, regardless of the existence of a common law 16 or statutory rule that makes improper the admission of the evidence over objection in 17 a civil action. Oral evidence may be taken only on oath or affirmation. The rules of 18 privilege are effective to the same extent that they are recognized in a civil action in 19 the courts of this state, except that relevant documents and other material items that 20 are public records under AS 09.25.100 - 09.25.220 shall be admissible. 21 (e) The administrative law judge shall make a record of the proceedings of the 22 appeal, including recordation of the proceedings of a formal hearing by electronic or 23 stenographic means. 24 (f) The administrative law judge may grant exceptions to the requirements of 25 this section in the interest of justice. 26 Sec. 43.05.460. ENFORCEMENT. (a) The administrative law judge and each 27 party is responsible for the efficient, just, and speedy conduct of the formal hearing. 28 The administrative law judge may impose sanctions on the parties for failure to comply 29 with a subpoena, an order respecting discovery, and any other matter regarding conduct 30 of the appeal. In imposing sanctions, the administrative law judge shall be guided by 31 the practices of the courts of this state in imposing sanctions for similar offenses in
01 civil proceedings. 02 (b) The administrative law judge may 03 (1) remand the matter for consideration of material new information or 04 material information withheld by a party; 05 (2) prohibit a party from introducing information previously withheld 06 without good cause, and any other evidence dependent upon the information; 07 (3) enter an order, upon a showing of good cause, 08 (A) barring a designated claim or defense; 09 (B) striking part or all of a pleading of a party; or 10 (C) dismissing part or all of the appeal; or 11 (4) grant any other relief that the administrative law judge considers 12 appropriate. 13 (c) In addition to the remedies of (a) and (b) of this section, a party may seek 14 enforcement of a subpoena or other order of an administrative law judge by the 15 superior court under AS 44.62.590. 16 Sec. 43.05.465. DECISION; RECONSIDERATION; FINALITY. (a) Within 17 180 days after the record on the appeal is closed, the administrative law judge shall 18 issue a decision in writing. The decision must contain a concise statement of reasons 19 for the decision, including findings of fact and conclusions of law. In the decision, the 20 administrative law judge may grant relief, provide remedies, and issue any order that 21 is appropriate. The administrative law judge shall serve each party in the case with 22 a copy of the decision. Unless reconsideration is ordered under (c) of this section, the 23 decision under this subsection is the final administrative decision. 24 (b) A party may request reconsideration of a decision issued under (a) of this 25 section within 30 days after the date of service shown in the certificate of service of 26 the decision. The request must state specific grounds for reconsideration. 27 Reconsideration may be granted if, in reaching the decision, the administrative law 28 judge has 29 (1) overlooked, misapplied, or failed to consider a statute, regulation, 30 court or administrative decision, or legal principle directly controlling; 31 (2) overlooked or misconceived some material fact or proposition of
01 law; 02 (3) misconceived a material question in the case; or 03 (4) applied law in the ruling that has subsequently changed. 04 (c) The administrative law judge may issue an order for reconsideration of all 05 or part of the decision upon request of a party. Reconsideration is based on the record, 06 unless the administrative law judge allows additional evidence and argument. A 07 hearing on reconsideration at which additional evidence or argument is offered or 08 received is subject to the procedures applicable to a hearing under AS 43.05.455. 09 (d) The power to order reconsideration expires 60 days after the date of 10 service, as shown on the certificate of service, of a decision issued under (a) of this 11 section. If the administrative law judge does not issue an order for reconsideration 12 within the time allowed for ordering reconsideration, a motion for reconsideration is 13 considered denied. 14 (e) Within 60 days after the close of the record on reconsideration, the 15 administrative law judge shall issue a written decision upon reconsideration. The 16 administrative law judge shall serve each party in the case with a copy of the decision 17 upon reconsideration. The decision upon reconsideration is the final administrative 18 decision. 