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HB 338: "An Act relating to the oil and gas production tax; relating to oil and gas production tax credits; amending the minimum tax on oil and gas production; relating to the determination of the production tax value of oil and gas; relating to oil and gas leases; relating to the financing by the Alaska Industrial Development and Export Authority of oil processing facilities on the North Slope; and providing for an effective date."

00                             HOUSE BILL NO. 338                                                                          
01 "An Act relating to the oil and gas production tax; relating to oil and gas production tax                              
02 credits; amending the minimum tax on oil and gas production; relating to the                                            
03 determination of the production tax value of oil and gas; relating to oil and gas leases;                               
04 relating to the financing by the Alaska Industrial Development and Export Authority of                                  
05 oil processing facilities on the North Slope; and providing for an effective date."                                     
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. AS 29.60.850(b) is amended to read:                                                                   
08            (b)  Each fiscal year, the legislature may appropriate to the community revenue                              
09       sharing fund an amount equal to 20 percent of the money received by the state                                 
10       during the previous calendar year under AS 43.55.011(g) [AS 43.20.030(c)]. The                                
11       amount may not exceed                                                                                             
12                 (1)  $60,000,000; or                                                                                    
13                 (2)  the amount that, when added to the fund balance on June 30 of the                                  
01       previous fiscal year, equals $180,000,000.                                                                        
02    * Sec. 2. AS 38.05.180(h) is amended to read:                                                                      
03            (h)  The commissioner shall [MAY] include terms in a [ANY] lease that                            
04       impose [IMPOSING] a minimum work commitment on the lessee to implement the                                
05       plan of development submitted by the lessee with a bid for an oil and gas or gas                              
06       only lease. The terms of the minimum work commitment must [. EXCEPT AS                                        
07       PROVIDED IN (m) OF THIS SECTION, THESE TERMS MUST BE MADE                                                         
08       PUBLIC BEFORE THE SALE, AND MAY] include appropriate penalty provisions                                           
09       to take effect in the event the lessee does not fulfill the minimum work commitment. If                           
10       it is demonstrated that a lease has been proven unproductive by actions of adjacent                               
11       lease holders, the commissioner may set aside a work commitment. The commissioner                                 
12       may waive for a period not to exceed one two-year period any term of a minimum                                    
13       work commitment if the commissioner makes a written finding either that conditions                                
14       preventing drilling or exploration were beyond the lessee's reasonable ability to                                 
15       foresee or control or that the lessee has demonstrated through good faith efforts an                              
16       intent and ability to drill or develop the lease during the term of the waiver.                                   
17    * Sec. 3. AS 38.05.180(x) is amended to read:                                                                      
18            (x)  A lessee conducting or permitting any exploration for, or development or                                
19       production of, oil or gas on state land shall provide the commissioner access to all                              
20       noninterpretive data obtained from that lease; shall provide the commissioner access                          
21       to all information necessary to perform an economic analysis under (ii)(2) of this                            
22       section, including the capital, operating, production, and development costs and                              
23       an estimate of total reserves; and shall provide copies of that data and information,                     
24       as the commissioner may request. The confidentiality provisions of AS 38.05.035                                   
25       apply to the information obtained under this subsection.                                                          
26    * Sec. 4. AS 38.05.180 is amended by adding new subsections to read:                                               
27            (hh)  The commissioner shall require each bidder for an oil and gas lease or gas                             
28       only lease and each lessee applying for an extension or renewal of an oil and gas lease                           
29       or gas only lease to submit a plan of development for exploring, developing, and                                  
30       producing from the lease within the period of the lease or the extension or renewal of                            
31       the lease. The commissioner shall review each plan of development and determine                                   
01       whether the proposed plan of development is reasonably expected to develop the lease                              
02       in the best interest of the state. The plan of development shall be included in a lease                           
03       along with penalties for failing to comply with the plan of development and other                                 
04       terms of the lease. A bidder may not be a qualified bidder for the purposes of (f)(1) of                          
05       this section if the commissioner finds that the bidder has not submitted a proposed                               
06       plan of development that is in the best interest of the state or that the person that                             
07       submitted the plan of development is not reasonably capable of implementing the plan.                             
08            (ii)  The commissioner shall                                                                                 
09                 (1)  review each oil and gas lease or gas only lease each year for the                                  
10       purpose of determining whether a lease is being developed in the best interest of the                             
11       state, whether the lessee is complying with the plan of development applicable to the                             
12       lease, and whether revision of a plan of development, including the planned rate of                               
13       development, would provide the maximum benefit to the people of the state;                                        
14                 (2)  every five years, perform an economic analysis on each                                             
15       participating area and determine whether the participating area is capable of increased                           
16       production in paying quantities over the current rate of production or plan of                                    
17       development;                                                                                                      
18                 (3)  enforce the terms of each oil and gas lease or gas only lease,                                     
19       including imposing any applicable penalty or other remedy for noncompliance, within                               
20       a reasonable time after finding that a lessee is out of compliance with the terms of the                          
21       lease;                                                                                                            
22                 (4)  submit a report to the legislature before the first day of each regular                            
23       session that lists each oil and gas or gas only lessee that is found to be out of                                 
24       compliance and the action by the commissioner to bring the lessee back into                                       
25       compliance or to terminate the lease.                                                                             
26            (jj)  For the purposes of (hh) and (ii) of this section, a plan of development for                           
27       a cooperative or unit under (p) of this section is the plan of development for a lease                            
28       within the cooperative or unit, except where a different plan of development is                                   
29       established for a lease within the cooperative or unit.                                                           
30            (kk)  For purposes of (ii) of this section,                                                                  
31                 (1)  "participating area" means that part of an oil and gas lease unit area                             
01       to which production is allocated in the manner described in a unit agreement;                                     
02                 (2)  "production in paying quantities" means production in quantities                                   
03       sufficient to yield a return in excess of drilling, development, and operating costs.                             
