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CSHB 110(RES): "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, including qualified capital credits for exploration, development, and production; relating to certain additional nontransferable oil and gas production tax credits; relating to the determination of oil and gas production tax values; relating to the disclosure of certain tax information; making conforming amendments; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 110(RES)                                                                    
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,                                   
05 including qualified capital credits for exploration, development, and production;                                       
06 relating to certain additional nontransferable oil and gas production tax credits; relating                             
07 to the determination of oil and gas production tax values; relating to the disclosure of                                
08 certain tax information; making conforming amendments; and providing for an                                             
09 effective date."                                                                                                        
10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
11    * Section 1. AS 05.15.095(c) is amended to read:                                                                   
12            (c)  A delinquent fee bears interest at the rate set by AS 43.05.225(2)                                  
01       [AS 43.05.225].                                                                                                   
02    * Sec. 2. AS 34.45.470(a) is amended to read:                                                                      
03            (a)  A person who fails to pay or deliver property within the time prescribed by                             
04       this chapter may be required to pay to the department interest at the annual rate                                 
05       calculated under AS 43.05.225(2) [AS 43.05.225] on the property or the value of it                            
06       from the date the property should have been paid or delivered.                                                    
07    * Sec. 3. AS 43.05.225 is amended to read:                                                                         
08            Sec. 43.05.225. Interest. Unless otherwise provided,                                                       
09                 (1)  when a tax levied in this title becomes delinquent, it bears interest                              
10       in a calendar quarter at the rate of three [FIVE] percentage points above the annual                          
11       rate charged member banks for advances by the 12th Federal Reserve District as of the                             
12       first day of that calendar quarter, or at the annual rate of 11 percent, whichever is                             
13       lesser [GREATER], compounded quarterly as of the last day of that quarter;                                    
14                 (2)  the interest rate is 12 percent a year for                                                         
15                      (A)  delinquent fees payable under AS 05.15.095(c); and                                        
16                      (B)  [REPEALED AND                                                                                 
17                      (C)]  unclaimed property that is not timely paid or delivered, as                                  
18            allowed by AS 34.45.470(a).                                                                                  
19    * Sec. 4. AS 43.20.046(i) is amended to read:                                                                      
20            (i)  The issuance of a refund under this section does not limit the department's                             
21       ability to later audit or adjust the claim if the department determines, as a result of the                       
22       audit, that the person that claimed the credit was not entitled to the amount of the                              
23       credit. The tax liability of the person receiving the credit under this chapter is                                
24       increased by the amount of the credit that exceeds that to which the person was                                   
25       entitled. If the tax liability is increased under this subsection, the increase bears                             
26       interest under AS 43.05.225(1) [AS 43.05.225] from the date the refund was issued.                            
27    * Sec. 5. AS 43.50.570 is amended to read:                                                                         
28            Sec. 43.50.570. Interest. A licensee who fails to pay an amount due for the                                
29       purchase of stamps within the time required                                                                       
30                 (1)  is considered to have failed to pay the cigarette taxes due under this                             
31       chapter; and                                                                                                      
01                 (2)  shall pay interest at the rate established under AS 43.05.225(1)                               
02       [AS 43.05.225] from the date on which the amount became due until the date of                                     
03       payment.                                                                                                          
04    * Sec. 6. AS 43.55.011(e) is amended to read:                                                                      
05            (e)  There is levied on the producer of oil or gas a tax for all oil and gas                                 
06       produced each calendar year from each lease or property in the state, less any oil and                            
07       gas the ownership or right to which is exempt from taxation or constitutes a                                      
08       landowner's royalty interest. Except as otherwise provided under (f), (j), (k), and (o) of                        
09       this section, for                                                                                             
10                 (1)  oil and gas produced from a lease or property containing land                                  
11       that, as of December 31, 2008, was within a unit or in commercial production, the                             
12       tax is equal to [THE SUM OF                                                                                       
13                 (1)]  the annual production tax value of the taxable oil and gas as                                     
14       calculated under AS 43.55.160(a)(1) multiplied by the tax rate calculated [25                                 
15       PERCENT; AND                                                                                                      
16                 (2)  THE SUM, OVER ALL MONTHS OF THE CALENDAR YEAR,                                                     
17       OF THE TAX AMOUNTS DETERMINED] under (g)(1) [(g)] of this section;                                        
18                 (2)  other oil and gas, the tax is equal to the annual production tax                               
19       value of the taxable oil and gas as calculated under AS 43.55.160(a)(1) multiplied                            
20       by the tax rate calculated under (g)(2) of this section.                                                      
21    * Sec. 7. AS 43.55.011(f) is amended to read:                                                                      
22            (f)  The levy of tax under this section for oil and gas produced north of 68                                 
23       degrees North latitude, other than oil and gas production subject to (i) of this section                          
24       and gas subject to (o) of this section, may not be less than                                                      
25                 (1)  four percent of the gross value at the point of production when the                                
26       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
27       West Coast during the calendar year for which the tax is due is more than $20 [$25];                          
28                 (2)  three percent of the gross value at the point of production when the                               
29       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
30       West Coast during the calendar year for which the tax is due is over $17.50 [$20] but                         
31       not over $20 [$25];                                                                                           
01                 (3)  two percent of the gross value at the point of production when the                                 
02       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
03       West Coast during the calendar year for which the tax is due is over $15 [$17.50] but                         
04       not over $17.50 [$20];                                                                                        
05                 (4)  one percent of the gross value at the point of production when the                                 
06       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
07       West Coast during the calendar year for which the tax is due is over $12.50 [$15] but                         
08       not over $15 [$17.50]; or                                                                                     
09                 (5)  zero percent of the gross value at the point of production when the                                
10       average price per barrel for Alaska North Slope crude oil for sale on the United States                           
