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HB 110: "An Act relating to the interest rate applicable to certain amounts due for fees, taxes, and payments made and property delivered to the Department of Revenue; relating to the oil and gas production tax rate; relating to monthly installment payments of estimated oil and gas production tax; relating to oil and gas production tax credits for certain expenditures, including qualified capital credits for exploration, development, and production; relating to the limitation on assessment of oil and gas production taxes; relating to the determination of oil and gas production tax values; making conforming amendments; and providing for an effective date."

00                             HOUSE BILL NO. 110                                                                          
01 "An Act relating to the interest rate applicable to certain amounts due for fees, taxes,                                
02 and payments made and property delivered to the Department of Revenue; relating to                                      
03 the oil and gas production tax rate; relating to monthly installment payments of                                        
04 estimated oil and gas production tax; relating to oil and gas production tax credits for                                
05 certain expenditures, including qualified capital credits for exploration, development,                                 
06 and production; relating to the limitation on assessment of oil and gas production taxes;                               
07 relating to the determination of oil and gas production tax values; making conforming                                   
08 amendments; and providing 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, for                                                                                             
09                 (1)  oil and gas produced from a lease or property containing land                                  
10       that, as of December 31, 2010, was or had previously been within a unit or in                                 
11       commercial production, the tax is equal to [THE SUM OF                                                        
12                 (1)]  the annual production tax value of the taxable oil and gas as                                     
13       calculated under AS 43.55.160(a)(1) multiplied by the tax rate calculated [25                                 
14       PERCENT; AND                                                                                                      
15                 (2)  THE SUM, OVER ALL MONTHS OF THE CALENDAR YEAR,                                                     
16       OF THE TAX AMOUNTS DETERMINED] under (g)(1) [(g)] of this section;                                        
17                 (2)  other oil and gas, the tax is equal to the annual production tax                               
18       value of the taxable oil and gas as calculated under AS 43.55.160(a)(1) multiplied                            
19       by the tax rate calculated under (g)(2) of this section.                                                      
20    * Sec. 7. AS 43.55.011(f) is amended to read:                                                                      
21            (f)  The levy of tax under this section for oil and gas produced north of 68                                 
22       degrees North latitude, other than oil and gas production subject to (i) of this section                          
23       and gas subject to (o) of this section, may not be less than                                                      
24                 (1)  four percent of the gross value at the point of production when the                                
25       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
26       West Coast during the calendar year for which the tax is due is more than $20 [$25];                          
27                 (2)  three percent of the gross value at the point of production when the                               
28       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
29       West Coast during the calendar year for which the tax is due is over $17.50 [$20] but                         
30       not over $20 [$25];                                                                                           
31                 (3)  two percent of the gross value at the point of production when the                                 
01       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
02       West Coast during the calendar year for which the tax is due is over $15 [$17.50] but                         
03       not over $17.50 [$20];                                                                                        
04                 (4)  one percent of the gross value at the point of production when the                                 
05       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
06       West Coast during the calendar year for which the tax is due is over $12.50 [$15] but                         
07       not over $15 [$17.50]; or                                                                                     
08                 (5)  zero percent of the gross value at the point of production when the                                