04    * Sec. 5. AS 43.05.225 is amended to read:                                                                         
05            Sec. 43.05.225. Interest. Unless otherwise provided,                                                       
06                 (1)  when a tax levied in this title becomes delinquent, it [A                                      
07       DELINQUENT TAX UNDER THIS TITLE,                                                                                  
08                      (A)  BEFORE JANUARY 1, 2014,] bears interest in each                                               
09            calendar quarter at the rate of five percentage points above the annual rate                                 
10            charged member banks for advances by the 12th Federal Reserve District as of                                 
11            the first day of that calendar quarter, or at the annual rate of 11 percent,                                 
12            whichever is greater, compounded quarterly as of the last day of that quarter;                               
13            [OR                                                                                                          
14                      (B)  ON AND AFTER JANUARY 1, 2014, BEARS                                                           
15            INTEREST IN EACH CALENDAR QUARTER AT THE RATE OF THREE                                                       
16            PERCENTAGE POINTS ABOVE THE ANNUAL RATE CHARGED                                                              
17            MEMBER BANKS FOR ADVANCES BY THE 12TH FEDERAL RESERVE                                                        
18            DISTRICT AS OF THE FIRST DAY OF THAT CALENDAR QUARTER;]                                                      
19                 (2)  the interest rate is 12 percent a year for                                                         
20                      (A)  delinquent fees payable under AS 05.15.095(c); and                                            
21                      (B)  unclaimed property that is not timely paid or delivered, as                                   
22            allowed by AS 34.45.470(a).                                                                                  
23    * Sec. 6. AS 43.55.011(e) is amended to read:                                                                      
24            (e)  There is levied on the producer of oil or gas a tax for all oil and gas                                 
25       produced each calendar year from each lease or property in the state, less any oil and                            
26       gas the ownership or right to which is exempt from taxation or constitutes a                                      
27       landowner's royalty interest. Except as otherwise provided under (f), (j), (k), (o), and                          
28       (p) of this section, the tax is equal to                                                                      
29                 (1)  [BEFORE JANUARY 1, 2014, THE TAX IS EQUAL TO] the                                                  
30       sum of                                                                                                            
31                      [(A)]  the annual production tax value of the taxable oil and gas                                  
01            as calculated under AS 43.55.160(a)(1), as adjusted by AS 43.55.162,                                     
02            multiplied by 25 percent; and                                                                                
03                 (2) [(B)]  the sum, over all months of the calendar year, of the tax                                
04       amounts determined under (g) of this section [;                                                                   
05                 (2)  ON AND AFTER JANUARY 1, 2014, THE TAX IS EQUAL TO                                                  
06       THE ANNUAL PRODUCTION TAX VALUE OF THE TAXABLE OIL AND GAS                                                        
07       AS CALCULATED UNDER AS 43.55.160(a)(1) MULTIPLIED BY 35 PERCENT].                                                 
08    * Sec. 7. AS 43.55.011(f) is repealed and reenacted to read:                                                       
09            (f)  Except for oil and gas subject to (i) of this section and gas subject to (o) of                         
10       this section, the provisions of this subsection apply to oil and gas produced from each                           
11       lease or property within a unit or nonunitized reservoir that has cumulatively produced                           
12       400,000,000 BTU equivalent barrels of oil or gas by the close of the most recent                                  
13       calendar year and from which the average daily oil and gas production from the unit or                            
14       nonunitized reservoir during the most recent calendar year exceeded 100,000 BTU                                   
15       equivalent barrels. Notwithstanding any contrary provision of law, a producer may not                             
16       apply tax credits to reduce its total tax liability under (e) and (g) of this section for oil                     
17       and gas produced from all leases or properties within the unit or nonunitized reservoir                           
18       below 10 percent of the total gross value at the point of production of that oil and gas.                         
19       If the amount of tax calculated by multiplying the tax rates in (e) and (g) of this                               
20       section by the total production tax value of the oil and gas taxable under (e) and (g) of                         
21       this section produced from all of the producer's leases or properties within the unit or                          
22       nonunitized reservoir is less than 10 percent of the total gross value at the point of                            
23       production of that oil and gas, the tax levied by (e) and (g) of this section for that oil                        
24       and gas is equal to 10 percent of the total gross value at the point of production of that                        
25       oil and gas.                                                                                                      
26    * Sec. 8. AS 43.55.011(g) is amended to read:                                                                      
27            (g)  For each month of a calendar year [BEFORE 2014] for which the                                           
28       producer's average monthly production tax value under AS 43.55.160(a)(2) of a BTU                                 
29       equivalent barrel of the taxable oil and gas is more than $30, the amount of tax for                              
30       purposes of (e)(2) [(e)(1)(B)] of this section is determined by multiplying the monthly                       
31       production tax value of the taxable oil and gas produced during the month, as                                 
01       adjusted by AS 43.55.162, by the tax rate calculated as follows:                                              
02                 (1)  if the producer's average monthly production tax value of a BTU                                    
03       equivalent barrel of the taxable oil and gas for the month is not more than $67.50                            
04       [$92.50], the tax rate is 0.4 percent multiplied by the number that represents the                                
05       difference between that average monthly production tax value of a BTU equivalent                                  
06       barrel and $30; [OR]                                                                                              
07                 (2)  if the producer's average monthly production tax value of a                                    
08       BTU equivalent barrel of the taxable oil and gas for the month is more than                                   
09       $67.50 and not more than $87.50, the tax rate is the sum of 15 percent and the                                
10       product of 0.25 percent multiplied by the number that represents the difference                               
11       between the average monthly production tax value of a BTU equivalent barrel                                   
12       and $67.50; or                                                                                                
13                 (3)  if the producer's average monthly production tax value of a BTU                                
14       equivalent barrel of the taxable oil and gas for the month is more than $87.50                                
15       [$92.50], the tax rate is the sum of 25 percent and the product of 0.1 percent multiplied                         
16       by the number that represents the difference between the average monthly production                               
17       tax value of a BTU equivalent barrel and $87.50 [$92.50], except that the sum                                 
