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CSHB 110(FIN): "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 the 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 disclosure of certain tax information; making conforming amendments; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 110(FIN)                                                                    
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 the oil                                
04 and gas production tax; relating to oil and gas production tax credits, including                                       
05 qualified capital credits for exploration, development, and production; relating to                                     
06 certain additional nontransferable oil and gas production tax credits; relating to the                                  
07 disclosure of certain tax information; making conforming amendments; and providing                                      
08 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, the tax is equal to the sum of                                                                      
09                 [(1)]  the annual production tax value of the taxable oil and gas                                     
10                 (1)  produced from a lease or property not described in (2) of this                                 
11       subsection as calculated under AS 43.55.160(a)(1) multiplied by 25 percent, and the                       
12       sum, over all months of the calendar year, of the tax amounts determined under                                
13       (g)(1) of this section; and                                                                                   
14                 (2)  produced during the first seven consecutive years after the                                    
15       start of sustained production or produced during the first seven years after the                              
16       effective date of this bill section, whichever is later, from a lease or property                             
17       containing land that was not or previously had not been within a unit or in                                   
18       commercial production as of December 31, 2008, as calculated under                                            
19       AS 43.55.160(a)(1) multiplied by 15 percent, and the sum, over all months of the                              
20       calendar year, of the tax amounts determined under (g)(2) [(g)] of this section; in this                  
21       paragraph, "sustained production" has the meaning given in AS 43.55.025(l).                                   
22    * Sec. 7. AS 43.55.011(g) is repealed and reenacted to read:                                                       
23            (g)  For each month of the calendar year for which the producer's average                                    
24       monthly production tax value under AS 43.55.160(a)(2) for each BTU equivalent                                     
25       barrel of the taxable oil and gas is more than $30, the amount of tax for purposes                                
26                 (1)  of (e)(1) of this section is determined by multiplying the monthly                                 
27       production tax value of the taxable oil and gas produced during the month by the                                  
28       following tax rates, as applicable:                                                                               
29                      (A)  if the producer's average monthly production tax value of a                                   
30            BTU equivalent barrel of the taxable oil and gas for the month is not more than                              
31            $42.50, the tax rate is 2.5 percent of the difference between that average                                   
01            monthly production tax value of a BTU equivalent barrel and $30;                                             
02                      (B)  if the producer's average monthly production tax value of a                                   
03            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
04            $42.50 but not more than $55, the tax rates are                                                              
05                           (i)  2.5 percent on the first $12.50 of monthly production                                    
06                 tax value for each BTU equivalent barrel that is greater than $30; and                                  
07                           (ii)  7.5 percent of the monthly production tax value for                                     
08                 each BTU equivalent barrel that is greater than $42.50;                                                 
09                      (C)  if the producer's average monthly production tax value of a                                   
10            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
11            $55 but not more than $67.50, the tax rates are                                                              
12                           (i)  2.5 percent on the first $12.50 of monthly production                                    
13                 tax value for each BTU equivalent barrel that is greater than $30;                                      
14                           (ii)  7.5 percent of the next higher $12.50 of monthly                                        
15                 production tax value for each BTU equivalent barrel; and                                                
16                           (iii)  12.5 percent of the monthly production tax value                                       
17                 for each BTU equivalent barrel that is greater than $55;                                                
18                      (D)  if the producer's average monthly production tax value of a                                   
19            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
20            $67.50 but not more than $80, the tax rates are                                                              
21                           (i)  2.5 percent on the first $12.50 of monthly production                                    
22                 tax value for each BTU equivalent barrel that is greater than $30;                                      
23                           (ii)  7.5 percent of the next higher $12.50 of monthly                                        
24                 production tax value for each BTU equivalent barrel;                                                    
25                           (iii)  12.5 percent of the next higher $12.50 of monthly                                      
26                 production tax value for each BTU equivalent barrel;                                                    
27                           (iv)  17.5 percent of the monthly production tax value                                        
28                 for each BTU equivalent barrel that is greater than $67.50;                                             
29                      (E)  if the producer's average monthly production tax value of a                                   
30            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
31            $80 but not more than $92.50, the tax rates are                                                              
01                           (i)  2.5 percent on the first $12.50 of monthly production                                    
02                 tax value for each BTU equivalent barrel that is greater than $30;                                      
03                           (ii)  7.5 percent of the next higher $12.50 of monthly                                        
04                 production tax value for each BTU equivalent barrel;                                                    
05                           (iii)  12.5 percent of the next higher $12.50 of monthly                                      
06                 production tax value for each BTU equivalent barrel;                                                    
07                           (iv)  17.5 percent of the next higher $12.50 of monthly                                       
08                 production tax value for each BTU equivalent barrel; and                                                
09                           (v)  22.5 percent of the monthly production tax value for                                     