09       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
10       West Coast during the calendar year for which the tax is due is $12.50 [$15] or less.                         
11    * Sec. 8. AS 43.55.011(g) is repealed and reenacted to read:                                                       
12            (g)  The tax rate for a calendar year for                                                                    
13                 (1)  purposes of (e)(1) of this section is equal to the percentage rate                                 
14       obtained by performing the following calculations:                                                                
15                      (A)  calculating for the calendar year the producer's average                                      
16            annual production tax value under AS 43.55.160(a)(1) per BTU equivalent                                      
17            barrel of the taxable oil and gas subject to (e)(1) of this section;                                         
18                      (B)  calculating the fraction, if any, of that average annual                                      
19            production tax value per BTU equivalent barrel that falls within each range of                               
20            incremental production tax value per BTU equivalent barrel in the table set out                              
21            in (D) of this paragraph;                                                                                    
22                      (C)  multiplying each of those fractions by the corresponding                                      
23            incremental rate in the table set out in (D) of this paragraph; and                                          
24                      (D)  adding together the products calculated under (C) of this                                     
25            paragraph; the table of incremental values and incremental rates is as follows:                              
26            Incremental Production Tax Value per                                                                         
27              BTU Equivalent Barrel                Incremental Rate                                                      
28            Not more than $30.00                      25.0 percent                                                       
29            Above $30.00 and not more than $42.50     27.5 percent                                                       
30            Above $42.50 and not more than $55.00     32.5 percent                                                       
31            Above $55.00 and not more than $67.50     37.5 percent                                                       
01            Above $67.50 and not more than $80.00     42.5 percent                                                       
02            Above $80.00 and not more than $92.50     47.5 percent                                                       
03            Above $92.50                              50.0 percent                                                       
04                 (2)  purposes of (e)(2) of this section is equal to the percentage rate                                 
05       obtained by performing the following calculations:                                                                
06                      (A)  calculating for the calendar year the producer's average                                      
07            annual production tax value under AS 43.55.160(a)(1) per BTU equivalent                                      
08            barrel of the taxable oil and gas not subject to (e)(1) of this section;                                     
09                      (B)  calculating the fraction, if any, of that average annual                                      
10            production tax value per BTU equivalent barrel that falls within each range of                               
11            incremental production tax value per BTU equivalent barrel in the table set out                              
12            in (D) of this paragraph;                                                                                    
13                      (C)  multiplying each of those fractions by the corresponding                                      
14            incremental rate in the table set out in (D) of this paragraph; and                                          
15                      (D)  adding together the products calculated under (C) of this                                     
16            paragraph; the table of incremental values and incremental rates is as follows:                              
17            Incremental Production Tax Value per                                                                         
18              BTU Equivalent Barrel                Incremental Rate                                                      
19            Not more than $30.00                      15.0 percent                                                       
20            Above $30.00 and not more than $42.50     17.5 percent                                                       
21            Above $42.50 and not more than $55.00     22.5 percent                                                       
22            Above $55.00 and not more than $67.50     27.5 percent                                                       
23            Above $67.50 and not more than $80.00     32.5 percent                                                       
24            Above $80.00 and not more than $92.50     37.5 percent                                                       
25            Above $92.50                              40.0 percent                                                       
26    * Sec. 9. AS 43.55.020(a) is repealed and reenacted 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 in (A) - (D) of this paragraph, less 1/12 of the tax                                 
03       credits that are allowed by law to be applied against the tax levied by AS 43.55.011(e)                           
04       for the calendar year, but the amount of the installment payment may not be less than                             
05       zero:                                                                                                             
06                      (A)  the sum of the monthly production tax values for the month                                    
07            under AS 43.55.160(a)(2) for the categories described in                                                     
08            AS 43.55.160(a)(1)(B) and (F), multiplied by the tax rate calculated for the                                 
09            calendar year of production under AS 43.55.011(g)(1);                                                        
10                      (B)  the greater of                                                                                
11                           (i)  the sum of the product of the monthly production tax                                     
12                 value for the month under AS 43.55.160(a)(2) for the category                                           
13                 described in AS 43.55.160(a)(1)(A) multiplied by the tax rate                                           
14                 calculated for the calendar year of production under                                                    
15                 AS 43.55.011(g)(1), and the product of the monthly production tax                                       
16                 value for the month under AS 43.55.160(a)(2) for the category                                           
17                 described in AS 43.55.160(a)(1)(G) multiplied by the tax rate                                           
18                 calculated for the calendar year of production under                                                    
19                 AS 43.55.011(g)(2); or                                                                                  
20                           (ii)  zero percent, one percent, two percent, three                                           
21                 percent, or four percent, as applicable under AS 43.55.011(f), of the                                   
22                 gross value at the point of production of the oil and gas, other than gas                               
23                 subject to AS 43.55.011(o), produced during the month from all leases                                   
24                 or properties that include land north of 68 degrees North latitude; for                                 
25                 purposes of this sub-subparagraph, the applicable percentage under                                      
26                 AS 43.55.011(f) is determined by substituting in AS 43.55.011(f)(1) -                                   
27                 (5) the phrase "month for which the installment payment is calculated"                                  
28                 in place of the phrase "calendar year for which the tax is due";                                        