18       determined under this paragraph may not exceed 25 [50] percent.                                               
19    * Sec. 9. AS 43.55.011(i) is amended to read:                                                                      
20            (i)  There is levied on the producer of oil or gas a tax for all oil and gas                                 
21       produced each calendar year from each lease or property in the state the ownership or                             
22       right to which constitutes a landowner's royalty interest, except for oil and gas the                             
23       ownership or right to which is exempt from taxation. The provisions of this subsection                            
24       apply to a landowner's royalty interest as follows:                                                               
25                 (1)  the tax levied for oil is equal to five percent of the gross value at                              
26       the point of production of the oil;                                                                               
27                 (2)  the tax levied for gas is equal to 1.667 percent of the gross value at                             
28       the point of production of the gas;                                                                               
29                 (3)  if the department determines that, for purposes of reducing the                                    
30       producer's tax liability under (1) or (2) of this subsection, the producer has received or                        
31       will receive consideration from the royalty owner offsetting all or a part of the                                 
01       producer's royalty obligation, other than a deduction under AS 43.55.020(m)                                   
02       [AS 43.55.020 RELATED TO A SETTLEMENT WITH A ROYALTY OWNER] of                                                    
03       the amount of a tax paid, then, notwithstanding (1) and (2) of this subsection, the tax is                        
04       equal to 25 percent of the gross value at the point of production of the oil and gas.                             
05    * Sec. 10. AS 43.55.011(o) is amended to read:                                                                     
06            (o)  Notwithstanding other provisions of this section, for a calendar year before                            
07       2022, the tax levied under (e) of this section for each 1,000 cubic feet of gas for gas                           
08       produced from a lease or property outside the Cook Inlet sedimentary basin and used                               
09       in the state [, OTHER THAN GAS SUBJECT TO (p) OF THIS SECTION,] may not                                           
10       exceed the amount of tax for each 1,000 cubic feet of gas that is determined under                                
11       (j)(2) of this section.                                                                                           
12    * Sec. 11. AS 43.55.011(p) is amended to read:                                                                     
13            (p)  For the seven years immediately following the commencement of                                           
14       commercial production of oil or gas produced from leases or properties in the state                               
15       that are outside the Cook Inlet sedimentary basin and that do not include land located                            
16       north of 68 degrees North latitude, where that commercial production began after                                  
17       December 31, 2012, and before January 1, 2022 [2027], the levy of tax under (e) of                            
18       this section for oil and gas may not exceed four percent of the gross value at the point                          
19       of production.                                                                                                    
20    * Sec. 12. AS 43.55.020(a) is amended to read:                                                                     
21            (a)  For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i)                          
22       or (p) [AS 43.55.011] shall pay the tax as follows:                                                           
23                 (1)  [BEFORE JANUARY 1, 2014,] an installment payment of the                                            
24       estimated tax levied by AS 43.55.011(e), net of any tax credits applied as allowed by                             
25       law, is due for each month of the calendar year on the last day of the following month;                           
26       except as otherwise provided under (2) of this subsection, the amount of the                                      
27       installment payment is the sum of the following amounts, less 1/12 of the tax credits                             
28       that are allowed by law to be applied against the tax levied by AS 43.55.011(e) for the                           
29       calendar year, but the amount of the installment payment may not be less than zero:                               
30                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                       
31            produced from leases or properties in the state outside the Cook Inlet                                       
01            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
02            the greater of                                                                                               
03                           (i)  zero; or                                                                                 
04                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
05                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
06                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
07                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
08                 deductible for the leases or properties [OIL AND GAS] under                                         
09                 AS 43.55.160 and 1/12 of the adjustment to the production tax                                       
10                 value for the calendar year under AS 43.55.162 from the gross value                                 
11                 at the point of production of the oil and gas produced from the leases or                               
12                 properties during the month for which the installment payment is                                        
13                 calculated;                                                                                             
14                      (B)  for oil and gas produced from leases or properties subject                                    
15            to AS 43.55.011(f), 10 percent of the gross value at the point of production                             
16            of that oil and gas [THE GREATEST OF                                                                     
17                           (i)  ZERO;                                                                                    
18                           (ii)  ZERO PERCENT, ONE PERCENT, TWO                                                          
19                 PERCENT, THREE PERCENT, OR FOUR PERCENT, AS                                                             
20                 APPLICABLE, OF THE GROSS VALUE AT THE POINT OF                                                          
21                 PRODUCTION OF THE OIL AND GAS PRODUCED FROM THE                                                         
22                 LEASES OR PROPERTIES DURING THE MONTH FOR WHICH                                                         
23                 THE INSTALLMENT PAYMENT IS CALCULATED; OR                                                               
24                           (iii)  THE SUM OF 25 PERCENT AND THE TAX                                                      
25                 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g)                                                     
26                 MULTIPLIED BY THE REMAINDER OBTAINED BY                                                                 
27                 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE                                                       
28                 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION                                                        
29                 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE                                                    
30                 FOR THE OIL AND GAS UNDER AS 43.55.160 FROM THE                                                         
31                 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL                                                       
01                 AND GAS PRODUCED FROM THOSE LEASES OR PROPERTIES                                                        