11       West Coast during the calendar year for which the tax is due is $12.50 [$15] or less.                         
12    * Sec. 8. AS 43.55.011(g) is repealed and reenacted to read:                                                       
13            (g)  The tax rate for a calendar year for purposes of                                                        
14                 (1)  (e)(1) of this section is equal to the percentage rate obtained by                                 
15       performing the following calculations:                                                                            
16                      (A)  calculating, for the calendar year, the producer's average                                    
17            annual production tax value under AS 43.55.160(a)(1) for each BTU                                            
18            equivalent barrel of the taxable oil and gas subject to (e)(1) of this section;                              
19                      (B)  calculating the fraction, if any, of that average annual                                      
20            production tax value for each BTU equivalent barrel that falls within each                                   
21            range of incremental production tax value for each BTU equivalent barrel in                                  
22            the table set out in (D) of this paragraph;                                                                  
23                      (C)  multiplying each of those fractions by the corresponding                                      
24            incremental rate in the table set out in (D) of this paragraph; and                                          
25                      (D)  adding together the products calculated under (C) of this                                     
26            paragraph; the table of incremental values and incremental rates is as follows:                              
27            Incremental Production Tax Value for each                                                                    
28              BTU Equivalent Barrel                Incremental Rate                                                      
29            Not more than $30                          25 percent                                                        
30            More than $30 but not more than $42.50    27.5 percent                                                       
31            More than $42.50 but not more than $55    32.5 percent                                                       
01            More than $55 but not more than $67.50    37.5 percent                                                       
02            More than $67.50 but not more than $80    42.5 percent                                                       
03            More than $80 but not more than $92.50    47.5 percent                                                       
04            More than $92.50                           50 percent                                                        
05                 (2)  (e)(2) of this section is equal to the percentage rate obtained by                                 
06       performing the following calculations:                                                                            
07                      (A)  calculating, for the calendar year, the producer's average                                    
08            annual production tax value under AS 43.55.160(a)(1) for each BTU                                            
09            equivalent barrel of the taxable oil and gas not subject to (e)(1) of this section;                          
10                      (B)  calculating the fraction, if any, of that average annual                                      
11            production tax value for each BTU equivalent barrel that falls within each                                   
12            range of incremental production tax value for each BTU equivalent barrel in                                  
13            the table set out in (D) of this paragraph;                                                                  
14                      (C)  multiplying each of those fractions by the corresponding                                      
15            incremental rate in the table set out in (D) of this paragraph; and                                          
16                      (D)  adding together the products calculated under (C) of this                                     
17            paragraph; the table of incremental values and incremental rates is as follows:                              
18            Incremental Production Tax Value for each                                                                    
19              BTU Equivalent Barrel                Incremental Rate                                                      
20            Not more than $30                          15 percent                                                        
21            More than $30 but not more than $42.50    17.5 percent                                                       
22            More than $42.50 but not more than $55    22.5 percent                                                       
23            More than $55 but not more than $67.50    27.5 percent                                                       
24            More than $67.50 but not more than $80    32.5 percent                                                       
25            More than $80 but not more than $92.50    37.5 percent                                                       
26            More than $92.50                           40 percent                                                        
27    * Sec. 9. AS 43.55.020(a) is repealed and reenacted to read:                                                       
28            (a)  For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i)                              
29       shall pay the tax as follows:                                                                                     
30                 (1)  an installment payment of the estimated tax levied by                                              
31       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
01       month of the calendar year on the last day of the following month; except as otherwise                            
02       provided under (2) of this subsection, the amount of the installment payment is the                               
03       sum of the amounts calculated in (A) - (D) of this paragraph, less 1/12 of the tax                                
04       credits that are allowed by law to be applied against the tax levied by AS 43.55.011(e)                           
05       for the calendar year, but the amount of the installment payment may not be less than                             
06       zero:                                                                                                             
07                      (A)  the sum of the monthly production tax values for the month                                    
08            under AS 43.55.160(a)(2) for the categories described in                                                     
09            AS 43.55.160(a)(1)(B) and (F), multiplied by the tax rate calculated for the                                 
10            calendar year of production under AS 43.55.011(g)(1);                                                        
11                      (B)  the greater of                                                                                
12                           (i)  the sum of the product of the monthly production tax                                     
13                 value for the month under AS 43.55.160(a)(2) for the category                                           
14                 described in AS 43.55.160(a)(1)(A) multiplied by the tax rate                                           
15                 calculated for the calendar year of production under                                                    
16                 AS 43.55.011(g)(1), and the product of the monthly production tax                                       
17                 value for the month under AS 43.55.160(a)(2) for the category                                           
18                 described in AS 43.55.160(a)(1)(G) multiplied by the tax rate                                           
19                 calculated for the calendar year of production under                                                    
20                 AS 43.55.011(g)(2); or                                                                                  
21                           (ii)  zero percent, one percent, two percent, three                                           
22                 percent, or four percent, as applicable under AS 43.55.011(f), of the                                   
23                 gross value at the point of production of the oil and gas, other than gas                               
24                 subject to AS 43.55.011(o), produced during the month from all leases                                   
25                 or properties that include land north of 68 degrees North latitude; for                                 
26                 purposes of this sub-subparagraph, the applicable percentage under                                      