29                      (C)  for oil produced during the month from each lease or                                          
30            property subject to AS 43.55.011(k), for gas produced during the month from                                  
31            each lease or property subject to AS 43.55.011(j), and for gas subject to                                    
01            AS 43.55.011(o) produced during the month from each lease or property, the                                   
02            monthly production tax value for the month calculated under                                                  
03            AS 43.55.160(a)(2) for the categories described in AS 43.55.160(a)(1)(C), (D),                               
04            or (E), respectively, multiplied by                                                                          
05                           (i)  the tax rate calculated for the calendar year of                                         
06                 production under AS 43.55.011(g)(1), for a lease or property subject to                                 
07                 AS 43.55.011(e)(1); or                                                                                  
08                           (ii)  the tax rate calculated for the calendar year of                                        
09                 production under AS 43.55.011(g)(2), for a lease or property not                                        
10                 subject to AS 43.55.011(e)(1); and                                                                      
11                      (D)  the sum of the monthly production tax values for the month                                    
12            under AS 43.55.160(a)(2) for the categories described in                                                     
13            AS 43.55.160(a)(1)(H) and (I), multiplied by the tax rate calculated for the                                 
14            calendar year of production under AS 43.55.011(g)(2);                                                        
15                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
16       produced from a particular lease or property may not exceed the product obtained by                               
17       carrying out the calculation set out in AS 43.55.011(k)(1) or (2), as applicable, for oil,                        
18       or set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas, but                              
19       substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the amount of taxable                             
20       oil produced during the month for the amount of taxable oil produced during the                                   
21       calendar year and substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as                             
22       applicable, the amount of taxable gas produced during the month for the amount of                                 
23       taxable gas produced during the calendar year;                                                                    
24                 (3)  an installment payment of the estimated tax levied by                                              
25       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
26       on the last day of the following month; the amount of the installment payment is the                              
27       sum of                                                                                                            
28                      (A)  the applicable tax rate for oil provided under                                                
29            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
30            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
31            during the month; and                                                                                        
01                      (B)  the applicable tax rate for gas provided under                                                
02            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
03            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
04            during the month;                                                                                            
05                 (4)  any amount of tax levied by AS 43.55.011(e) or (i), net of any                                     
06       credits applied as allowed by law, that exceeds the total of the amounts due as                                   
07       installment payments of estimated tax is due on March 31 of the year following the                                
08       calendar year of production.                                                                                      
09    * Sec. 10. AS 43.55.020(g) is amended to read:                                                                     
10            (g)  Notwithstanding any contrary provision of AS 43.05.225, an unpaid                                       
11       amount of an installment payment required under (a)(1) - (3) of this section that is not                          
12       paid when due bears interest (1) at the rate provided for an underpayment under 26                                
13       U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date                                  
14       the installment payment is due until March 31 following the calendar year of                                      
15       production, and (2) as provided for a delinquent tax under AS 43.05.225(1)                                    
16       [AS 43.05.225] after that March 31. Interest accrued under (1) of this subsection that                            
17       remains unpaid after that March 31 is treated as an addition to tax that bears interest                           
18       under (2) of this subsection. An unpaid amount of tax due under (a)(4) of this section                            
19       that is not paid when due bears interest as provided for a delinquent tax under                                   
20       AS 43.05.225(1) [AS 43.05.225].                                                                               
21    * Sec. 11. AS 43.55.023(a) is amended to read:                                                                     
22            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
23       expenditure as follows:                                                                                           
24                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
25       deductible lease expenditure for purposes of calculating the production tax value of oil                          
26       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
27       AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or                                       
28       explorer that incurs a qualified capital expenditure may also elect to apply a tax credit                         
29       against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that                                       
30       expenditure; [HOWEVER, NOT MORE THAN HALF OF THE TAX CREDIT MAY                                                   
31       BE APPLIED FOR A SINGLE CALENDAR YEAR;]                                                                           
01                 (2)  a producer or explorer may take a credit for a qualified capital                                   
02       expenditure incurred in connection with geological or geophysical exploration or in                               
03       connection with an exploration well only if the producer or explorer                                              
04                      (A)  agrees, in writing, to the applicable provisions of                                           
05            AS 43.55.025(f)(2);                                                                                          
06                      (B)  submits to the Department of Natural Resources all data                                       
07            that would be required to be submitted under AS 43.55.025(f)(2).                                             
08    * Sec. 12. AS 43.55.023(d) is amended to read:                                                                     
09            (d)  Except as limited by (i) of this section, a person that is entitled to take a tax                       
10       credit under this section that wishes to transfer the unused credit to another person or                          
11       obtain a cash payment under AS 43.55.028 may apply to the department for a                                    
12       transferable tax credit certificate [CERTIFICATES]. An application under this                                 
13       subsection must be in a form prescribed by the department and must include                                        
14       supporting information and documentation that the department reasonably requires.                                 