02                 DURING THE MONTH FOR WHICH THE INSTALLMENT                                                              
03                 PAYMENT IS CALCULATED];                                                                                 
04                      (C)  for oil or gas subject to AS 43.55.011(j), (k), [OR] (o), or                              
05            (p), for each lease or property, the greater of                                                          
06                           (i)  zero; or                                                                                 
07                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
08                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
09                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
10                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
11                 deductible under AS 43.55.160 and 1/12 of the adjustment to the                                     
12                 production tax value for the calendar year under AS 43.55.162 for                                   
13                 the oil or gas, as applicable [RESPECTIVELY], produced from the                                     
14                 lease or property from the gross value at the point of production of the                                
15                 oil or gas, respectively, produced from the lease or property during the                                
16                 month for which the installment payment is calculated;                                                  
17                      [(D)  FOR OIL AND GAS SUBJECT TO AS 43.55.011(p),                                                  
18            THE LESSER OF                                                                                                
19                           (i)  THE SUM OF 25 PERCENT AND THE TAX                                                        
20                 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g)                                                     
21                 MULTIPLIED BY THE REMAINDER OBTAINED BY                                                                 
22                 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE                                                       
23                 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION                                                        
24                 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE                                                    
25                 FOR THE OIL AND GAS UNDER AS 43.55.160 FROM THE                                                         
26                 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL                                                       
27                 AND GAS PRODUCED FROM THE LEASES OR PROPERTIES                                                          
28                 DURING THE MONTH FOR WHICH THE INSTALLMENT                                                              
29                 PAYMENT IS CALCULATED, BUT NOT LESS THAN ZERO; OR                                                       
30                           (ii)  FOUR PERCENT OF THE GROSS VALUE AT                                                      
31                 THE POINT OF PRODUCTION OF THE OIL AND GAS                                                              
01                 PRODUCED FROM THE LEASES OR PROPERTIES DURING THE                                                       
02                 MONTH, BUT NOT LESS THAN ZERO;]                                                                         
03                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
04       produced from a lease or property                                                                             
05                      (A)  subject to AS 43.55.011(j), (k), or (o) may not exceed the                                
06            product obtained by carrying out the calculation set out in AS 43.55.011(j)(1)                               
07            or (2) or 43.55.011(o), as applicable, for gas or set out in AS 43.55.011(k)(1)                              
08            or (2), as applicable, for oil, but substituting in AS 43.55.011(j)(1)(A) or (2)(A)                          
09            or 43.55.011(o), as applicable, the amount of taxable gas produced during the                                
10            month for the amount of taxable gas produced during the calendar year and                                    
11            substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the amount of                                
12            taxable oil produced during the month for the amount of taxable oil produced                                 
13            during the calendar year;                                                                                    
14                      (B)  subject to AS 43.55.011(p) may not exceed four percent                                    
15            of the gross value at the point of production of the oil or gas;                                         
16                 (3)  an installment payment of the estimated tax levied by                                              
17       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
18       on the last day of the following month; the amount of the installment payment is the                              
19       sum of                                                                                                            
20                      (A)  the applicable tax rate for oil provided under                                                
21            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
22            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
23            during the month; and                                                                                        
24                      (B)  the applicable tax rate for gas provided under                                                
25            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
26            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
27            during the month;                                                                                            
28                 (4)  any amount of tax levied by AS 43.55.011(e) or (i)                                             
29       [AS 43.55.011], net of any credits applied as allowed by law, that exceeds the total of                           
30       the amounts due as installment payments of estimated tax is due on March 31 of the                                
31       year following the calendar year of production [;                                                                 
01                 (5)  ON AND AFTER JANUARY 1, 2014, AN INSTALLMENT                                                       
02       PAYMENT OF THE ESTIMATED TAX LEVIED BY AS 43.55.011(e), NET OF                                                    
03       ANY TAX CREDITS APPLIED AS ALLOWED BY LAW, IS DUE FOR EACH                                                        
04       MONTH OF THE CALENDAR YEAR ON THE LAST DAY OF THE                                                                 
05       FOLLOWING MONTH; EXCEPT AS OTHERWISE PROVIDED UNDER (6) OF                                                        
06       THIS SUBSECTION, THE AMOUNT OF THE INSTALLMENT PAYMENT IS                                                         
07       THE SUM OF THE FOLLOWING AMOUNTS, LESS 1/12 OF THE TAX CREDITS                                                    
08       THAT ARE ALLOWED BY LAW TO BE APPLIED AGAINST THE TAX LEVIED                                                      
09       BY AS 43.55.011(e) FOR THE CALENDAR YEAR, BUT THE AMOUNT OF THE                                                   
10       INSTALLMENT PAYMENT MAY NOT BE LESS THAN ZERO:                                                                    
11                      (A)  FOR OIL AND GAS NOT SUBJECT TO AS 43.55.011(o)                                                
12            OR (p) PRODUCED FROM LEASES OR PROPERTIES IN THE STATE                                                       
13            OUTSIDE THE COOK INLET SEDIMENTARY BASIN, OTHER THAN                                                         
14            LEASES OR PROPERTIES SUBJECT TO AS 43.55.011(f), THE GREATER                                                 
15            OF                                                                                                           
16                           (i)  ZERO; OR                                                                                 
17                           (ii)  35 PERCENT MULTIPLIED BY THE                                                            
18                 REMAINDER OBTAINED BY SUBTRACTING 1/12 OF THE                                                           
19                 PRODUCER'S ADJUSTED LEASE EXPENDITURES FOR THE                                                          