27                 AS 43.55.011(f) is determined by substituting in AS 43.55.011(f)(1) -                                   
28                 (5) the phrase "month for which the installment payment is calculated"                                  
29                 in place of the phrase "calendar year for which the tax is due";                                        
30                      (C)  for oil produced during the month from each lease or                                          
31            property subject to AS 43.55.011(k), for gas produced during the month from                                  
01            each lease or property subject to AS 43.55.011(j), and for gas subject to                                    
02            AS 43.55.011(o) produced during the month from each lease or property, the                                   
03            monthly production tax value for the month calculated under                                                  
04            AS 43.55.160(a)(2) for the categories described in AS 43.55.160(a)(1)(C), (D),                               
05            or (E), respectively, multiplied by                                                                          
06                           (i)  the tax rate calculated for the calendar year of                                         
07                 production under AS 43.55.011(g)(1), for a lease or property subject to                                 
08                 AS 43.55.011(e)(1); or                                                                                  
09                           (ii)  the tax rate calculated for the calendar year of                                        
10                 production under AS 43.55.011(g)(2), for a lease or property not                                        
11                 subject to AS 43.55.011(e)(1); and                                                                      
12                      (D)  the sum of the monthly production tax values for the month                                    
13            under AS 43.55.160(a)(2) for the categories described in                                                     
14            AS 43.55.160(a)(1)(H) and (I), multiplied by the tax rate calculated for the                                 
15            calendar year of production under AS 43.55.011(g)(2);                                                        
16                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
17       produced from a particular lease or property may not exceed the product obtained by                               
18       carrying out the calculation set out in AS 43.55.011(k)(1) or (2), as applicable, for oil,                        
19       or set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas, but                              
20       substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the amount of taxable                             
21       oil produced during the month for the amount of taxable oil produced during the                                   
22       calendar year and substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as                             
23       applicable, the amount of taxable gas produced during the month for the amount of                                 
24       taxable gas produced during the calendar year;                                                                    
25                 (3)  an installment payment of the estimated tax levied by                                              
26       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
27       on the last day of the following month; the amount of the installment payment is the                              
28       sum of                                                                                                            
29                      (A)  the applicable tax rate for oil provided under                                                
30            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
31            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
01            during the month; and                                                                                        
02                      (B)  the applicable tax rate for gas provided under                                                
03            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
04            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
05            during the month;                                                                                            
06                 (4)  any amount of tax levied by AS 43.55.011(e) or (i), net of any                                     
07       credits applied as allowed by law, that exceeds the total of the amounts due as                                   
08       installment payments of estimated tax is due on March 31 of the year following the                                
09       calendar year of production.                                                                                      
10    * Sec. 10. AS 43.55.020(g) is amended to read:                                                                     
11            (g)  Notwithstanding any contrary provision of AS 43.05.225, an unpaid                                       
12       amount of an installment payment required under (a)(1) - (3) of this section that is not                          
13       paid when due bears interest (1) at the rate provided for an underpayment under 26                                
14       U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date                                  
15       the installment payment is due until March 31 following the calendar year of                                      
16       production, and (2) as provided for a delinquent tax under AS 43.05.225(1)                                    
17       [AS 43.05.225] after that March 31. Interest accrued under (1) of this subsection that                            
18       remains unpaid after that March 31 is treated as an addition to tax that bears interest                           
19       under (2) of this subsection. An unpaid amount of tax due under (a)(4) of this section                            
20       that is not paid when due bears interest as provided for a delinquent tax under                                   
21       AS 43.05.225(1) [AS 43.05.225].                                                                               
22    * Sec. 11. AS 43.55.023(a) is amended to read:                                                                     
23            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
24       expenditure as follows:                                                                                           
25                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
26       deductible lease expenditure for purposes of calculating the production tax value of oil                          
27       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
28       AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or                                       
29       explorer that incurs a qualified capital expenditure may also elect to apply a tax credit                         
30       against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that                                       
31       expenditure; [HOWEVER, NOT MORE THAN HALF OF THE TAX CREDIT MAY                                                   
01       BE APPLIED FOR A SINGLE CALENDAR YEAR;]                                                                           
02                 (2)  a producer or explorer may take a credit for a qualified capital                                   
03       expenditure incurred in connection with geological or geophysical exploration or in                               
04       connection with an exploration well only if the producer or explorer                                              
05                      (A)  agrees, in writing, to the applicable provisions of                                           
06            AS 43.55.025(f)(2);                                                                                          
07                      (B)  submits to the Department of Natural Resources all data                                       
08            that would be required to be submitted under AS 43.55.025(f)(2).                                             
09    * Sec. 12. AS 43.55.023(d) is amended to read:                                                                     
10            (d)  Except as limited by (i) of this section, a person that is entitled to take a tax                       
11       credit under this section that wishes to transfer the unused credit to another person or                          
12       obtain a cash payment under AS 43.55.028 may apply to the department for                                          
13       transferable tax credit certificate [CERTIFICATES]. An application under this                                 
14       subsection must be in a form prescribed by the department and must include                                        
15       supporting information and documentation that the department reasonably requires.                                 