19 (f) A final administrative decision becomes final either on the date 20 (1) 60 days after the date of service of a decision issued under (a) of 21 this section if an order for reconsideration is not issued; or 22 (2) the decision upon reconsideration is served, as shown by the 23 certificate of service executed by the administrative law judge under (e) of this section. 24 Sec. 43.05.470. PUBLIC PROCEEDINGS AND RECORDS. (a) Records, 25 proceedings, and decisions under AS 43.05.400 - 43.05.499 are confidential, except 26 that the records, proceedings, and decisions become public records and open to the 27 public when the final administrative decision is issued and becomes final. 28 (b) Upon a showing of good cause, an administrative law judge shall issue a 29 protective order requiring that specified parts of the records, proceeding, or decision 30 shall be kept confidential in a particular appeal. If a protective order is issued, the 31 final administrative decision shall be made public after redacting by deletion or
01 substitution of information as required by the protective order. 02 (c) The department, in consultation with the chief administrative law judge, 03 shall maintain, index, and make available for public inspection the final administrative 04 decisions, proceedings, and records of the office made public under this section. 05 Sec. 43.05.475. CONSISTENCY OF DECISIONS. (a) As to questions of 06 law, a final administrative decision issued under AS 43.05.400 - 43.05.499, unless 07 reversed or overruled, has the force of legal precedent. 08 (b) To promote consistency among legal determinations issued under 09 AS 43.05.400 - 43.05.499, the chief administrative law judge may review and circulate 10 among the other administrative law judges the drafts of formal decisions, decisions 11 upon reconsideration, and other legal opinions of the other administrative law judges 12 in the office. The drafts are confidential documents and are not subject to disclosure 13 under AS 09.25.100 - 09.25.220 or this chapter. 14 Sec. 43.05.480. JUDICIAL REVIEW. (a) Judicial review by the superior 15 court of a final administrative decision may be had by a party to the appeal under 16 AS 43.05.400 - 43.05.499 by filing a notice of appeal in accordance with the 17 applicable rules of court governing appeals to that court in civil matters. The notice 18 of appeal shall be filed within 30 days after an administrative decision becomes final 19 under AS 43.05.465. The right to judicial review under this subsection is not affected 20 by the failure to seek reconsideration before the administrative law judge. 21 (b) The amount due must be paid or refunded within 30 days after the date 22 that the final administrative decision becomes final under AS 43.05.465. In place of 23 payment of the amount due, a taxpayer who has appealed a final administrative 24 decision may file a bond with the court or otherwise obtain relief from payment in 25 accordance with the Alaska Rules of Appellate Procedure. 26 (c) Appeals under this section are reviewed under AS 44.62.560 and 44.62.570. 27 (d) If, after the appeal is heard, it appears that the final administrative decision 28 was correct, the court shall affirm the decision. If the final administrative decision is 29 incorrect, the court shall determine the amount due. If the taxpayer is entitled to a 30 refund, the court shall order the repayment and the Department of Revenue shall pay 31 the amount due and attach a certified copy of the judgment to the payment. If the
01 court determines that the taxpayer owes an additional amount, the court shall order the 02 payment and the taxpayer shall pay the amount due and attach a certified copy of the 03 judgment to the payment. Any payment required under this subsection shall be paid 04 by the 30th day following the expiration of the time within which an appeal from the 05 superior court decision may be filed, unless the party appealing files a bond or 06 otherwise obtains relief from payment in accordance with the Alaska Rules of 07 Appellate Procedure. 