CSSB 242(RES): "An Act providing income tax credits for geothermal resource exploration and development."
00 CS FOR SENATE BILL NO. 242(RES) 01 "An Act providing income tax credits for geothermal resource exploration and 02 development." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 43.20 is amended by adding a new section to article 1 to read: 05 Sec. 43.20.046. Geothermal resource tax credits. (a) In addition to any other 06 credit authorized to the person by this chapter, a person may take a credit against the 07 tax due under this chapter for geothermal resource exploration and development as 08 provided by this section. 09 (b) A person is eligible for a geothermal resource exploration credit for 10 qualified exploration expenditures incurred after the effective date of this section and 11 before July 1, 2018, in the amount of 30 percent of the qualified exploration 12 expenditures incurred for exploration for a geothermal resource. An unused 13 geothermal resource exploration credit may not be carried forward for more than 20 14 years immediately following the year in which the exploration expenditure was
01 incurred. 02 (c) A person is eligible for a geothermal resource development credit in the 03 amount of 30 percent of the qualified development expenditures incurred to develop a 04 geothermal resource. An unused geothermal resource credit may not be carried 05 forward for more than 20 years immediately following the year in which the 06 geothermal resource is first used to generate gross income. 07 (d) A credit under (b) or (c) of this section may be transferred to a person who 08 is a successor in interest in the geothermal resource project that resulted from the 09 exploration qualifying for an exploration credit under (b) of this section or qualifying 10 for a development credit under (c) of this section. Subject to appropriation, an unused 11 credit for 12 (1) an exploration expenditure under (b) of this section is refundable 13 on an annual basis; 14 (2) a development expenditure under (c) of this section is refundable 15 after the geothermal resource first generates gross income. 16 (e) A person that receives a credit under (b) or (c) of this section, 17 (1) shall reduce a cost related to the geothermal resource that would 18 otherwise be included in a proceeding for determining a just and reasonable rate under 19 AS 42.05.381 by the amount of the credit; and 20 (2) may not elect to be exempt from the provisions of AS 42.05. 21 (f) In this section, 22 (1) "geothermal resource" has the meaning given to "geothermal 23 resources" in AS 38.05.965; 24 (2) "qualified development expenditure" means an expenditure 25 (A) incurred after two wells capable of commercial production 26 have been drilled, completed, and flow tested; 27 (B) to develop a known geothermal resource; and 28 (C) that is reasonable and necessary 29 (i) to acquire, lease, or rent real property, including an 30 expenditure for engineering services, surveying, title insurance, 31 recording fees, legal services, site improvements, site restoration,
01 access roads, and fencing; 02 (ii) for the construction of the facility to develop and 03 use the geothermal resource, including an expenditure for drilling 04 development wells; materials; labor; travel and transportation related to 05 facility design; and the costs of startup, commissioning, and testing; 06 (iii) for equipment used in the operation of the facility; 07 (iv) for safety measures and environmental protection; 08 (v) for financial and legal services related to obtaining 09 licenses and permits and preparing an environmental impact statement; 10 (vi) for capitalized interest during the construction 11 period; 12 (3) "qualified exploration expenditure" means an expenditure 13 (A) to explore a geothermal resource; and 14 (B) that is reasonable and necessary for goods, services, or 15 rental of personal property required for the surface preparation, drilling, and 16 assessment of the commercial potential of a geothermal resource.