16       The department shall grant or deny an application, or grant an application as to a lesser                         
17       amount than that claimed and deny it as to the excess, not later than 120 days after the                          
18       latest of (1) March 31 of the year following the calendar year in which the qualified                             
19       capital expenditure, well lease expenditure, or carried-forward annual loss for which                         
20       the credit is claimed was incurred; (2) the date the statement required under                                     
21       AS 43.55.030(a) or (e) was filed for the calendar year in which the qualified capital                             
22       expenditure, well lease expenditure, or carried-forward annual loss for which the                             
23       credit is claimed was incurred; or (3) the date the application was received by the                               
24       department. If, based on the information then available to it, the department is                                  
25       reasonably satisfied that the applicant is entitled to a credit, the department shall issue                       
26       the applicant a [TWO] transferable tax credit certificate for [CERTIFICATES,                              
27       EACH FOR HALF OF] the amount of the credit. [THE CREDIT SHOWN ON ONE                                              
28       OF THE TWO CERTIFICATES IS AVAILABLE FOR IMMEDIATE USE. THE                                                       
29       CREDIT SHOWN ON THE SECOND OF THE TWO CERTIFICATES MAY NOT                                                        
30       BE APPLIED AGAINST A TAX FOR A CALENDAR YEAR EARLIER THAN                                                         
31       THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH                                                            
01       THE CERTIFICATE IS ISSUED, AND THE CERTIFICATE MUST CONTAIN A                                                     
02       CONSPICUOUS STATEMENT TO THAT EFFECT.] A certificate issued under this                                            
03       subsection does not expire.                                                                                       
04    * Sec. 13. AS 43.55.023(g) is amended to read:                                                                     
05            (g)  The issuance of a transferable tax credit certificate under (d) or (m) of this                          
06       section or the purchase of a certificate under AS 43.55.028 does not limit the                                    
07       department's ability to later audit a tax credit claim to which the certificate relates or to                     
08       adjust the claim if the department determines, as a result of the audit, that the applicant                       
09       was not entitled to the amount of the credit for which the certificate was issued. The                            
10       tax liability of the applicant under AS 43.55.011(e) and 43.55.017 - 43.55.180 is                                 
11       increased by the amount of the credit that exceeds that to which the applicant was                                
12       entitled, or the applicant's available valid outstanding credits applicable against the tax                       
13       levied by AS 43.55.011(e) are reduced by that amount. If the applicant's tax liability is                         
14       increased under this subsection, the increase bears interest under AS 43.05.225(1)                            
15       [AS 43.05.225] from the date the transferable tax credit certificate was issued. For                              
16       purposes of this subsection, an applicant that is an explorer is considered a producer                            
17       subject to the tax levied by AS 43.55.011(e).                                                                     
18    * Sec. 14. AS 43.55.023(g) is amended to read:                                                                     
19            (g)  The issuance of a transferable tax credit certificate under (d) of this                             
20       section or former (m) of this section or the purchase of a certificate under                              
21       AS 43.55.028 does not limit the department's ability to later audit a tax credit claim to                         
22       which the certificate relates or to adjust the claim if the department determines, as a                           
23       result of the audit, that the applicant was not entitled to the amount of the credit for                          
24       which the certificate was issued. The tax liability of the applicant under                                        
25       AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased by the amount of the credit                                
26       that exceeds that to which the applicant was entitled, or the applicant's available valid                         
27       outstanding credits applicable against the tax levied by AS 43.55.011(e) are reduced                              
28       by that amount. If the applicant's tax liability is increased under this subsection, the                          
29       increase bears interest under AS 43.05.225(1) from the date the transferable tax credit                           
30       certificate was issued. For purposes of this subsection, an applicant that is an explorer                         
31       is considered a producer subject to the tax levied by AS 43.55.011(e).                                            
01    * Sec. 15. AS 43.55.023(l) is amended to read:                                                                     
02            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
03       expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH                                                      
04       LATITUDE] after December 31, 2011 [JUNE 30, 2010], as follows:                                                
05                 (1)  notwithstanding that a well lease expenditure [INCURRED IN                                         
06       THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] may be a deductible                                                 
07       lease expenditure for purposes of calculating the production tax value of oil and gas                             
08       under AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this                            
09       section, AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer                                 
10       or explorer that incurs a well lease expenditure [IN THE STATE SOUTH OF 68                                        
11       DEGREES NORTH LATITUDE] may elect to apply a tax credit against a tax levied                                      
12       by AS 43.55.011(e) in the amount of 40 percent of that expenditure; [A TAX CREDIT                                 
13       UNDER THIS PARAGRAPH MAY BE APPLIED FOR A SINGLE CALENDAR                                                         
14       YEAR;]                                                                                                            
15                 (2)  a producer or explorer may take a credit for a well lease                                          
16       expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH                                                      
17       LATITUDE] in connection with geological or geophysical exploration or in                                          
18       connection with an exploration well only if the producer or explorer                                              
19                      (A)  agrees, in writing, to the applicable provisions of                                           
20            AS 43.55.025(f)(2); and                                                                                      
21                      (B)  submits to the Department of Natural Resources all data                                       
22            that would be required to be submitted under AS 43.55.025(f)(2).                                             
23    * Sec. 16. AS 43.55.023(n) is amended to read:                                                                     
24            (n)  For the purposes of (l) [AND (m)] of this section, a well lease expenditure                             
25       [INCURRED IN THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] is a                                                   
26       lease expenditure that is                                                                                         
27                 (1)  directly related to an exploration well, a stratigraphic test well, a                              
28       producing well, or an injection well other than a disposal well, [LOCATED IN THE                                  
29       STATE SOUTH OF 68 DEGREES NORTH LATITUDE,] if the expenditure is a                                                
30       qualified capital expenditure and an intangible drilling and development cost                                     
31       authorized under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R.                                     