08 Sec. 43.05.499. DEFINITIONS. In AS 43.05.400 - 43.05.499, unless the 09 context otherwise requires, 10 (1) "administrative law judge" means an administrative law judge 11 appointed under AS 43.05.410; 12 (2) "commissioner" means the commissioner of administration; 13 (3) "department" means the Department of Administration; 14 (4) "discovery" means the use of subpoenas, subpoenas duces tecum, 15 interrogatories, requests for production, requests for admission, depositions, and other 16 methods of civil procedure by which one party to an action may discover information 17 within the knowledge and control of another person; 18 (5) "legislative history" means the documents of the legislature 19 recording the background and events, including draft bills, correspondence and 20 memoranda, committee reports, tapes and transcripts of hearings, and tapes and 21 transcripts of floor debate concerning consideration of a bill; 22 (6) "office" means office of tax appeals in the department; 23 (7) "party" means the Department of Revenue or the taxpayer; 24 (8) "proceeding" means only a proceeding under the jurisdiction of the 25 office; 26 (9) "subpoena" means a command to appear at a certain time and place 27 to testify, or to appear at a certain time and place to produce books, papers, and other 28 things, and testify; 29 (10) "tax" means a tax described in AS 43.05.405, including a seafood 30 marketing assessment under AS 16.51; 31 (11) "taxpayer" means a person required to pay a tax, including a
01 person required to pay a seafood marketing assessment under AS 16.51. 02 * Sec. 2. AS 09.25.100 is amended to read: 03 Sec. 09.25.100. DISPOSITION OF TAX INFORMATION. Information in the 04 possession of the Department of Revenue that discloses the particulars of the business 05 or affairs of a taxpayer or other person is not a matter of public record, except for 06 purposes of investigation and law enforcement. The information shall be kept 07 confidential except when its production is required in an official investigation, 08 administrative adjudication under AS 43.05.400 - 43.05.499, or court proceeding. 09 These restrictions do not prohibit the publication of statistics presented in a manner 10 that prevents the identification of particular reports and items, [OR] prohibit the 11 publication of tax lists showing the names of taxpayers who are delinquent and 12 relevant information that may assist in the collection of delinquent taxes, or prohibit 13 the publication of records, proceedings, and decisions under AS 43.05.400 - 14 43.05.499. 15 * Sec. 3. AS 09.25.122 is amended to read: 16 Sec. 09.25.122. LITIGATION DISCLOSURE. A public record that is subject 17 to disclosure and copying under AS 09.25.110 - 09.25.120 remains a public record 18 subject to disclosure and copying even if the record is used for, included in, or relevant 19 to litigation, including law enforcement proceedings, involving a public agency, except 20 that with respect to a person involved in litigation, the records sought shall be 21 disclosed in accordance with the rules of procedure applicable in a court or an 22 administrative adjudication [RULES]. In this section, "involved in litigation" means 23 a party to litigation or representing a party to litigation, including obtaining public 24 records for the party. 25 * Sec. 4. AS 22.10.020(d) is amended to read: 26 (d) The superior court has jurisdiction in all matters appealed to it from a 27 subordinate court, or administrative agency when appeal is provided by law. The 28 hearings on appeal from a final order or judgment of a subordinate court or 29 administrative agency, except an appeal under AS 43.05.242, shall be on the record 30 unless the superior court, in its discretion, grants a trial de novo, in whole or in part. 31 The hearings on appeal from a final order or judgment under AS 43.05.242 shall
01 be on the record. 02 * Sec. 5. AS 37.10.410 is amended to read: 03 Sec. 37.10.410. "ADMINISTRATIVE PROCEEDINGS INVOLVING TAXES" 04 DEFINED. (a) The following money received by the state is considered to be 05 received as a result of the termination of an administrative proceeding for purposes of 06 applying art. IX, sec. 17(a), Constitution of the State of Alaska: 07 (1) past due taxes that are received by the state for each tax year for 08 which a request for an informal conference under AS 43.05.240 [AS 43.05.240(a)] is 09 made to the Department of Revenue, together with penalties and interest on the taxes; 10 (2) past due taxes that are received by the state after a request for a 11 formal hearing under AS 43.05.241 [AS 43.05.240(b)(1)] is made to the Department 12 of Revenue, together with penalties and interest on the taxes. 13 (b) Money received by the state under the following conditions is not 14 considered to be received as the result of the termination of an administrative 15 proceeding for purposes of applying art. IX, sec. 17(a), Constitution of the State of 16 Alaska: 17 (1) taxes that are not due at the time the request for the proceeding was 18 made under AS 43.05.240, 43.05.241, or 43.05.242 [AS 43.05.240(a) or (b)(1)]; 19 (2) taxes set out in a return not audited by the Department of Revenue 20 at the date of collection; or 21 (3) taxes collected for a tax year for which the taxpayer did not give 22 notice of appeal of an assessment made by the Department of Revenue. 23 * Sec. 6. AS 39.25.110 is amended by adding a new paragraph to read: 24 (31) the chief administrative law judge and any other administrative law 25 judges appointed to the office of tax appeals of the Department of Administration 26 under AS 43.05.400 - 43.05.499. 27 * Sec. 7. AS 43.05.010 is amended to read: 28 Sec. 43.05.010. DUTIES OF COMMISSIONER. The commissioner of 29 revenue shall 30 (1) exercise general supervision and direct the activities of the 31 Department of Revenue;