10                 each BTU equivalent barrel that is greater than $80;                                                    
11                      (F)  if the producer's average monthly production tax value of a                                   
12            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
13            $92.50, the tax rates are                                                                                    
14                           (i)  2.5 percent on the first $12.50 of monthly production                                    
15                 tax value for each BTU equivalent barrel that is greater than $30;                                      
16                           (ii)  7.5 percent of the next higher $12.50 of monthly                                        
17                 production tax value for each BTU equivalent barrel;                                                    
18                           (iii)  12.5 percent of the next higher $12.50 of monthly                                      
19                 production tax value for each BTU equivalent barrel;                                                    
20                           (iv)  17.5 percent of the next higher $12.50 of monthly                                       
21                 production tax value for each BTU equivalent barrel;                                                    
22                           (v)  22.5 percent of the next higher $12.50 of monthly                                        
23                 production tax value for each BTU equivalent barrel; and                                                
24                           (vi)  25 percent of the monthly production tax value for                                      
25                 each BTU equivalent barrel that is greater than $92.50;                                                 
26                 (2)  of (e)(2) of this section is determined by multiplying the monthly                                 
27       production tax value of the taxable oil and gas produced during the month by the                                  
28       following tax rates, as applicable:                                                                               
29                      (A)  if the producer's average monthly production tax value of a                                   
30            BTU equivalent barrel of the taxable oil and gas for the month is not more than                              
31            $42.50, the tax rate is 2.5 percent of the difference between that average                                   
01            monthly production tax value of a BTU equivalent barrel and $30;                                             
02                      (B)  if the producer's average monthly production tax value of a                                   
03            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
04            $42.50 but not more than $55, the tax rates are                                                              
05                           (i)  2.5 percent on the first $12.50 of monthly production                                    
06                 tax value for each BTU equivalent barrel that is greater than $30; and                                  
07                           (ii)  7.5 percent of the monthly production tax value for                                     
08                 each BTU equivalent barrel that is greater than $42.50;                                                 
09                      (C)  if the producer's average monthly production tax value of a                                   
10            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
11            $55 but not more than $67.50, the tax rates are                                                              
12                           (i)  2.5 percent on the first $12.50 of monthly production                                    
13                 tax value for each BTU equivalent barrel that is greater than $30;                                      
14                           (ii)  7.5 percent of the next higher $12.50 of monthly                                        
15                 production tax value for each BTU equivalent barrel; and                                                
16                           (iii)  12.5 percent of the monthly production tax value                                       
17                 for each BTU equivalent barrel that is greater than $55;                                                
18                      (D)  if the producer's average monthly production tax value of a                                   
19            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
20            $67.50 but not more than $80, the tax rates are                                                              
21                           (i)  2.5 percent on the first $12.50 of monthly production                                    
22                 tax value for each BTU equivalent barrel that is greater than $30;                                      
23                           (ii)  7.5 percent of the next higher $12.50 of monthly                                        
24                 production tax value for each BTU equivalent barrel;                                                    
25                           (iii)  12.5 percent of the next higher $12.50 of monthly                                      
26                 production tax value for each BTU equivalent barrel;                                                    
27                           (iv)  17.5 percent of the monthly production tax value                                        
28                 for each BTU equivalent barrel that is greater than $67.50;                                             
29                      (E)  if the producer's average monthly production tax value of a                                   
30            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
31            $80 but not more than $92.50, the tax rates are                                                              
01                           (i)  2.5 percent on the first $12.50 of monthly production                                    
02                 tax value for each BTU equivalent barrel that is greater than $30;                                      
03                           (ii)  7.5 percent of the next higher $12.50 of monthly                                        
04                 production tax value for each BTU equivalent barrel;                                                    
05                           (iii)  12.5 percent of the next higher $12.50 of monthly                                      
06                 production tax value for each BTU equivalent barrel;                                                    
07                           (iv)  17.5 percent of the next higher $12.50 of monthly                                       
08                 production tax value for each BTU equivalent barrel; and                                                
09                           (v)  22.5 percent of the monthly production tax value for                                     
10                 each BTU equivalent barrel that is greater than $80;                                                    
11                      (F)  if the producer's average monthly production tax value of a                                   
12            BTU equivalent barrel of the taxable oil and gas for the month is more than                                  
13            $92.50, the tax rates are                                                                                    
14                           (i)  2.5 percent on the first $12.50 of monthly production                                    
15                 tax value for each BTU equivalent barrel that is greater than $30;                                      
16                           (ii)  7.5 percent of the next higher $12.50 of monthly                                        
17                 production tax value for each BTU equivalent barrel;                                                    
18                           (iii)  12.5 percent of the next higher $12.50 of monthly                                      
19                 production tax value for each BTU equivalent barrel;                                                    
20                           (iv)  17.5 percent of the next higher $12.50 of monthly                                       