01       1.612-4, regardless of the elections made under 26 U.S.C. 263(c); in this paragraph, an                           
02       expenditure directly related to a well includes an expenditure for well sidetracking,                             
03       well deepening, well completion or recompletion, or well workover, regardless of                                  
04       whether the well is or has been a producing well; or                                                              
05                 (2)  an expense for seismic work conducted within the boundaries of a                                   
06       production or exploration unit.                                                                                   
07    * Sec. 17. AS 43.55.023 is amended by adding a new subsection to read:                                             
08            (p)  A producer that incurs more than 80 percent of its wage and compensation                                
09       expenditures for wages and compensation paid to Alaska residents may take a tax                                   
10       credit against the tax levied under AS 43.55.011(e) equal to the percentage by which                              
11       the wages and compensation paid to Alaska residents exceeds 80 percent of all wages                               
12       and compensation paid by the producer in the state. The department, in consultation                               
13       with the Department of Labor and Workforce Development, shall adopt regulations                                   
14       necessary to administer the credit authorized by this subsection. Notwithstanding (c)                             
15       of this section, the unused amount of credit under this subsection may not be carried                             
16       forward for more than two years, and, notwithstanding (d), (e), and (g) of this section,                          
17       a producer may not transfer a tax credit or obtain a transferable tax credit certificate                          
18       for a credit authorized under this subsection. In this subsection, "Alaska resident" has                          
19       the meaning given in AS 43.82.230.                                                                                
20    * Sec. 18. AS 43.55.024(b) is amended to read:                                                                     
21            (b)  A producer may not take a tax credit under (a) of this section for any                                  
22       calendar year after the later of                                                                                  
23                 (1)  2021 [2016]; or                                                                                
24                 (2)  the ninth calendar year after the calendar year during which the                                   
25       producer first has commercial oil or gas production before May 1, 2021 [2016], from                           
26       at least one lease or property in the state outside the Cook Inlet sedimentary basin, no                          
27       part of which is north of 68 degrees North latitude, if the producer did not have                                 
28       commercial oil or gas production from a lease or property in the state outside the Cook                           
29       Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, before                           
30       April 1, 2006.                                                                                                    
31    * Sec. 19. AS 43.55.024(c) is amended to read:                                                                     
01            (c)  For a calendar year for which a producer's tax liability under                                          
02       AS 43.55.011(e) exceeds zero before application of any credits under this chapter,                                
03       other than a credit under (a) of this section but after application of any credit under (a)                       
04       of this section, a producer that is qualified under (e) of this section and whose average                         
05       amount of oil and gas produced a day and taxable under AS 43.55.011(e) is less than                               
06       100,000 BTU equivalent barrels a day may apply a tax credit under this subsection                                 
07       against that liability. A producer whose average amount of oil and gas produced a day                             
08       and taxable under AS 43.55.011(e) is                                                                              
09                 (1)  not more than 50,000 BTU equivalent barrels may apply a tax                                        
10       credit of not more than $15,000,000 [$12,000,000] for the calendar year;                                      
11                 (2)  more than 50,000 and less than 100,000 BTU equivalent barrels                                      
12       may apply a tax credit of not more than $15,000,000 [$12,000,000] multiplied by the                           
13       following fraction for the calendar year:                                                                         
14       1 - [2 X (AP - 50,000)] / 100,000                                                                                 
15       where AP = the average amount of oil and gas taxable under AS 43.55.011(e),                                       
16 produced a day during the calendar year in BTU equivalent barrels.                                                      
17    * Sec. 20. AS 43.55.024(d) is amended to read:                                                                     
18            (d)  A producer may not take a tax credit under (c) of this section for any                                  
19       calendar year after the later of                                                                                  
20                 (1)  2021 [2016]; or                                                                                
21                 (2)  if the producer did not have commercial oil or gas production from                                 
22       a lease or property in the state before April 1, 2006, the ninth calendar year after the                          
23       calendar year during which the producer first has commercial oil or gas production                                
24       before May 1, 2021 [2016], from at least one lease or property in the state.                                  