01 (2) supervise the fiscal affairs and responsibilities of the department; 02 (3) prescribe uniform rules for investigations and hearings; 03 (4) keep a record of all departmental proceedings, record and file all 04 bonds, and assume custody of returns, reports, papers, and documents of the 05 department; 06 (5) [REPEALED 07 (6)] adopt a seal and affix it to each order, process, or certificate issued 08 by the commissioner; 09 (6) [(7)] keep a record of each order, process, and certificate issued by 10 the commissioner, and keep the record open to public inspection at all reasonable 11 times; 12 (7) [(8)] hold hearings and investigations necessary for the 13 administration of state tax and revenue laws; 14 (8) except as provided in AS 43.05.400 - 43.05.499, [(9)] hear and 15 determine appeals of a matter within the jurisdiction of the Department of Revenue 16 [INVOLVING INCOME, EXCISE, LICENSE, OR OTHER TAXES LEVIED UNDER 17 STATE LAWS] and enter orders on the appeals that are final unless reversed or 18 modified by the courts; 19 (9) issue subpoenas to [(10)] require the attendance of witnesses and 20 the production of necessary books, papers, documents, correspondence, and other 21 things [EVIDENCE AT HEARINGS]; 22 (10) [(11)] order the taking of depositions before a person competent 23 to administer oaths; 24 (11) [(12)] administer oaths and take acknowledgments; 25 (12) [(13)] request the attorney general for rulings on the interpretation 26 of the tax and revenue laws administered by the department; 27 (13) [(14)] call upon the attorney general to institute actions for 28 recovery of unpaid taxes, fees, excises, additions to tax, penalties, and interest; 29 (14) [(15)] issue warrants for the collection of unpaid tax penalties and 30 interest and take all steps necessary and proper to enforce full and complete 31 compliance with the tax, license, excise, and other revenue laws of the state;
01 (15) [(16)] audit reports, payments, and payments due relating to 02 royalty and net profits under oil and gas contracts, agreements, or leases under 03 AS 38.05 [; 04 (17) REPEALED]. 05 * Sec. 8. AS 43.05.040 is amended to read: 06 Sec. 43.05.040. INSPECTION OF RECORDS OR PREMISES AND 07 ISSUANCE OF SUBPOENAS. (a) The department may examine the books, papers, 08 records, or memoranda of any person to ascertain the correctness of a return filed or 09 to determine whether a tax or a payment for oil or gas royalty or net profits shares 10 under a contract, agreement, or lease under AS 38.05 is due, or in an investigation or 11 inspection in connection with tax matters or matters relating to oil and gas royalty or 12 net profits under contracts, agreements, or leases under AS 38.05. The records and the 13 premises where a business is conducted shall be open at all reasonable times for 14 official inspection, and the department may subpoena any person to appear and 15 produce books, records, papers, or memoranda bearing upon tax matters or matters 16 relating to oil and gas royalty or net profits under contracts, agreements, or leases 17 under AS 38.05, and to give testimony or answer interrogatories under oath respecting 18 tax matters or matters related to oil and gas royalty or net profits under contracts, 19 agreements, or leases under AS 38.05, and the department may administer oaths to 20 persons who are so subpoenaed. A subpoena issued under this section may compel 21 attendance of a witness or production of a document or thing, located either 22 inside or outside the state, to the maximum extent permitted by law. 23 (b) A subpoena may be served by the commissioner of public safety or a peace 24 officer designated by the commissioner of public safety, [OR] by a person designated 25 by the Department of Revenue, or as otherwise provided by law. A subpoena may 26 also be served by registered or certified mail for delivery restricted only to the 27 person subpoenaed. The return delivery receipt must be addressed so that the 28 receipt is returned to the department. 29 (c) If a person who is subpoenaed neglects or refuses to obey the subpoena 30 issued as provided in this section, the department may report the fact to the superior 31 court or the appropriate court of another jurisdiction, and may seek an order