21                 production tax value for each BTU equivalent barrel;                                                    
22                           (v)  22.5 percent of the next higher $12.50 of monthly                                        
23                 production tax value for each BTU equivalent barrel; and                                                
24                           (vi)  25 percent of the monthly production tax value for                                      
25                 each BTU equivalent barrel that is greater than $92.50.                                                 
26    * Sec. 8. AS 43.55.020(a) is amended 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, less 1/12 of the tax credits that are allowed by law to be                          
03       applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                           
04       of the installment payment may not be less than zero:                                                             
05                      (A)  for oil and gas produced from leases or properties in the                                     
06            state outside the Cook Inlet sedimentary basin but not subject to                                            
07            AS 43.55.011(o), other than leases or properties subject to AS 43.55.011(f), the                             
08            greater of                                                                                                   
09                           (i)  zero; or                                                                                 
10                           (ii)  the applicable tax rates in AS 43.55.011(e), as                                     
11                 applicable, and 43.55.011(g), as applicable, applied to [SUM OF 25                                  
12                 PERCENT AND THE TAX RATE CALCULATED FOR THE                                                             
13                 MONTH UNDER AS 43.55.011(g) MULTIPLIED BY] the remainder                                                
14                 obtained by subtracting 1/12 of the producer's adjusted lease                                           
15                 expenditures for the calendar year of production under AS 43.55.165                                     
16                 and 43.55.170 that are deductible for the leases or properties under                                    
17                 AS 43.55.160 from the gross value at the point of production of the oil                                 
18                 and gas produced from the leases or properties during the month for                                     
19                 which the installment payment is calculated;                                                            
20                      (B)  for oil and gas produced from leases or properties subject                                    
21            to AS 43.55.011(f), the greatest of                                                                          
22                           (i)  zero;                                                                                    
23                           (ii)  zero percent, one percent, two percent, three                                           
24                 percent, or four percent, as applicable, of the gross value at the point of                             
25                 production of the oil and gas produced from all leases or properties                                    
26                 during the month for which the installment payment is calculated; or                                    
27                           (iii)  the applicable tax rates in AS 43.55.011(e), as                                    
28                 applicable, and 43.55.011(g), as applicable, applied to [SUM OF 25                                  
29                 PERCENT AND THE TAX RATE CALCULATED FOR THE                                                             
30                 MONTH UNDER AS 43.55.011(g) MULTIPLIED BY] the remainder                                                
31                 obtained by subtracting 1/12 of the producer's adjusted lease                                           
01                 expenditures for the calendar year of production under AS 43.55.165                                     
02                 and 43.55.170 that are deductible for those leases or properties under                                  
03                 AS 43.55.160 from the gross value at the point of production of the oil                                 
04                 and gas produced from those leases or properties during the month for                                   
05                 which the installment payment is calculated;                                                            
06                      (C)  for oil and gas produced from each lease or property                                          
07            subject to AS 43.55.011(j), (k), or (o), the greater of                                                      
08                           (i)  zero; or                                                                                 
09                           (ii)  the applicable tax rates in AS 43.55.011(e), as                                     
10                 applicable, and 43.55.011(g), as applicable, applied to [SUM OF 25                                  
11                 PERCENT AND THE TAX RATE CALCULATED FOR THE                                                             
12                 MONTH UNDER AS 43.55.011(g) MULTIPLIED BY] the remainder                                                
13                 obtained by subtracting 1/12 of the producer's adjusted lease                                           
14                 expenditures for the calendar year of production under AS 43.55.165                                     
15                 and 43.55.170 that are deductible under AS 43.55.160 for oil or gas,                                    
16                 respectively, produced from the lease or property from the gross value                                  
17                 at the point of production of the oil or gas, respectively, produced from                               
18                 the lease or property during the month for which the installment                                        
19                 payment is calculated;                                                                                  
20                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
21       produced from a lease or property subject to AS 43.55.011(j), (k), or (o) may not                                 
22       exceed the product obtained by carrying out the calculation set out in                                            
23       AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas or set out in                                   
24       AS 43.55.011(k)(1) or (2), as applicable, for oil, but substituting in                                            
25       AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                             
26       gas produced during the month for the amount of taxable gas produced during the                                   
27       calendar year and substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the                             
28       amount of taxable oil produced during the month for the amount of taxable oil                                     
29       produced during the calendar year;                                                                                
30                 (3)  an installment payment of the estimated tax levied by                                              
31       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
01       on the last day of the following month; the amount of the installment payment is the                              
02       sum of                                                                                                            
03                      (A)  the applicable tax rate for oil provided under                                                
04            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
05            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
06            during the month; and                                                                                        