25    * Sec. 21. AS 43.55.025(a) is amended to read:                                                                     
26            (a)  Subject to the terms and conditions of this section, a credit against the                               
27       production tax levied by AS 43.55.011(e) is allowed for exploration expenditures that                             
28       qualify under (b) of this section in an amount equal to one of the following:                                     
29                 (1)  30 percent of the total exploration expenditures that qualify only                                 
30       under (b) and (c) of this section;                                                                                
31                 (2)  30 percent of the total exploration expenditures that qualify only                                 
01       under (b) and (d) of this section;                                                                                
02                 (3)  40 percent of the total exploration expenditures that qualify under                                
03       (b), (c), and (d) of this section;                                                                                
04                 (4)  40 percent of the total exploration expenditures that qualify only                                 
05       under (b) and (e) of this section; [OR]                                                                           
06                 (5)  80, 90, or 100 percent, or a lesser amount described in (l) of this                                
07       section, of the total exploration expenditures described in (b)(1) and (2) of this section                        
08       and not excluded by (b)(3) and (4) of this section that qualify only under (l) of this                            
09       section; or                                                                                                   
10                 (6)  30 percent of the total exploration expenditures that qualify                                  
11       only under (b) and (n) of this section.                                                                       
12    * Sec. 22. AS 43.55.025(b) is amended to read:                                                                     
13            (b)  To qualify for the production tax credit under (a) of this section, an                                  
14       exploration expenditure must be incurred for work performed after June 30, 2008, and                              
15       before July 1, 2021 [2016], and                                                                               
16                 (1)  may be for seismic or other geophysical exploration costs not                                      
17       connected with a specific well;                                                                                   
18                 (2)  if for an exploration well,                                                                        
19                      (A)  must be incurred by an explorer that holds an interest in the                                 
20            exploration well for which the production tax credit is claimed;                                             
21                      (B)  may be for either a well that encounters an oil or gas                                        
22            deposit or a dry hole;                                                                                       
23                      (C)  must be for a well that has been completed, suspended, or                                     
24            abandoned at the time the explorer claims the tax credit under (f) of this                                   
25            section; and                                                                                                 
26                      (D)  must be for goods, services, or rentals of personal property                                  
27            reasonably required for the surface preparation, drilling, casing, cementing,                                
28            and logging of an exploration well, and, in the case of a dry hole, for the                                  
29            expenses required for abandonment if the well is abandoned within 18 months                                  
30            after the date the well was spudded;                                                                         
31                 (3)  may not be for administration, supervision, engineering, or lease                                  
01       operating costs; geological or management costs; community relations or                                           
02       environmental costs; bonuses, taxes, or other payments to governments related to the                              
03       well; costs, including repairs and replacements, arising from or associated with fraud,                           
04       wilful misconduct, gross negligence, criminal negligence, or violation of law,                                    
05       including a violation of 33 U.S.C. 1319(c)(1) or 1321(b)(3) (Clean Water Act); or                                 
06       other costs that are generally recognized as indirect costs or financing costs; and                               
07                 (4)  may not be incurred for an exploration well or seismic exploration                                 
08       that is included in a plan of exploration or a plan of development for any unit before                            
09       May 14, 2003.                                                                                                     
10    * Sec. 23. AS 43.55.025(k) is amended to read:                                                                     
11            (k)  Subject to the terms and conditions of this section, if a claim is filed under                          
12       (f)(1) of this section before January 1, 2021 [2016], a credit against the production tax                     
13       levied by AS 43.55.011(e) is allowed in an amount equal to five percent of an eligible                            
14       expenditure under this subsection incurred for seismic exploration performed before                               
15       July 1, 2003. To be eligible under this subsection, an expenditure must                                           
16                 (1)  have been for seismic exploration that                                                             
17                      (A)  obtained data that the commissioner of natural resources                                      
18            considers to be in the best interest of the state to acquire for public distribution;                        
19            and                                                                                                          
20                      (B)  was conducted outside the boundaries of a production unit;                                    
21            however, the amount of the expenditure that is otherwise eligible under this                                 
22            section is reduced proportionately by the portion of the seismic exploration                                 
23            activity that crossed into a production unit; and                                                            
24                 (2)  qualify under (b)(3) of this section.                                                              
25    * Sec. 24. AS 43.55.025 is amended by adding a new subsection to read:                                             
26            (n)  To be eligible for the 30 percent production tax credit authorized by (a)(6)                            
27       of this section, exploration expenditures must be for a well drilled north of 68 degrees                          
28       North latitude that is                                                                                            
29                 (1)  outside of a unit; or                                                                              
30                 (2)  within a unit formed after June 30, 2008, and the exploration                                      
31       expenditures are incurred before the later of the date that is four years after the date                          
01       the                                                                                                               
02                      (A)  unit is formed; or                                                                            
03                      (B)  first exploration well is drilled on a lease or property that is                              
04            within the unit.                                                                                             
05    * Sec. 25. AS 43.55.028(e) is amended to read:                                                                     
06            (e)  The department, on the written application of a person to whom a                                        
07       transferable tax credit certificate has been issued under AS 43.55.023(d) or former                           
08       AS 43.55.023(m) [(m)] or to whom a production tax credit certificate has been issued                          
09       under AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                              
10       purchase, in whole or in part, the certificate if the department finds that                                       
11                 (1)  the calendar year of the purchase is not earlier than the first                                    
12       calendar year for which the credit shown on the certificate would otherwise be allowed                            
13       to be applied against a tax;                                                                                      