15       The department shall grant or deny an application, or grant an application as to a lesser                         
16       amount than that claimed and deny it as to the excess, not later than 120 days after the                          
17       latest of (1) March 31 of the year following the calendar year in which the qualified                             
18       capital expenditure, well lease expenditure, or carried-forward annual loss for which                         
19       the credit is claimed was incurred; (2) the date the statement required under                                     
20       AS 43.55.030(a) or (e) was filed for the calendar year in which the qualified capital                             
21       expenditure, well lease expenditure, or carried-forward annual loss for which the                             
22       credit is claimed was incurred; or (3) the date the application was received by the                               
23       department. If, based on the information then available to it, the department is                                  
24       reasonably satisfied that the applicant is entitled to a credit, the department shall issue                       
25       the applicant a [TWO] transferable tax credit certificate for [CERTIFICATES,                              
26       EACH FOR HALF OF] the amount of the credit. [THE CREDIT SHOWN ON ONE                                              
27       OF THE TWO CERTIFICATES IS AVAILABLE FOR IMMEDIATE USE. THE                                                       
28       CREDIT SHOWN ON THE SECOND OF THE TWO CERTIFICATES MAY NOT                                                        
29       BE APPLIED AGAINST A TAX FOR A CALENDAR YEAR EARLIER THAN                                                         
30       THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH                                                            
31       THE CERTIFICATE IS ISSUED, AND THE CERTIFICATE MUST CONTAIN A                                                     
01       CONSPICUOUS STATEMENT TO THAT EFFECT.] A certificate issued under this                                            
02       subsection does not expire.                                                                                       
03    * Sec. 13. AS 43.55.023(g) is amended to read:                                                                     
04            (g)  The issuance of a transferable tax credit certificate under (d) or (m) of this                          
05       section or the purchase of a certificate under AS 43.55.028 does not limit the                                    
06       department's ability to later audit a tax credit claim to which the certificate relates or to                     
07       adjust the claim if the department determines, as a result of the audit, that the applicant                       
08       was not entitled to the amount of the credit for which the certificate was issued. The                            
09       tax liability of the applicant under AS 43.55.011(e) and 43.55.017 - 43.55.180 is                                 
10       increased by the amount of the credit that exceeds that to which the applicant was                                
11       entitled, or the applicant's available valid outstanding credits applicable against the tax                       
12       levied by AS 43.55.011(e) are reduced by that amount. If the applicant's tax liability is                         
13       increased under this subsection, the increase bears interest under AS 43.05.225(1)                            
14       [AS 43.05.225] from the date the transferable tax credit certificate was issued. For                              
15       purposes of this subsection, an applicant that is an explorer is considered a producer                            
16       subject to the tax levied by AS 43.55.011(e).                                                                     
17    * Sec. 14. AS 43.55.023(g) is amended to read:                                                                     
18            (g)  The issuance of a transferable tax credit certificate under (d) or former                           
19       (m) of this section or the purchase of a certificate under AS 43.55.028 does not limit                            
20       the department's ability to later audit a tax credit claim to which the certificate relates                       
21       or to adjust the claim if the department determines, as a result of the audit, that the                           
22       applicant was not entitled to the amount of the credit for which the certificate was                              
23       issued. The tax liability of the applicant under AS 43.55.011(e) and 43.55.017 -                                  
24       43.55.180 is increased by the amount of the credit that exceeds that to which the                                 
25       applicant was entitled, or the applicant's available valid outstanding credits applicable                         
26       against the tax levied by AS 43.55.011(e) are reduced by that amount. If the                                      
27       applicant's tax liability is increased under this subsection, the increase bears interest                         
28       under AS 43.05.225(1) from the date the transferable tax credit certificate was issued.                           