07                      (B)  the applicable tax rate for gas provided under                                                
08            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
09            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
10            during the month;                                                                                            
11                 (4)  any amount of tax levied by AS 43.55.011(e) or (i), net of any                                     
12       credits applied as allowed by law, that exceeds the total of the amounts due as                                   
13       installment payments of estimated tax is due on March 31 of the year following the                                
14       calendar year of production.                                                                                      
15    * Sec. 9. AS 43.55.020(g) is amended to read:                                                                      
16            (g)  Notwithstanding any contrary provision of AS 43.05.225, an unpaid                                       
17       amount of an installment payment required under (a)(1) - (3) of this section that is not                          
18       paid when due bears interest (1) at the rate provided for an underpayment under 26                                
19       U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date                                  
20       the installment payment is due until March 31 following the calendar year of                                      
21       production, and (2) as provided for a delinquent tax under AS 43.05.225(1)                                    
22       [AS 43.05.225] after that March 31. Interest accrued under (1) of this subsection that                            
23       remains unpaid after that March 31 is treated as an addition to tax that bears interest                           
24       under (2) of this subsection. An unpaid amount of tax due under (a)(4) of this section                            
25       that is not paid when due bears interest as provided for a delinquent tax under                                   
26       AS 43.05.225(1) [AS 43.05.225].                                                                               
27    * Sec. 10. AS 43.55.023(a) is amended to read:                                                                     
28            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
29       expenditure as follows:                                                                                           
30                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
31       deductible lease expenditure for purposes of calculating the production tax value of oil                          
01       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
02       AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or                                       
03       explorer that incurs a qualified capital expenditure may also elect to apply a tax credit                         
04       against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that                                       
05       expenditure; [HOWEVER, NOT MORE THAN HALF OF THE TAX CREDIT MAY                                                   
06       BE APPLIED FOR A SINGLE CALENDAR YEAR;]                                                                           
07                 (2)  a producer or explorer may take a credit for a qualified capital                                   
08       expenditure incurred in connection with geological or geophysical exploration or in                               
09       connection with an exploration well only if the producer or explorer                                              
10                      (A)  agrees, in writing, to the applicable provisions of                                           
11            AS 43.55.025(f)(2);                                                                                          
12                      (B)  submits to the Department of Natural Resources all data                                       
13            that would be required to be submitted under AS 43.55.025(f)(2).                                             
14    * Sec. 11. AS 43.55.023(d) is amended to read:                                                                     
15            (d)  Except as limited by (i) of this section, a person that is entitled to take a tax                       
16       credit under this section that wishes to transfer the unused credit to another person or                          
17       obtain a cash payment under AS 43.55.028 may apply to the department for a                                    
18       transferable tax credit certificate [CERTIFICATES]. An application under this                                 
19       subsection must be in a form prescribed by the department and must include                                        
20       supporting information and documentation that the department reasonably requires.                                 
21       The department shall grant or deny an application, or grant an application as to a lesser                         
22       amount than that claimed and deny it as to the excess, not later than 120 days after the                          
23       latest of (1) March 31 of the year following the calendar year in which the qualified                             
24       capital expenditure, well lease expenditure, or carried-forward annual loss for which                         
25       the credit is claimed was incurred; (2) the date the statement required under                                     
26       AS 43.55.030(a) or (e) was filed for the calendar year in which the qualified capital                             
27       expenditure, well lease expenditure, or carried-forward annual loss for which the                             
28       credit is claimed was incurred; or (3) the date the application was received by the                               
29       department. If, based on the information then available to it, the department is                                  
30       reasonably satisfied that the applicant is entitled to a credit, the department shall issue                       
31       the applicant a [TWO] transferable tax credit certificate for [CERTIFICATES,                              
01       EACH FOR HALF OF] the amount of the credit. [THE CREDIT SHOWN ON ONE                                              
02       OF THE TWO CERTIFICATES IS AVAILABLE FOR IMMEDIATE USE. THE                                                       
03       CREDIT SHOWN ON THE SECOND OF THE TWO CERTIFICATES MAY NOT                                                        
04       BE APPLIED AGAINST A TAX FOR A CALENDAR YEAR EARLIER THAN                                                         
05       THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH                                                            
06       THE CERTIFICATE IS ISSUED, AND THE CERTIFICATE MUST CONTAIN A                                                     
07       CONSPICUOUS STATEMENT TO THAT EFFECT.] A certificate issued under this                                            
08       subsection does not expire.                                                                                       
09    * Sec. 12. AS 43.55.023(g) is amended to read:                                                                     
10            (g)  The issuance of a transferable tax credit certificate under (d) of this                             
11       section or former (m) of this section or the purchase of a certificate under                              
12       AS 43.55.028 does not limit the department's ability to later audit a tax credit claim to                         
13       which the certificate relates or to adjust the claim if the department determines, as a                           
14       result of the audit, that the applicant was not entitled to the amount of the credit for                          
15       which the certificate was issued. The tax liability of the applicant under                                        
16       AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased by the amount of the credit                                
17       that exceeds that to which the applicant was entitled, or the applicant's available valid                         