14                 (2)  [REPEALED                                                                                          
15                 (3)  REPEALED                                                                                           
16                 (4)]  the applicant does not have an outstanding liability to the state for                             
17       unpaid delinquent taxes under this title;                                                                         
18                 (3) [(5)]  the applicant's total tax liability under AS 43.55.011(e), after                         
19       application of all available tax credits, for the calendar year in which the application is                       
20       made is zero;                                                                                                     
21                 (4) [(6)]  the applicant's average daily production of oil and gas taxable                          
22       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
23       the application is made was not more than 50,000 BTU equivalent barrels; and                                      
24                 (5) [(7)]  the purchase is consistent with this section and regulations                             
25       adopted under this section.                                                                                       
26    * Sec. 26. AS 43.55.028(g) is amended to read:                                                                     
27            (g)  The department may adopt regulations to carry out the purposes of this                                  
28       section, including standards and procedures to allocate available money among                                     
29       applications for purchases under this chapter and claims for refunds under                                        
30       AS 43.20.046 when the total amount of the applications for purchase and claims for                                
31       refund exceed the amount of available money in the fund. The regulations adopted by                               
01       the department may not, when allocating available money in the fund under this                                    
02       section, distinguish an application for the purchase of a credit certificate issued under                         
03       former AS 43.55.023(m) or a claim for refund under AS 43.20.046.                                              
04    * Sec. 27. AS 43.55.160(a) is repealed and reenacted to read:                                                      
05            (a)  Except as provided in (b) of this section, for the purposes of                                          
06                 (1)  AS 43.55.011(e), the annual production tax value of taxable oil,                                   
07       gas, or oil and gas produced by a producer during a calendar year, in a given category                            
08       for 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 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 annual production tax value                             
14       must be calculated for                                                                                            
15                      (A)  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 subject to                                           
18            AS 43.55.011(e)(1);                                                                                          
19                      (B)  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 subject to AS 43.55.011(e)(1) and are described in AS 43.55.024(a), during                               
22            a calendar year before or during the last calendar year under AS 43.55.024(b)                                
23            for which the producer could take a tax credit under AS 43.55.024(a);                                        
24                      (C)  oil produced before 2022 from each lease or property in the                                   
25            Cook Inlet sedimentary basin;                                                                                
26                      (D)  gas produced before 2022 from each lease or property in                                       
27            the Cook Inlet sedimentary basin;                                                                            
28                      (E)  gas produced before 2022 from each lease or property in                                       
29            the state outside the Cook Inlet sedimentary basin and used in the state;                                    
30                      (F)  oil and gas produced in aggregate from all leases or                                          
31            properties in the state that do not include land north of 68 degrees North                                 
01            latitude and are subject to AS 43.55.011(e)(1); this subparagraph does not                                   
02            apply to                                                                                                     
03                           (i)  gas that is produced before 2022 and used in the                                         
04                 state;                                                                                                  
05                           (ii)  oil or gas that is produced before 2022 from a lease                                    
06                 or property in the Cook Inlet sedimentary basin;                                                        
07                           (iii)  oil or gas that is produced from a lease or property                                   
08                 described in AS 43.55.024(a) during a calendar year before or during                                    
09                 the last calendar year under AS 43.55.024(b) for which the producer                                     
10                 could take a tax credit under AS 43.55.024(a);                                                          
11                      (G)  oil and gas, other than gas produced before 2022 and used                                     
12            in the state, produced in aggregate from all leases or properties in the state that                        
13            include land north of 68 degrees North latitude and are not subject to                                       
14            AS 43.55.011(e)(1);                                                                                          
15                      (H)  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            are not subject to AS 43.55.011(e)(1) and are described in AS 43.55.024(a),                                  
18            during a calendar year before or during the last calendar year under                                         
19            AS 43.55.024(b) for which the producer could take a tax credit under                                         
20            AS 43.55.024(a);                                                                                             
21                      (I)  oil and gas produced in aggregate from all leases or                                          
22            properties in the state that do not include land north of 68 degrees North                                 
23            latitude and are not subject to AS 43.55.011(e)(1); this subparagraph does not                               
24            apply to                                                                                                     
25                           (i)  gas that is produced before 2022 and used in the                                         
26                 state;                                                                                                  
27                           (ii)  oil or gas that is produced before 2022 from a lease                                    
28                 or property in the Cook Inlet sedimentary basin;                                                        
29                           (iii)  oil or gas that is produced from a lease or property                                   
30                 described in AS 43.55.024(a) during a calendar year before or during                                    
31                 the last calendar year under AS 43.55.024(b) for which the producer                                     
01                 could take a tax credit under AS 43.55.024(a);                                                          
02                 (2)  AS 43.55.020(a), the monthly production tax value of taxable oil,                                  
03       gas, or oil and gas produced by a producer during a month, in a given category for                                
04       which a separate production tax value is required to be calculated under this                                     
05       paragraph, is equal to the gross value at the point of production of that oil, gas, or oil                        
06       and gas, respectively, taxable under AS 43.55.011(e), less 1/12 of the producer's lease                           
07       expenditures under AS 43.55.165 for the calendar year that are applicable to the oil,                             
08       gas, or oil and gas, respectively, in that category produced by the producer during the                           
09       calendar year, as adjusted under AS 43.55.170; a separate monthly production tax                                  
10       value must be calculated for each of the categories for which a separate annual                                   
11       production tax value is required to be calculated under (1) of this subsection.                                   