01 from the court compelling obedience to the subpoena. The [AND THE] court, to 02 the maximum extent permitted by law, may compel obedience to the subpoena to 03 the same extent as witnesses may be compelled to obey the subpoenas of the court. 04 * Sec. 9. AS 43.05.230(a) is amended to read: 05 (a) It is unlawful for a current or former officer, employee, or agent of the 06 state to divulge the amount of income or the particulars set out or disclosed in a report 07 or return made under this title, except 08 (1) in connection with official investigations or proceedings of the 09 department, whether judicial or administrative, involving taxes due under this title; 10 (2) in connection with official investigations or proceedings of the child 11 support enforcement agency, whether judicial or administrative, involving child support 12 obligations imposed or imposable under AS 25 or AS 47; 13 (3) as provided in AS 38.05.036 pertaining to audit functions; [AND] 14 (4) as provided in AS 43.05.400 - 43.05.499; and 15 (5) as otherwise provided in this section. 16 * Sec. 10. AS 43.05.240 is repealed and reenacted to read: 17 Sec. 43.05.240. TAXPAYER REMEDIES. (a) A taxpayer aggrieved by the 18 action of the department in fixing the amount of a tax or penalty may apply to the 19 department within 60 days after the date of mailing of the notice required to be given 20 to the taxpayer by the department, giving notice of the grievance, and requesting an 21 informal conference to be scheduled with an appeals officer. The taxpayer shall be 22 given access to the taxpayer's file in the department in the matter for preparation for 23 the informal conference. At the informal conference, the taxpayer may present to the 24 appeals officer arguments and evidence relevant to the amount of tax or penalty due 25 the state. If the department determines that a correction is warranted, the department 26 shall make the correction. 27 (b) A party who believes that the appeals officer is unduly delaying a hearing 28 process may notify the commissioner in writing. Within 30 days after being notified 29 by a party, the commissioner may issue an order prescribing a schedule for the appeals 30 officer to complete the informal conference or setting a meeting at which that schedule 31 will be discussed and prescribed. The schedule may be subsequently modified by
01 consent of the parties. If the commissioner fails to issue an order within 30 days after 02 receiving notice of a party's belief of undue delay, the department's action in fixing 03 the amount of tax or penalty shall be considered to have been summarily affirmed by 04 the appeals officer the same as if an informal conference decision to that effect were 05 issued on the last day of that 30-day period. 06 * Sec. 11. AS 43.05 is amended by adding new sections to read: 07 Sec. 43.05.241. ADMINISTRATIVE APPEAL. For a matter within the 08 jurisdiction of the office of tax appeals under AS 43.05.405, the taxpayer aggrieved 09 by an informal conference decision entered under AS 43.05.240 may file with the 10 office of tax appeals a notice of appeal for formal hearing, as provided in 11 AS 43.05.430, no later than 60 days after service of the decision resulting from an 12 informal conference. 13 Sec. 43.05.242. JUDICIAL APPEAL CHALLENGING VALIDITY OF TAX. 14 (a) Within 60 days after a decision resulting from the informal conference, a person 15 aggrieved by the action of the department under AS 43.05.240 on a ground specified 16 in this section may appeal to the superior court. 17 (b) An appeal under this section may be taken from an informal conference 18 decision only upon the ground that a tax statute or tax regulation is 19 (1) violative of the United States Constitution; 20 (2) violative of the state constitution; or 21 (3) preempted by federal statute, regulation, or treaty. 22 (c) An appeal under this section may not be taken from an informal conference 23 decision if 24 (1) there is a dispute of material fact; 25 (2) a factual record is necessary to decide the question of law raised; 26 (3) development of a factual record will render it unnecessary to reach 27 the question of law raised; or 28 (4) the taxpayer challenges the assessment of the tax on a ground other 29 than one listed in (b) of this section. 30 (d) An issue may not be presented to the superior court unless the issue first 31 has been presented in writing to the department at or before the informal conference.