18       outstanding credits applicable against the tax levied by AS 43.55.011(e) are reduced                              
19       by that amount. If the applicant's tax liability is increased under this subsection, the                          
20       increase bears interest under AS 43.05.225 from the date the transferable tax credit                              
21       certificate was issued. For purposes of this subsection, an applicant that is an explorer                         
22       is considered a producer subject to the tax levied by AS 43.55.011(e).                                            
23    * Sec. 13. AS 43.55.023(g) is amended to read:                                                                     
24            (g)  The issuance of a transferable tax credit certificate under (d) of this section                         
25       or former (m) of this section or the purchase of a certificate under AS 43.55.028 does                            
26       not limit the department's ability to later audit a tax credit claim to which the                                 
27       certificate relates or to adjust the claim if the department determines, as a result of the                       
28       audit, that the applicant was not entitled to the amount of the credit for which the                              
29       certificate was issued. The tax liability of the applicant under AS 43.55.011(e) and                              
30       43.55.017 - 43.55.180 is increased by the amount of the credit that exceeds that to                               
31       which the applicant was entitled, or the applicant's available valid outstanding credits                          
01       applicable against the tax levied by AS 43.55.011(e) are reduced by that amount. If the                           
02       applicant's tax liability is increased under this subsection, the increase bears interest                         
03       under AS 43.05.225(1) [AS 43.05.225] from the date the transferable tax credit                                
04       certificate was issued. For purposes of this subsection, an applicant that is an explorer                         
05       is considered a producer subject to the tax levied by AS 43.55.011(e).                                            
06    * Sec. 14. AS 43.55.023(l) is amended to read:                                                                     
07            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
08       expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH                                                      
09       LATITUDE] after December 31, 2010, and before January 1, 2021 [JUNE 30,                                       
10       2010], as follows:                                                                                                
11                 (1)  notwithstanding that a well lease expenditure [INCURRED IN                                         
12       THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] may be a deductible                                                 
13       lease expenditure for purposes of calculating the production tax value of oil and gas                             
14       under AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this                            
15       section, AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer                                 
16       or explorer that incurs a well lease expenditure [IN THE STATE SOUTH OF 68                                        
17       DEGREES NORTH LATITUDE] may elect to apply a tax credit against a tax levied                                      
18       by AS 43.55.011(e) in the amount of 40 percent of that expenditure; [A TAX CREDIT                                 
19       UNDER THIS PARAGRAPH MAY BE APPLIED FOR A SINGLE CALENDAR                                                         
20       YEAR;]                                                                                                            
21                 (2)  a producer or explorer may take a credit for a well lease                                          
22       expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH                                                      
23       LATITUDE] in connection with geological or geophysical exploration or in                                          
24       connection with an exploration well only if the producer or explorer                                              
25                      (A)  agrees, in writing, to the applicable provisions of                                           
26            AS 43.55.025(f)(2); and                                                                                      
27                      (B)  submits to the Department of Natural Resources all data                                       
28            that would be required to be submitted under AS 43.55.025(f)(2).                                             
29    * Sec. 15. AS 43.55.023(l) is amended to read:                                                                     
30            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
31       expenditure incurred in the state south of 68 degrees North latitude after                                    
01       December 31, 2020 [DECEMBER 31, 2010, AND BEFORE JANUARY 1, 2021], as                                         
02       follows:                                                                                                          
03                 (1)  notwithstanding that a well lease expenditure incurred in the state                            
04       south of 68 degrees North latitude may be a deductible lease expenditure for                                  
05       purposes of calculating the production tax value of oil and gas under AS 43.55.160(a),                            
06       unless a credit for that expenditure is taken under (a) of this section, AS 38.05.180(i),                         
07       AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or explorer that incurs a                                 
08       well lease expenditure in the state south of 68 degrees North latitude may elect to                           
09       apply a tax credit against a tax levied by AS 43.55.011(e) in the amount of 40 percent                            
10       of that expenditure;                                                                                              
11                 (2)  a producer or explorer may take a credit for a well lease                                          
12       expenditure incurred in the state south of 68 degrees north latitude in connection                            
13       with geological or geophysical exploration or in connection with an exploration well                              
14       only if the producer or explorer                                                                                  
15                      (A)  agrees, in writing, to the applicable provisions of                                           
16            AS 43.55.025(f)(2); and                                                                                      
17                      (B)  submits to the Department of Natural Resources all data                                       
18            that would be required to be submitted under AS 43.55.025(f)(2).                                             
19    * Sec. 16. AS 43.55.023(n) is amended to read:                                                                     
20            (n)  For the purposes of (l) [AND (m)] of this section, a well lease expenditure                             
21       [INCURRED IN THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] is a                                                   
22       lease expenditure that is                                                                                         
23                 (1)  directly related to an exploration well, a stratigraphic test well, a                              
24       producing well, or an injection well other than a disposal well, [LOCATED IN THE                                  
25       STATE SOUTH OF 68 DEGREES NORTH LATITUDE,] if the expenditure is a                                                
26       qualified capital expenditure and an intangible drilling and development cost                                     
27       authorized under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R.                                     