20                 CALENDAR YEAR OF PRODUCTION UNDER AS 43.55.165 AND                                                      
21                 43.55.170 THAT ARE DEDUCTIBLE FOR THE OIL AND GAS                                                       
22                 UNDER AS 43.55.160 FROM THE GROSS VALUE AT THE POINT                                                    
23                 OF PRODUCTION OF THE OIL AND GAS PRODUCED FROM                                                          
24                 THE LEASES OR PROPERTIES DURING THE MONTH FOR                                                           
25                 WHICH THE INSTALLMENT PAYMENT IS CALCULATED;                                                            
26                      (B)  FOR OIL AND GAS PRODUCED FROM LEASES OR                                                       
27            PROPERTIES SUBJECT TO AS 43.55.011(f), THE GREATEST OF                                                       
28                           (i)  ZERO;                                                                                    
29                           (ii)  ZERO PERCENT, ONE PERCENT, TWO                                                          
30                 PERCENT, THREE PERCENT, OR FOUR PERCENT, AS                                                             
31                 APPLICABLE, OF THE GROSS VALUE AT THE POINT OF                                                          
01                 PRODUCTION OF THE OIL AND GAS PRODUCED FROM THE                                                         
02                 LEASES OR PROPERTIES DURING THE MONTH FOR WHICH                                                         
03                 THE INSTALLMENT PAYMENT IS CALCULATED; OR                                                               
04                           (iii)  35 PERCENT MULTIPLIED BY THE                                                           
05                 REMAINDER OBTAINED BY SUBTRACTING 1/12 OF THE                                                           
06                 PRODUCER'S ADJUSTED LEASE EXPENDITURES FOR THE                                                          
07                 CALENDAR YEAR OF PRODUCTION UNDER AS 43.55.165 AND                                                      
08                 43.55.170 THAT ARE DEDUCTIBLE FOR THE OIL AND GAS                                                       
09                 UNDER AS 43.55.160 FROM THE GROSS VALUE AT THE POINT                                                    
10                 OF PRODUCTION OF THE OIL AND GAS PRODUCED FROM                                                          
11                 THOSE LEASES OR PROPERTIES DURING THE MONTH FOR                                                         
12                 WHICH THE INSTALLMENT PAYMENT IS CALCULATED,                                                            
13                 EXCEPT THAT, FOR THE PURPOSES OF THIS CALCULATION,                                                      
14                 A REDUCTION FROM THE GROSS VALUE AT THE POINT OF                                                        
15                 PRODUCTION MAY APPLY FOR OIL AND GAS SUBJECT TO                                                         
16                 AS 43.55.160(f) OR (g);                                                                                 
17                      (C)  FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k),                                               
18            OR (o), FOR EACH LEASE OR PROPERTY, THE GREATER OF                                                           
19                           (i)  ZERO; OR                                                                                 
20                           (ii)  35 PERCENT MULTIPLIED BY THE                                                            
21                 REMAINDER OBTAINED BY SUBTRACTING 1/12 OF THE                                                           
22                 PRODUCER'S ADJUSTED LEASE EXPENDITURES FOR THE                                                          
23                 CALENDAR YEAR OF PRODUCTION UNDER AS 43.55.165 AND                                                      
24                 43.55.170 THAT ARE DEDUCTIBLE UNDER AS 43.55.160 FOR                                                    
25                 THE OIL OR GAS, RESPECTIVELY, PRODUCED FROM THE                                                         
26                 LEASE OR PROPERTY FROM THE GROSS VALUE AT THE                                                           
27                 POINT OF PRODUCTION OF THE OIL OR GAS, RESPECTIVELY,                                                    
28                 PRODUCED FROM THE LEASE OR PROPERTY DURING THE                                                          
29                 MONTH FOR WHICH THE INSTALLMENT PAYMENT IS                                                              
30                 CALCULATED;                                                                                             
31                      (D)  FOR OIL AND GAS SUBJECT TO AS 43.55.011(p),                                                   
01            THE LESSER OF                                                                                                
02                           (i)  35 PERCENT MULTIPLIED BY THE                                                             
03                 REMAINDER OBTAINED BY SUBTRACTING 1/12 OF THE                                                           
04                 PRODUCER'S ADJUSTED LEASE EXPENDITURES FOR THE                                                          
05                 CALENDAR YEAR OF PRODUCTION UNDER AS 43.55.165 AND                                                      
06                 43.55.170 THAT ARE DEDUCTIBLE FOR THE OIL AND GAS                                                       
07                 UNDER AS 43.55.160 FROM THE GROSS VALUE AT THE POINT                                                    
08                 OF PRODUCTION OF THE OIL AND GAS PRODUCED FROM                                                          
09                 THE LEASES OR PROPERTIES DURING THE MONTH FOR                                                           
10                 WHICH THE INSTALLMENT PAYMENT IS CALCULATED, BUT                                                        
11                 NOT LESS THAN ZERO; OR                                                                                  
12                           (ii)  FOUR PERCENT OF THE GROSS VALUE AT                                                      
13                 THE POINT OF PRODUCTION OF THE OIL AND GAS                                                              
14                 PRODUCED FROM THE LEASES OR PROPERTIES DURING THE                                                       
15                 MONTH, BUT NOT LESS THAN ZERO;                                                                          
16                 (6)  AN AMOUNT CALCULATED UNDER (5)(C) OF THIS                                                          
17       SUBSECTION FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k), OR (o) MAY                                             
18       NOT EXCEED THE PRODUCT OBTAINED BY CARRYING OUT THE                                                               
19       CALCULATION SET OUT IN AS 43.55.011(j)(1) OR (2) OR 43.55.011(o), AS                                              
20       APPLICABLE, FOR GAS OR SET OUT IN AS 43.55.011(k)(1) OR (2), AS                                                   
21       APPLICABLE, FOR OIL, BUT SUBSTITUTING IN AS 43.55.011(j)(1)(A) OR                                                 
22       (2)(A) OR 43.55.011(o), AS APPLICABLE, THE AMOUNT OF TAXABLE GAS                                                  
23       PRODUCED DURING THE MONTH FOR THE AMOUNT OF TAXABLE GAS                                                           
24       PRODUCED DURING THE CALENDAR YEAR AND SUBSTITUTING IN                                                             
25       AS 43.55.011(k)(1)(A) OR (2)(A), AS APPLICABLE, THE AMOUNT OF                                                     
26       TAXABLE OIL PRODUCED DURING THE MONTH FOR THE AMOUNT OF                                                           
27       TAXABLE OIL PRODUCED DURING THE CALENDAR YEAR].                                                                   
28    * Sec. 13. AS 43.55.020(g) is amended to read:                                                                     
29            (g)  Notwithstanding any contrary provision of AS 43.05.225,                                                 
30                 [(1)  BEFORE JANUARY 1, 2014,] an unpaid amount of an                                                   
31       installment payment required under (a)(1) - (3) of this section that is not paid when                             
01       due bears interest (1) [(A)] at the rate provided for an underpayment under 26 U.S.C.                         