29       For purposes of this subsection, an applicant that is an explorer is considered a                                 
30       producer subject to the tax levied by AS 43.55.011(e).                                                            
31    * Sec. 15. AS 43.55.023(l) is amended to read:                                                                     
01            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
02       expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH                                                      
03       LATITUDE] after December 31, 2011 [JUNE 30, 2010], as follows:                                                
04                 (1)  notwithstanding that a well lease expenditure [INCURRED IN                                         
05       THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] may be a deductible                                                 
06       lease expenditure for purposes of calculating the production tax value of oil and gas                             
07       under AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this                            
08       section, AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer                                 
09       or explorer that incurs a well lease expenditure [IN THE STATE SOUTH OF 68                                        
10       DEGREES NORTH LATITUDE] may elect to apply a tax credit against a tax levied                                      
11       by AS 43.55.011(e) in the amount of 40 percent of that expenditure; [A TAX CREDIT                                 
12       UNDER THIS PARAGRAPH MAY BE APPLIED FOR A SINGLE CALENDAR                                                         
13       YEAR;]                                                                                                            
14                 (2)  a producer or explorer may take a credit for a well lease                                          
15       expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH                                                      
16       LATITUDE] in connection with geological or geophysical exploration or in                                          
17       connection with an exploration well only if the producer or explorer                                              
18                      (A)  agrees, in writing, to the applicable provisions of                                           
19       AS 43.55.025(f)(2); and                                                                                           
20                      (B)  submits to the Department of Natural Resources all data                                       
21            that would be required to be submitted under AS 43.55.025(f)(2).                                             
22    * Sec. 16. AS 43.55.023(n) is amended to read:                                                                     
23            (n)  For the purposes of (l) [AND (m)] of this section, a well lease expenditure                             
24       [INCURRED IN THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] is a                                                   
25       lease expenditure that is                                                                                         
26                 (1)  directly related to an exploration well, a stratigraphic test well, a                              
27       producing well, or an injection well other than a disposal well, [LOCATED IN THE                                  
28       STATE SOUTH OF 68 DEGREES NORTH LATITUDE,] if the expenditure is a                                                
29       qualified capital expenditure and an intangible drilling and development cost                                     
30       authorized under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R.                                     
31       1.612-4, regardless of the elections made under 26 U.S.C. 263(c); in this paragraph, an                           
01       expenditure directly related to a well includes an expenditure for well sidetracking,                             
02       well deepening, well completion or recompletion, or well workover, regardless of                                  
03       whether the well is or has been a producing well; or                                                              
04                 (2)  an expense for seismic work conducted within the boundaries of a                                   
05       production or exploration unit.                                                                                   
06    * Sec. 17. AS 43.55.028(e) is amended to read:                                                                     
07            (e)  The department, on the written application of a person to whom a                                        
08       transferable tax credit certificate has been issued under AS 43.55.023(d) or former                           
09       (m) or to whom a production tax credit certificate has been issued under                                          
10       AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                                    
11       purchase, in whole or in part, the certificate if the department finds that                                       
12                 (1)  the calendar year of the purchase is not earlier than the first                                    
13       calendar year for which the credit shown on the certificate would otherwise be allowed                            
14       to be applied against a tax;                                                                                      
15                 (2)  [REPEALED.                                                                                         
16                 (3)  REPEALED.                                                                                          
17                 (4)]  the applicant does not have an outstanding liability to the state for                             
18       unpaid delinquent taxes under this title;                                                                         
19                 (3) [(5)]  the applicant's total tax liability under AS 43.55.011(e), after                         
20       application of all available tax credits, for the calendar year in which the application is                       
21       made is zero;                                                                                                     
22                 (4) [(6)]  the applicant's average daily production of oil and gas taxable                          
23       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
24       the application is made was not more than 50,000 BTU equivalent barrels; and                                      
25                 (5) [(7)]  the purchase is consistent with this section and regulations                             
26       adopted under this section.                                                                                       
27    * Sec. 18. AS 43.55.028(g) is amended to read:                                                                     
28            (g)  The department may adopt regulations to carry out the purposes of this                                  
29       section, including standards and procedures to allocate available money among                                     
30       applications for purchases under this chapter and claims for refunds under                                        
31       AS 43.20.046 when the total amount of the applications for purchase and claims for                                
01       refund exceed the amount of available money in the fund. The regulations adopted by                               
02       the department may not, when allocating available money in the fund under this                                    
03       section, distinguish an application for the purchase of a credit certificate issued under                         
04       former AS 43.55.023(m) or a claim for refund under AS 43.20.046.                                              
05    * Sec. 19. AS 43.55.075(a) is amended to read:                                                                     
06            (a)  Except as provided in AS 43.05.260(c), the amount of a tax imposed by                                   
07       this chapter must be assessed within four [SIX] years after the return was filed.                             