28       1.612-4, regardless of the elections made under 26 U.S.C. 263(c); in this paragraph, an                           
29       expenditure directly related to a well includes an expenditure for well sidetracking,                             
30       well deepening, well completion or recompletion, or well workover, regardless of                                  
31       whether the well is or has been a producing well; or                                                              
01                 (2)  an expense for seismic work conducted within the boundaries of a                                   
02       production or exploration unit.                                                                                   
03    * Sec. 17. AS 43.55.023(n) is amended to read:                                                                     
04            (n)  For the purposes of (l) of this section, a well lease expenditure incurred in                       
05       the state south of 68 degrees North latitude is a lease expenditure that is                                   
06                 (1)  directly related to an exploration well, a stratigraphic test well, a                              
07       producing well, or an injection well other than a disposal well, located in the state                         
08       south of 68 degrees North latitude, if the expenditure is a qualified capital                                 
09       expenditure and an intangible drilling and development cost authorized under 26                                   
10       U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R. 1.612-4, regardless of the                              
11       elections made under 26 U.S.C. 263(c); in this paragraph, an expenditure directly                                 
12       related to a well includes an expenditure for well sidetracking, well deepening, well                             
13       completion or recompletion, or well workover, regardless of whether the well is or has                            
14       been a producing well; or                                                                                         
15                 (2)  an expense for seismic work conducted within the boundaries of a                                   
16       production or exploration unit.                                                                                   
17    * Sec. 18. AS 43.55.024(b) is amended to read:                                                                     
18            (b)  A producer may not take a tax credit under (a) of this section for any                                  
19       calendar year after the later of                                                                                  
20                 (1)  2021 [2016]; or                                                                                
21                 (2)  the ninth calendar year after the calendar year during which the                                   
22       producer first has commercial oil or gas production before May 1, 2021 [2016], from                           
23       at least one lease or property in the state outside the Cook Inlet sedimentary basin, no                          
24       part of which is north of 68 degrees North latitude, if the producer did not have                                 
25       commercial oil or gas production from a lease or property in the state outside the Cook                           
26       Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, before                           
27       April 1, 2006.                                                                                                    
28    * Sec. 19. AS 43.55.024(d) is amended to read:                                                                     
29            (d)  A producer may not take a tax credit under (c) of this section for any                                  
30       calendar year after the later of                                                                                  
31                 (1)  2021 [2016]; or                                                                                
01                 (2)  if the producer did not have commercial oil or gas production from                                 
02       a lease or property in the state before April 1, 2006, the ninth calendar year after the                          
03       calendar year during which the producer first has commercial oil or gas production                                
04       before May 1, 2021 [2016], from at least one lease or property in the state.                                  