02       6621 (Internal Revenue Code), as amended, compounded daily, from the date the                                     
03       installment payment is due until March 31 following the calendar year of production,                              
04       and (2) [(B)] as provided for a delinquent tax under AS 43.05.225 after that March 31.                    
05       Interest [; INTEREST] accrued under (1) [(A)] of this subsection [PARAGRAPH]                          
06       that remains unpaid after that March 31 is treated as an addition to tax that bears                               
07       interest under (2) [(B)] of this subsection. An [PARAGRAPH; AN] unpaid amount of                          
08       tax due under (a)(4) of this section that is not paid when due bears interest as provided                         
09       for a delinquent tax under AS 43.05.225 [;                                                                        
10                 (2)  ON AND AFTER JANUARY 1, 2014, AN UNPAID AMOUNT                                                     
11       OF AN INSTALLMENT PAYMENT REQUIRED UNDER (a)(3), (5), OR (6) OF                                                   
12       THIS SECTION THAT IS NOT PAID WHEN DUE BEARS INTEREST (A) AT                                                      
13       THE RATE PROVIDED FOR AN UNDERPAYMENT UNDER 26 U.S.C. 6621                                                        
14       (INTERNAL REVENUE CODE), AS AMENDED, COMPOUNDED DAILY,                                                            
15       FROM THE DATE THE INSTALLMENT PAYMENT IS DUE UNTIL MARCH 31                                                       
16       FOLLOWING THE CALENDAR YEAR OF PRODUCTION, AND (B) AS                                                             
17       PROVIDED FOR A DELINQUENT TAX UNDER AS 43.05.225 AFTER THAT                                                       
18       MARCH 31; INTEREST ACCRUED UNDER (A) OF THIS PARAGRAPH THAT                                                       
19       REMAINS UNPAID AFTER THAT MARCH 31 IS TREATED AS AN ADDITION                                                      
20       TO TAX THAT BEARS INTEREST UNDER (B) OF THIS PARAGRAPH; AN                                                        
21       UNPAID AMOUNT OF TAX DUE UNDER (a)(4) OF THIS SECTION THAT IS                                                     
22       NOT PAID WHEN DUE BEARS INTEREST AS PROVIDED FOR A                                                                
23       DELINQUENT TAX UNDER AS 43.05.225].                                                                               
24    * Sec. 14. AS 43.55.020(h) is amended to read:                                                                     
25            (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                 
26                 (1)  an overpayment of an installment payment required under (a)(1) -                                   
27       (3) [, (5) OR (6)] of this section bears interest at the rate provided for an overpayment                         
28       under 26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from                                  
29       the later of the date the installment payment is due or the date the overpayment is                               
30       made, until the earlier of                                                                                        
31                      (A)  the date it is refunded or is applied to an underpayment; or                                  
01                      (B)  March 31 following the calendar year of production;                                           
02                 (2)  except as provided under (1) of this subsection, interest with                                     
03       respect to an overpayment is allowed only on any net overpayment of the payments                                  
04       required under (a) of this section that remains after the later of March 31 following the                         
05       calendar year of production or the date that the statement required under                                         
06       AS 43.55.030(a) is filed;                                                                                         
07                 (3)  interest is allowed under (2) of this subsection only from a date that                             
08       is 90 days after the later of March 31 following the calendar year of production or the                           
09       date that the statement required under AS 43.55.030(a) is filed; interest is not allowed                          
10       if the overpayment was refunded within the 90-day period;                                                         
11                 (4)  interest under (2) and (3) of this subsection is paid at the rate and in                           
12       the manner provided in AS 43.05.225(1).                                                                           
13    * Sec. 15. AS 43.55.020 is amended by adding a new subsection to read:                                             
14            (m)  In making settlement with the royalty owner for oil and gas that is taxable                             
15       under AS 43.55.011, the producer may deduct the amount of the tax paid on taxable                                 
16       royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at the                          
17       time the tax becomes due to the amount of the tax paid. If the total deductions of                                
18       installment payments of estimated tax for a calendar year exceed the actual tax for that                          
19       calendar year, the producer shall, before April 1 of the following year, refund the                               
20       excess to the royalty owner. Unless otherwise agreed between the producer and the                                 
21       royalty owner, the amount of the tax paid under AS 43.55.011(e) - (g) on taxable                                  
22       royalty oil and gas for a calendar year, other than oil and gas the ownership or right to                         
23       which constitutes a landowner's royalty interest, is considered to be the gross value at                          
24       the point of production of the taxable royalty oil and gas produced during the calendar                           
25       year multiplied by a figure that is a quotient, in which                                                          
26                 (1)  the numerator is the producer's total tax liability under                                          
27       AS 43.55.011(e) - (g) for the calendar year of production; and                                                    
28                 (2)  the denominator is the total gross value at the point of production                                
29       of the oil and gas taxable under AS 43.55.011(e) - (g) produced by the producer from                              
30       all leases and properties in the state during the calendar year.                                                  
31    * Sec. 16. AS 43.55.023(a) is amended to read:                                                                     
01            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
02       expenditure as follows:                                                                                           
03                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
04       deductible lease expenditure for purposes of calculating the production tax value of oil                          
05       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
06       AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or                                       
07       explorer that incurs a qualified capital expenditure may also elect to apply a tax credit                         
08       against a tax levied by AS 43.55.011(e) in the amount of 10 [20] percent of that                              
09       expenditure; however, not more than half of the tax credit may be applied for a                               
10       single calendar year;                                                                                         
11                 (2)  a producer or explorer may take a credit for a qualified capital                                   
12       expenditure incurred in connection with geological or geophysical exploration or in                               
13       connection with an exploration well only if the producer or explorer                                              
14                      (A)  agrees, in writing, to the applicable provisions of                                           