01 The department shall prepare a record of that portion of the informal conference 02 relevant to the issue on appeal. The superior court shall 03 (1) resolve a question of law in the exercise of the independent 04 judgment of the superior court judge; 05 (2) defer to the department on a question of law for which discretion 06 is legally vested in the department unless not supported by a reasonable basis. 07 (e) An appeal of the informal conference decision under this section is 08 exclusive. The taxpayer electing to appeal under this section may not pursue an appeal 09 under AS 43.05.241 or pursue any other action under another statute. 10 (f) When an appeal is taken under this section, the taxpayer shall be given 11 access to the file of the department in the matter for preparation of the appeal. 12 (g) In an appeal under this section, the amount due shall be paid within 60 13 days after the date of the service of the informal conference decision. In place of 14 payment of the amount due, the taxpayer may file a bond with the court or otherwise 15 obtain relief from payment in accordance with the Alaska Rules of Appellate 16 Procedure. 17 (h) Venue for an appeal filed under this section shall be set under rules 18 adopted by the supreme court. 19 (i) If it is determined that appeal was improperly filed under this section, or 20 if the superior court rules against the taxpayer, the appeal shall be transferred to the 21 office of tax appeals for further proceedings under AS 43.05.400 - 43.05.499 without 22 prejudice to any claims or defenses of the taxpayer that were barred from being raised 23 in court by (c)(4) of this section. 24 * Sec. 12. AS 43.05.245 is amended to read: 25 Sec. 43.05.245. ASSESSMENT AND COLLECTION OF TAX, PENALTIES, 26 AND INTEREST. If a taxpayer fails to file a return or report required by this title in 27 the time required by law or regulation, or makes an erroneous or fraudulent return, the 28 department shall proceed to assess the license fees, tax, penalties, or interest and make 29 a return from information that [WHICH] it obtains. An assessment or a [A] return 30 [MADE AND] subscribed by the department in accordance with this section is presumed 31 sufficient for all legal purposes. However, nothing prevents a taxpayer from presenting
01 evidence or other information in [ON] an informal conference [APPEAL] under 02 AS 43.05.240 or in an appeal under AS 43.05.241 in order to rebut the presumed 03 sufficiency of an assessment or [A] return [MADE AND] subscribed by the department, 04 nor does the presumption of sufficiency alter the parties' respective burdens of proof 05 once the taxpayer has presented evidence or other material information to rebut that 06 presumption. The assessment of license fees, tax, penalties, or interest under this section 07 occurs when the department issues a notice and demand for payment of the license fees, 08 tax, penalties, or interest. The notice and demand for payment is issued when the notice 09 and demand is delivered to the taxpayer in person or placed in the United States mail, 10 addressed to the last known address of the taxpayer. Penalties and interest assessed 11 under this title shall be collected in the same manner as provided in this title for the 12 collection of tax or license fees. 13 * Sec. 13. AS 43.05.275 is amended by adding new subsections to read: 14 (c) A taxpayer who has filed a return, paid the full amount due on the return, 15 and made a claim under this section may, without exhausting administrative remedies, 16 file an action in superior court to recover on the claim if the sole ground for appeal is 17 that a tax statute is 18 (1) violative of the United States Constitution; 19 (2) violative of the state constitution; or 20 (3) preempted by federal statute, regulation, or treaty. 21 (d) An action may not be brought under (c) of this section if 22 (1) there is a dispute of material fact; 23 (2) a factual record is necessary to decide the appeal; 24 (3) development of a factual record will render it unnecessary to reach 25 a question of constitutional law or federal preemption; or 26 (4) the taxpayer challenges the assessment of the tax on a ground other 27 than one listed in (c) of this section. 28 * Sec. 14. AS 43.20.270(a) is amended to read: 29 (a) The department may collect taxes, with interest, penalties, and other 30 additional amounts permitted by law, by distraint and sale, in the manner provided in this 31 section, of the property of a person liable to pay the taxes, interest, penalties, or other