05    * Sec. 20. AS 43.55.025(b) is amended to read:                                                                     
06            (b)  To qualify for the production tax credit under (a) of this section, an                                  
07       exploration expenditure must be incurred for work performed after June 30, 2008, and                              
08       before July 1, 2021 [2016], and                                                                               
09                 (1)  may be for seismic or other geophysical exploration costs not                                      
10       connected with a specific well;                                                                                   
11                 (2)  if for an exploration well,                                                                        
12                      (A)  must be incurred by an explorer that holds an interest in the                                 
13            exploration well for which the production tax credit is claimed;                                             
14                      (B)  may be for either a well that encounters an oil or gas                                        
15            deposit or a dry hole;                                                                                       
16                      (C)  must be for a well that has been completed, suspended, or                                     
17            abandoned at the time the explorer claims the tax credit under (f) of this                                   
18            section; and                                                                                                 
19                      (D)  must be for goods, services, or rentals of personal property                                  
20            reasonably required for the surface preparation, drilling, casing, cementing,                                
21            and logging of an exploration well, and, in the case of a dry hole, for the                                  
22            expenses required for abandonment if the well is abandoned within 18 months                                  
23            after the date the well was spudded;                                                                         
24                 (3)  may not be for administration, supervision, engineering, or lease                                  
25       operating costs; geological or management costs; community relations or                                           
26       environmental costs; bonuses, taxes, or other payments to governments related to the                              
27       well; costs, including repairs and replacements, arising from or associated with fraud,                           
28       wilful misconduct, gross negligence, criminal negligence, or violation of law,                                    
29       including a violation of 33 U.S.C. 1319(c)(1) or 1321(b)(3) (Clean Water Act); or                                 
30       other costs that are generally recognized as indirect costs or financing costs; and                               
31                 (4)  may not be incurred for an exploration well or seismic exploration                                 
01       that is included in a plan of exploration or a plan of development for any unit before                            
02       May 14, 2003.                                                                                                     
03    * Sec. 21. AS 43.55.025(k) is amended to read:                                                                     
04            (k)  Subject to the terms and conditions of this section, if a claim is filed under                          
05       (f)(1) of this section before January 1, 2021 [2016], a credit against the production tax                     
06       levied by AS 43.55.011(e) is allowed in an amount equal to five percent of an eligible                            
07       expenditure under this subsection incurred for seismic exploration performed before                               
08       July 1, 2003. To be eligible under this subsection, an expenditure must                                           
09                 (1)  have been for seismic exploration that                                                             
10                      (A)  obtained data that the commissioner of natural resources                                      
11            considers to be in the best interest of the state to acquire for public distribution;                        
12            and                                                                                                          
13                      (B)  was conducted outside the boundaries of a production unit;                                    
14            however, the amount of the expenditure that is otherwise eligible under this                                 
15            section is reduced proportionately by the portion of the seismic exploration                                 
16            activity that crossed into a production unit; and                                                            
17                 (2)  qualify under (b)(3) of this section.                                                              
18    * Sec. 22. AS 43.55.028(e) is amended to read:                                                                     
19            (e)  The department, on the written application of a person to whom a                                        
20       transferable tax credit certificate has been issued under AS 43.55.023(d) or former                           
21       AS 43.55.023(m) [(m)] or to whom a production tax credit certificate has been issued                          
22       under AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                              
23       purchase, in whole or in part, the certificate if the department finds that                                       
24                 (1)  the calendar year of the purchase is not earlier than the first                                    
25       calendar year for which the credit shown on the certificate would otherwise be allowed                            
26       to be applied against a tax;                                                                                      
27                 (2)  [REPEALED                                                                                          
28                 (3)  REPEALED                                                                                           
29                 (4)]  the applicant does not have an outstanding liability to the state for                             
30       unpaid delinquent taxes under this title;                                                                         
31                 (3) [(5)]  the applicant's total tax liability under AS 43.55.011(e), after                         
01       application of all available tax credits, for the calendar year in which the application is                       
02       made is zero;                                                                                                     
03                 (4) [(6)]  the applicant's average daily production of oil and gas taxable                          
04       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
05       the application is made was not more than 50,000 BTU equivalent barrels; and                                      
06                 (5) [(7)]  the purchase is consistent with this section and regulations                             
07       adopted under this section.                                                                                       
08    * Sec. 23. AS 43.55.028(g) is amended to read:                                                                     
09            (g)  The department may adopt regulations to carry out the purposes of this                                  
10       section, including standards and procedures to allocate available money among                                     
11       applications for purchases under this chapter and claims for refunds under                                        
12       AS 43.20.046 when the total amount of the applications for purchase and claims for                                
13       refund exceed the amount of available money in the fund. The regulations adopted by                               
14       the department may not, when allocating available money in the fund under this                                    
15       section, distinguish an application for the purchase of a credit certificate issued under                         