15            AS 43.55.025(f)(2); and                                                                                      
16                      (B)  submits to the Department of Natural Resources all data                                       
17            that would be required to be submitted under AS 43.55.025(f)(2) [;                                           
18                 (3)  A CREDIT FOR A QUALIFIED CAPITAL EXPENDITURE                                                       
19       INCURRED TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS                                                           
20       DEPOSITS LOCATED NORTH OF 68 DEGREES NORTH LATITUDE MAY BE                                                        
21       TAKEN ONLY IF THE EXPENDITURE IS INCURRED BEFORE JANUARY 1,                                                       
22       2014].                                                                                                            
23    * Sec. 17. AS 43.55.023(b) is amended to read:                                                                     
24            (b)  A [BEFORE JANUARY 1, 2014, A] producer or explorer may elect to                                     
25       take a tax credit in the amount of 25 percent of a carried-forward annual loss. [FOR                            
26       LEASE EXPENDITURES INCURRED ON AND AFTER JANUARY 1, 2014, AND                                                     
27       BEFORE JANUARY 1, 2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL                                                   
28       OR GAS DEPOSITS LOCATED NORTH OF 68 DEGREES NORTH LATITUDE,                                                       
29       A PRODUCER OR EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE                                                      
30       AMOUNT OF 45 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS. FOR                                                        
31       LEASE EXPENDITURES INCURRED ON AND AFTER JANUARY 1, 2016, TO                                                      
01       EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED                                                      
02       NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR EXPLORER                                                        
03       MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 35 PERCENT OF                                                     
04       A CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES                                                             
05       INCURRED ON OR AFTER JANUARY 1, 2014, TO EXPLORE FOR, DEVELOP,                                                    
06       OR PRODUCE OIL OR GAS DEPOSITS LOCATED SOUTH OF 68 DEGREES                                                        
07       NORTH LATITUDE, A PRODUCER OR EXPLORER MAY ELECT TO TAKE A                                                        
08       TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A CARRIED-FORWARD                                                       
09       ANNUAL LOSS.] A credit under this subsection may be applied against a tax levied                                  
10       by AS 43.55.011(e). For purposes of this subsection, a carried-forward annual loss is                             
11       the amount of a producer's or explorer's adjusted lease expenditures under                                        
12       AS 43.55.165 and 43.55.170 for a previous calendar year that was not deductible in                                
13       calculating production tax values for that calendar year under AS 43.55.160.                                      
14    * Sec. 18. AS 43.55.023(d) is amended to read:                                                                     
15            (d)  A person that is entitled to take a tax credit under this section that wishes                           
16       to transfer the unused credit to another person or obtain a cash payment under                                    
17       AS 43.55.028 may apply to the department for [A] transferable tax credit certificates                         
18       [CERTIFICATE]. An application under this subsection must be in a form prescribed                                  
19       by the department and must include supporting information and documentation that                                  
20       the department reasonably requires. The department shall grant or deny an application,                            
21       or grant an application as to a lesser amount than that claimed and deny it as to the                             
22       excess, not later than 120 days after the latest of (1) March 31 of the year following                            
23       the calendar year in which the qualified capital expenditure or carried-forward annual                            
24       loss for which the credit is claimed was incurred; (2) the date the statement required                            
25       under AS 43.55.030(a) or (e) was filed for the calendar year in which the qualified                               
26       capital expenditure or carried-forward annual loss for which the credit is claimed was                            
27       incurred; or (3) the date the application was received by the department. If, based on                            
28       the information then available to it, the department is reasonably satisfied that the                             
29       applicant is entitled to a credit, the department shall issue the applicant two [A]                           
30       transferable tax credit certificates, each for half of [CERTIFICATE FOR] the                                  
31       amount of the credit. The credit shown on one of the two certificates is available                            
01       for immediate use. The credit shown on the second of the two certificates may not                             
02       be applied against a tax for a calendar year earlier than the calendar year                                   
03       following the calendar year in which the certificate is issued, and the certificate                           
04       must contain a conspicuous statement to that effect. A certificate issued under this                          
05       subsection does not expire.                                                                                       
06    * Sec. 19. AS 43.55.023(g) is amended to read:                                                                     
07            (g)  The issuance of a transferable tax credit certificate under (d) [OF THIS                                
08       SECTION] or (q) [FORMER (m)] of this section or the purchase of a certificate under                           
09       AS 43.55.028 does not limit the department's ability to later audit a tax credit claim to                         
10       which the certificate relates or to adjust the claim if the department determines, as a                           
11       result of the audit, that the applicant was not entitled to the amount of the credit for                          
12       which the certificate was issued. The tax liability of the applicant under                                        
13       AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased by the amount of the credit                                
14       that exceeds that to which the applicant was entitled, or the applicant's available valid                         
15       outstanding credits applicable against the tax levied by AS 43.55.011(e) are reduced                              
16       by that amount. If the applicant's tax liability is increased under this subsection, the                          
17       increase bears interest under AS 43.05.225 from the date the transferable tax credit                              
18       certificate was issued. For purposes of this subsection, an applicant that is an explorer                         
19       is considered a producer subject to the tax levied by AS 43.55.011(e).                                            
20    * Sec. 20. AS 43.55.023(n) is amended to read:                                                                     
21            (n)  For the purposes of (l) and (q) of this section, a well lease expenditure                           
22       incurred in the state south of 68 degrees North latitude is a 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 state                             
25       south of 68 degrees North latitude, if the expenditure is a qualified capital expenditure                         
26       and an intangible drilling and development cost authorized under 26 U.S.C. (Internal                              