08    * Sec. 20. AS 43.55.160(a) is repealed and reenacted to read:                                                      
09            (a)  Except as provided in (b) of this section, for the purposes of                                          
10                 (1)  AS 43.55.011(e), the annual production tax value of taxable oil,                                   
11       gas, or oil and gas produced by a producer during a calendar year, in a given category                            
12       for which a separate production tax value is required to be calculated under this                                 
13       paragraph, is equal to the gross value at the point of production of that oil, gas, or oil                        
14       and gas, respectively, taxable under AS 43.55.011(e), less the producer's lease                                   
15       expenditures under AS 43.55.165 for the calendar year that are applicable to the oil,                             
16       gas, or oil and gas, respectively, in that category produced by the producer during the                           
17       calendar year, as adjusted under AS 43.55.170; a separate annual production tax value                             
18       must be calculated for                                                                                            
19                      (A)  oil and gas, other than gas produced before 2022 and used                                     
20            in the state, produced in aggregate from all leases or properties in the state that                        
21            include land north of 68 degrees North latitude and are subject to                                           
22            AS 43.55.011(e)(1);                                                                                          
23                      (B)  oil and gas, other than gas produced before 2022 and used                                     
24            in the state, produced in aggregate from all leases or properties in the state that                          
25            are subject to AS 43.55.011(e)(1) and are described in AS 43.55.024(a), during                               
26            a calendar year before or during the last calendar year under AS 43.55.024(b)                                
27            for which the producer could take a tax credit under AS 43.55.024(a);                                        
28                      (C)  oil produced before 2022 from each lease or property in the                                   
29            Cook Inlet sedimentary basin;                                                                                
30                      (D)  gas produced before 2022 from each lease or property in                                       
31            the Cook Inlet sedimentary basin;                                                                            
01                      (E)  gas produced before 2022 from each lease or property in                                       
02            the state outside the Cook Inlet sedimentary basin and used in the state;                                    
03                      (F)  oil and gas produced in aggregate from all leases or                                          
04            properties in the state that do not include land north of 68 degrees North                                 
05            latitude and are subject to AS 43.55.011(e)(1); this subparagraph does not                                   
06            apply to                                                                                                     
07                           (i)  gas that is produced before 2022 and used in the                                         
08                 state;                                                                                                  
09                           (ii)  oil or gas that is produced before 2022 from a lease                                    
10                 or property in the Cook Inlet sedimentary basin;                                                        
11                           (iii)  oil or gas that is produced from a lease or property                                   
12                 described in AS 43.55.024(a) during a calendar year before or during                                    
13                 the last calendar year under AS 43.55.024(b) for which the producer                                     
14                 could take a tax credit under AS 43.55.024(a);                                                          
15                      (G)  oil and gas, other than gas produced before 2022 and used                                     
16            in the state, produced in aggregate from all leases or properties in the state that                        
17            include land north of 68 degrees North latitude and are not subject to                                       
18            AS 43.55.011(e)(1);                                                                                          
19                      (H)  oil and gas, other than gas produced before 2022 and used                                     
20            in the state, produced in aggregate from all leases or properties in the state that                          
21            are not subject to AS 43.55.011(e)(1) and are described in AS 43.55.024(a),                                  
22            during a calendar year before or during the last calendar year under                                         
23            AS 43.55.024(b) for which the producer could take a tax credit under                                         
24            AS 43.55.024(a);                                                                                             
25                      (I)  oil and gas produced in aggregate from all leases or                                          
26            properties in the state that do not include land north of 68 degrees North                                 
27            latitude and are not subject to AS 43.55.011(e)(1); this subparagraph does not                               
28            apply to                                                                                                     
29                           (i)  gas that is produced before 2022 and used in the                                         
30                 state;                                                                                                  