16       former AS 43.55.023(m) or a claim for refund under AS 43.20.046.                                              
17    * Sec. 24. AS 43.55.890 is amended to read:                                                                        
18            Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary                                
19       provision of AS 40.25.100, and regardless of whether the information is considered                                
20       under AS 43.05.230(e) to constitute statistics classified to prevent the identification of                        
21       particular returns or reports, the department may publish the following information                               
22       under this chapter, if aggregated among three or more producers or explorers,                                     
23       showing, by month or calendar year and by lease or property, unit, or area of the state:                      
24                 (1)  the amount of oil or gas production;                                                               
25                 (2)  the amount of taxes levied under this chapter or paid under this                                   
26       chapter;                                                                                                          
27                 (3)  the effective tax rates under this chapter;                                                        
28                 (4)  the gross value of oil or gas at the point of production;                                          
29                 (5)  the transportation costs for oil or gas;                                                           
30                 (6)  qualified capital expenditures, as defined in AS 43.55.023;                                        
31                 (7)  exploration expenditures under AS 43.55.025;                                                       
01                 (8)  production tax values of oil or gas under AS 43.55.160;                                            
02                 (9)  lease expenditures under AS 43.55.165;                                                             
03                 (10)  adjustments to lease expenditures under AS 43.55.170;                                             
04                 (11)  tax credits applicable or potentially applicable against taxes levied                             
05       by this chapter; the information relating to tax credits under this paragraph, to                             
06       the extent the information is available to the department, must include the                                   
07       statutory authority for each type of credit taken, the amount of credits taken                                
08       under each statute authorizing a tax credit, and whether the credit is for an                                 
09       expenditure related to oil or gas exploration, development, or production,                                    
10       including the drilling of wells; performing work on existing wells; conducting                                
11       geological or geophysical exploration; acquiring, constructing, or installing new                             
12       facilities or equipment; and maintaining, repairing, or replacing existing facilities                         
13       or equipment.                                                                                                 
14    * Sec. 25. AS 43.56.160 is amended to read:                                                                        
15            Sec. 43.56.160. Interest and penalty. When the tax levied by AS 43.56.010(a)                               
16       becomes delinquent, a penalty of 10 percent shall be added. Interest on the delinquent                            
17       taxes, exclusive of penalty, shall be assessed at the rate specified in AS 43.05.225(1)                       
18       [A RATE OF EIGHT PERCENT A YEAR].                                                                                 
19    * Sec. 26. AS 43.77.020(d) is amended to read:                                                                     
20            (d)  A person subject to the tax under this chapter shall make quarterly                                     
21       payments of the tax estimated to be due for the year, as required under regulations                               
22       adopted by the department. A taxpayer will be subject to an estimated tax penalty,                                
23       determined by applying the interest rate specified in AS 43.05.225(1) [AS 43.05.225]                          
24       to the underpayment for each quarter, unless the taxpayer makes estimated tax                                     
25       payments in equal installments that total either                                                                  
26                 (1)  at least 90 percent of the taxpayer's tax liability under this chapter                             
27       for the tax year; or                                                                                              
28                 (2)  at least 100 percent of the taxpayer's tax liability under this chapter                            
29       for the prior tax year.                                                                                           
30    * Sec. 27. AS 43.90.430 is amended to read:                                                                        
31            Sec. 43.90.430. Interest. When a payment due to the state under this chapter                               
01       becomes delinquent, the payment bears interest at the rate applicable to a delinquent                             
02       tax under AS 43.05.225(1) [AS 43.05.225].                                                                     
03    * Sec. 28. AS 43.55.023(m) is repealed.                                                                            
04    * Sec. 29. The uncodified law of the State of Alaska is amended by adding a new section to                         
05 read:                                                                                                                   
06       APPLICABILITY. (a) Sections 10 - 12, 14, 16, and 28 of this Act apply to                                          
07 expenditures incurred after December 31, 2010.                                                                          
08       (b)  Sections 6 - 8 of this Act apply to oil and gas produced after December 31, 2012.                            
09       (c)  Sections 15 and 17 of this Act apply to expenditures incurred after December 31,                             
10 2020.                                                                                                                   
11    * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to                         
12 read:                                                                                                                   
13       TRANSITION: REGULATIONS. The Department of Revenue may adopt regulations                                          
14 to implement this Act. The regulations take effect under AS 44.62 (Administrative Procedure                             
15 Act), but not before the effective date of the provision of this Act implemented by the                                 
16 regulation.                                                                                                             
17    * Sec. 31. The uncodified law of the State of Alaska is amended by adding a new section to                         
18 read:                                                                                                                   
19       RETROACTIVITY. Sections 10 - 12, 14, 16, 22, 23, and 28 of this Act are retroactive                               
20 to January 1, 2011.                                                                                                     
21    * Sec. 32. Section 24 of this Act takes effect January 1, 2012.                                                    
22    * Sec. 33. Sections 6 - 8 and 29(b) of this Act take effect January 1, 2013.                                       
23    * Sec. 34. Sections 15, 17, and 29(c) of this Act take effect January 1, 2021.                                     
24    * Sec. 35. Sections 10 - 12, 14, 16, 22, 23, 28, 29(a), and 31 of this Act take effect                             
25 immediately under AS 01.10.070(c).                                                                                      
26    * Sec. 36. Except as provided in secs. 32 - 35 of this Act, this Act takes effect July 1, 2011.