01 additional amounts, who neglects or refuses to pay them within 10 days from the mailing 02 of notice and demand for payment of them, and who has not appealed from the 03 assessment of the taxes, interest, penalties, and other additional amounts determined 04 under AS 43.05.240 or following appeal taken under AS 43.05.241 or 43.05.242. 05 * Sec. 15. AS 43.55.013(g) is amended to read: 06 (g) The monthly production at the economic limit for a lease or property is 07 presumed to be 3,000 Mcf times the number of well days for the lease or property during 08 that month for which the tax is to be paid. The taxpayer may rebut this presumption 09 [AT A FORMAL HEARING UNDER AS 43.05.240] by providing clear and convincing 10 evidence of a different monthly production rate at the economic limit for the lease or 11 property. The hearing shall be held before February 15 of the year or within six months 12 after commencement of gas production for a lease or property. The monthly production 13 rate at the economic limit for the lease or property based upon the clear and convincing 14 evidence of the taxpayer shall be calculated by dividing the value determined under (i) 15 of this section into the average monthly direct operating cost determined under (h) of this 16 section. 17 * Sec. 16. AS 43.55.040 is amended to read: 18 Sec. 43.55.040. POWERS OF DEPARTMENT OF REVENUE. Except as 19 provided in AS 43.05.400 - 43.05.499, the [THE] department may 20 (1) require a person engaged in production and the agent or employee of 21 the person, and the purchaser of oil or gas, or the owner of a royalty interest in oil or 22 gas to furnish additional information that is considered by the department as necessary 23 to compute the amount of the tax; 24 (2) examine the books, records, and files of such a person; 25 (3) conduct hearings and compel the attendance of witnesses and the 26 production of books, records, and papers of any person; and 27 (4) make an investigation or hold an inquiry that is considered necessary 28 to a disclosure of the facts as to 29 (A) the amount of production from any oil or gas location, or of 30 a company or other producer of oil or gas; [,] and 31 (B) the rendition of the oil and gas for taxing purposes.
01 * Sec. 17. EFFECT ON EXISTING REMEDIES AND PROCEDURES. This Act does not 02 affect the remedies and procedures 03 (1) specified in AS 04.11, including AS 04.11.560; AS 05.15, including 04 AS 05.15.610; AS 42.05, including AS 42.05.551; or AS 43.56, including AS 43.56.120 and 05 43.56.130; or 06 (2) adopted by regulation by the Department of Revenue governing appeal of a 07 decision of the Department of Revenue regarding 08 (A) a game of chance or skill made under AS 05.15; 09 (B) a permanent fund dividend under AS 43.23; 10 (C) a coin-operated device or punchboard under AS 43.35; or 11 (D) a child support obligation under AS 25.27. 12 * Sec. 18. TRANSITIONAL PROVISIONS. (a) The remedies and procedures provided 13 by this Act apply to all revenue tax appeals in which a request for formal hearing is filed with 14 the Department of Revenue on or after the effective date of this Act. The remedies and 15 procedures existing before the effective date of this Act apply to all revenue tax appeals in 16 which a request for formal hearing was filed with the Department of Revenue before the 17 effective date of this Act, unless all of the parties to an appeal agree in writing to the remedies 18 and procedures established by this Act. 19 (b) Notwithstanding AS 43.05.405, enacted by sec. 1 of this Act, unless the office of 20 tax appeals has a full caseload, and with the approval of the chief administrative law judge, the 21 chief administrative law judge or any other administrative law judge of the office of tax appeals 22 may be appointed by the governor, by the commissioner of administration, or by the 23 commissioner of another department to serve as a special hearing officer or special 24 administrative law judge on another matter outside the scope of this Act and arising from another 25 department of the executive branch. Appointment under this subsection may not interfere with 26 the primary mission of the office of tax appeals under this Act of the expeditious resolution of 27 administrative tax appeals under its jurisdiction. 28 (c) Until 15 AAC 05.001 - 15 AAC 05.320 and other Department of Revenue 29 regulations in effect on the effective date of this Act are revised as necessary, those regulations 30 continue to govern an administrative appeal of a Department of Revenue decision not within the 31 jurisdiction of the office of tax appeals, including a decision regarding a
01 (1) game of chance or skill under AS 05.15; 02 (2) permanent fund dividend under AS 43.23; and 03 (3) coin-operated device or punchboard under AS 43.35. 04 (d) In this section, 05 (1) "chief administrative law judge" means the chief administrative law judge 06 of the office of tax appeals appointed under AS 43.05.410, enacted by sec. 1 of this Act; 07 (2) "office of tax appeals" means the office established in AS 43.05.400, enacted 08 by sec. 1 of this Act. 09 * Sec. 19. This Act takes effect July 1, 1996.