31                           (ii)  oil or gas that is produced before 2022 from a lease                                    
01                 or property in the Cook Inlet sedimentary basin;                                                        
02                           (iii)  oil or gas that is produced from a lease or property                                   
03                 described in AS 43.55.024(a) during a calendar year before or during                                    
04                 the last calendar year under AS 43.55.024(b) for which the producer                                     
05                 could take a tax credit under AS 43.55.024(a);                                                          
06                 (2)  AS 43.55.020(a), the monthly production tax value of taxable oil,                                  
07       gas, or oil and gas produced by a producer during a month, in a given category for                                
08       which a separate production tax value is required to be calculated under this                                     
09       paragraph, is equal to the gross value at the point of production of that oil, gas, or oil                        
10       and gas, respectively, taxable under AS 43.55.011(e), less 1/12 of the producer's lease                           
11       expenditures under AS 43.55.165 for the calendar year that are applicable to the oil,                             
12       gas, or oil and gas, respectively, in that category produced by the producer during the                           
13       calendar year, as adjusted under AS 43.55.170; a separate monthly production tax                                  
14       value must be calculated for each of the categories for which a separate annual                                   
15       production tax value is required to be calculated under (1) of this subsection.                                   
16    * Sec. 21. AS 43.56.160 is amended to read:                                                                        
17            Sec. 43.56.160. Interest and penalty. When the tax levied by AS 43.56.010(a)                               
18       becomes delinquent, a penalty of 10 percent shall be added. Interest on the delinquent                            
19       taxes, exclusive of penalty, shall be assessed at the rate specified in AS 43.05.225(1)                       
20       [A RATE OF EIGHT PERCENT A YEAR].                                                                                 
21    * Sec. 22. AS 43.77.020(d) is amended to read:                                                                     
22            (d)  A person subject to the tax under this chapter shall make quarterly                                     
23       payments of the tax estimated to be due for the year, as required under regulations                               
24       adopted by the department. A taxpayer will be subject to an estimated tax penalty,                                
25       determined by applying the interest rate specified in AS 43.05.225(1) [AS 43.05.225]                          
26       to the underpayment for each quarter, unless the taxpayer makes estimated tax                                     
27       payments in equal installments that total either                                                                  
28                 (1)  at least 90 percent of the taxpayer's tax liability under this chapter                             
29       for the tax year; or                                                                                              
30                 (2)  at least 100 percent of the taxpayer's tax liability under this chapter                            
31       for the prior tax year.                                                                                           
01    * Sec. 23. AS 43.90.430 is amended to read:                                                                        
02            Sec. 43.90.430. Interest. When a payment due to the state under this chapter                               
03       becomes delinquent, the payment bears interest at the rate applicable to a delinquent                             
04       tax under AS 43.05.225(1) [AS 43.05.225].                                                                     
05    * Sec. 24. AS 43.55.023(m) is repealed.                                                                            
06    * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to                         
07 read:                                                                                                                   
08       APPLICABILITY. (a) Sections 11, 12, 15, and 16 of this Act apply to expenditures                                  
09 incurred after December 31, 2011.                                                                                       
10       (b)  Sections 6 - 9 and 20 of this Act apply to oil and gas produced after December 31,                           
11 2012.                                                                                                                   
12       (c)  Section 19 of this Act applies to any tax liability for the production of oil and gas                        
13 after December 31, 2013.                                                                                                
14    * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to                         
15 read:                                                                                                                   
16       TRANSITION: REGULATIONS. The Department of Revenue may proceed to adopt                                           
17 regulations to implement this Act. The regulations take effect under AS 44.62 (Administrative                           
18 Procedure Act), but not before the effective date of the provision of this Act implemented by                           
19 the regulation.                                                                                                         
20    * Sec. 27. Sections 11, 12, 14 - 18, 24, and 25(a) of this Act take effect January 1, 2012.                        
21    * Sec. 28. Sections 6 - 9, 20, and 25(b) of this Act take effect January 1, 2013.                                  
22    * Sec. 29. Sections 19 and 25(c) of this Act take effect January 1, 2014.                                          
23    * Sec. 30. Except as provided in secs. 27 - 29 of this Act, this Act takes effect July 1, 2011.