12    * Sec. 28. AS 43.55.890 is amended to read:                                                                        
13            Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary                                
14       provision of AS 40.25.100, and regardless of whether the information is considered                                
15       under AS 43.05.230(e) to constitute statistics classified to prevent the identification of                        
16       particular returns or reports, the department may publish the following information                               
17       under this chapter, if aggregated among three or more producers or explorers,                                     
18       showing, by month or calendar year and by lease or property, unit, or area of the state:                      
19                 (1)  the amount of oil or gas production;                                                               
20                 (2)  the amount of taxes levied under this chapter or paid under this                                   
21       chapter;                                                                                                          
22                 (3)  the effective tax rates under this chapter;                                                        
23                 (4)  the gross value of oil or gas at the point of production;                                          
24                 (5)  the transportation costs for oil or gas;                                                           
25                 (6)  qualified capital expenditures, as defined in AS 43.55.023;                                        
26                 (7)  exploration expenditures under AS 43.55.025;                                                       
27                 (8)  production tax values of oil or gas under AS 43.55.160;                                            
28                 (9)  lease expenditures under AS 43.55.165;                                                             
29                 (10)  adjustments to lease expenditures under AS 43.55.170;                                             
30                 (11)  tax credits applicable or potentially applicable against taxes levied                             
31       by this chapter; the information relating to tax credits under this paragraph, to                             
01       the extent the information is available to the department, must include the                                   
02       statutory authority for each type of credit taken, the amount of credits taken                                
03       under each statute authorizing a tax credit, and whether the credit is for an                                 
04       expenditure related to oil or gas exploration, development, or production,                                    
05       including the drilling of wells; performing work on existing wells; conducting                                
06       geological or geophysical exploration; acquiring, constructing, or installing new                             
07       facilities or equipment; and maintaining, repairing, or replacing existing facilities                         
08       or equipment.                                                                                                 
09    * Sec. 29. AS 43.56.160 is amended to read:                                                                        
10            Sec. 43.56.160. Interest and penalty. When the tax levied by AS 43.56.010(a)                               
11       becomes delinquent, a penalty of 10 percent shall be added. Interest on the delinquent                            
12       taxes, exclusive of penalty, shall be assessed at the rate specified in AS 43.05.225(1)                       
13       [A RATE OF EIGHT PERCENT A YEAR].                                                                                 
14    * Sec. 30. AS 43.77.020(d) is amended to read:                                                                     
15            (d)  A person subject to the tax under this chapter shall make quarterly                                     
16       payments of the tax estimated to be due for the year, as required under regulations                               
17       adopted by the department. A taxpayer will be subject to an estimated tax penalty,                                
18       determined by applying the interest rate specified in AS 43.05.225(1) [AS 43.05.225]                          
19       to the underpayment for each quarter, unless the taxpayer makes estimated tax                                     
20       payments in equal installments that total either                                                                  
21                 (1)  at least 90 percent of the taxpayer's tax liability under this chapter                             
22       for the tax year; or                                                                                              
23                 (2)  at least 100 percent of the taxpayer's tax liability under this chapter                            
24       for the prior tax year.                                                                                           
25    * Sec. 31. AS 43.90.430 is amended to read:                                                                        
26            Sec. 43.90.430. Interest. When a payment due to the state under this chapter                               
27       becomes delinquent, the payment bears interest at the rate applicable to a delinquent                             
28       tax under AS 43.05.225(1) [AS 43.05.225].                                                                     
29    * Sec. 32. AS 43.55.023(m) is repealed.                                                                            
30    * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to                         
31 read:                                                                                                                   
01       APPLICABILITY. (a) Sections 11 and 12 of this Act apply to expenditures incurred                                  
02 after December 31, 2010.                                                                                                
03       (b)  Sections 15 - 17, 21, and 24 of this Act apply to expenditures incurred after                                
04 December 31, 2011.                                                                                                      
05       (c)  Sections 6 - 9 and 27 of this Act apply to oil and gas produced after December 31,                           
06 2012.                                                                                                                   
07    * Sec. 34. The uncodified law of the State of Alaska is amended by adding a new section to                         
08 read:                                                                                                                   
09       TRANSITION: REGULATIONS. The Department of Revenue may adopt regulations                                          
10 to implement this Act. The regulations take effect under AS 44.62 (Administrative Procedure                             
11 Act), but not before the effective date of the provision of this Act implemented by the                                 
12 regulation.                                                                                                             
13    * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to                         
14 read:                                                                                                                   
15       RETROACTIVITY. Sections 11 and 12 of this Act are retroactive to January 1, 2011.                                 
16    * Sec. 36. Sections 14 - 17, 21, 24 - 28, 32, and 33(b) of this Act take effect January 1,                         
17 2012.                                                                                                                   
18    * Sec. 37. Sections 6 - 9, 27, and 33(c) of this Act take effect January 1, 2013.                                  
19    * Sec. 38. Sections 11, 12, 33(a), and 35 of this Act take effect immediately under                                
20 AS 01.10.070(c).                                                                                                        
21    * Sec. 39. Except as provided in secs. 36 - 38 of this Act, this Act takes effect July 1, 2011.