27       Revenue Code), as amended, and 26 C.F.R. 1.612-4, regardless of the elections made                                
28       under 26 U.S.C. 263(c); in this paragraph, an expenditure directly related to a well                              
29       includes an expenditure for well sidetracking, well deepening, well completion or                                 
30       recompletion, or well workover, regardless of whether the well is or has been a                                   
31       producing well; or                                                                                                
01                 (2)  an expense for seismic work conducted within the boundaries of a                                   
02       production or exploration unit.                                                                                   
03    * Sec. 21. AS 43.55.023(o) is amended to read:                                                                     
04            (o)  In this section, "qualified capital expenditure"                                                        
05                 (1)  means, except as otherwise provided in (2) of this subsection, an                                  
06       expenditure that is a lease expenditure under AS 43.55.165 that is directly                                   
07       attributable to a well, well pad, processing facility, pump station, or other capital                         
08       construction project directly attributable to oil production; and is                                          
09                      (A)  incurred for geological or geophysical exploration; or                                        
10                      (B)  treated as a capitalized expenditure under 26 U.S.C.                                          
11            (Internal Revenue Code), as amended, regardless of elections made under 26                                   
12            U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                                    
13                           (i)  treated as a capitalized expenditure for federal                                         
14                 income tax reporting purposes by the person incurring the expenditure;                                  
15                 or                                                                                                      
16                           (ii)  eligible to be deducted as an expense under 26                                          
17                 U.S.C. 263(c) (Internal Revenue Code), as amended;                                                      
18                 (2)  does not include an expenditure incurred to acquire an asset (A) the                               
19       cost of previously acquiring which was a lease expenditure under AS 43.55.165 or                                  
20       would have been a lease expenditure under AS 43.55.165 if it had been incurred after                              
21       March 31, 2006; for purposes of this subparagraph, "asset" includes geological,                                   
22       geophysical, and well data and interpretations; [OR] (B) that has previously been                                 
23       placed in service in the state; or (C) an expenditure that is not directly attributable                       
24       to oil production, such as an expenditure for the construction or maintenance of a                            
25       road, airstrip, or employee housing; an expenditure to acquire an asset is not                                
26       excluded under this paragraph if not more than an immaterial portion of the asset                                 
27       meets a description under this paragraph.                                                                         
28    * Sec. 22. AS 43.55.023 is amended by adding a new subsection to read:                                             
29            (q)  For a lease expenditure incurred in the state south of 68 degrees North                                 
30       latitude after June 30, 2010, that qualifies for tax credits under (a) and (b) of this                            
31       section, and for a well lease expenditure incurred in the state south of 68 degrees                               
01       North latitude that qualifies for a tax credit under (l) of this section, the department                          
02       shall issue a transferable tax credit certificate to the person entitled to the credit for the                    
03       full amount of the credit. The transferable tax credit certificate does not expire.                               
04    * Sec. 23. AS 43.55.024(d) is amended to read:                                                                     
05            (d)  A producer may not take a tax credit under (c) of this section for any                                  
06       calendar year after the later of                                                                                  
07                 (1)  2022 [2016]; or                                                                                
08                 (2)  if the producer did not have commercial oil or gas production from                                 
09       a lease or property in the state before April 1, 2006, the ninth calendar year after the                          
10       calendar year during which the producer first has commercial oil or gas production                                
11       before May 1, 2022 [2016], from at least one lease or property in the state.                                  
12    * Sec. 24. AS 43.55.024(e) is amended to read:                                                                     
13            (e)  On written application by a producer that includes any information the                                  
14       department may require, the department shall determine whether the producer                                       
15       qualifies for a calendar year under [(a) AND (c) OF] this section. To qualify under [(a)                          
16       AND (c) OF] this section, a producer must demonstrate that its operation in the state                             
17       or its ownership of an interest in a lease or property in the state as a distinct producer                        
18       would not result in the division among multiple producer entities of any production tax                           
19       liability under AS 43.55.011(e) that reasonably would be expected to be attributed to a                           
20       single producer if the tax credit provisions of (a) or (c) of this section did not exist.                         
21    * Sec. 25. AS 43.55.025(a) is amended to read:                                                                     
22            (a)  Subject to the terms and conditions of this section, a credit against the                               
23       production tax levied by AS 43.55.011(e) is allowed for exploration expenditures that                             
24       qualify under (b) of this section in an amount equal to one of the following:                                     
25                 (1)  30 percent of the total exploration expenditures that qualify only                                 
26       under (b) and (c) of this section;                                                                                
27                 (2)  30 percent of the total exploration expenditures that qualify only                                 
28       under (b) and (d) of this section;                                                                                
29                 (3)  40 percent of the total exploration expenditures that qualify under                                
30       (b), (c), and (d) of this section;                                                                                
31                 (4)  40 percent of the total exploration expenditures that qualify only                                 
01       under (b) and (e) of this section;                                                                                
02                 (5)  80, 90, or 100 percent, or a lesser amount described in (l) of this                                
03       section, of the total exploration expenditures described in (b)(1) and (2) of this section                        
04       and not excluded by (b)(3) and (4) of this section that qualify only under (l) of this                            
05       section;                                                                                                          
06                 (6)  the lesser of $25,000,000 or 80 percent of the total exploration                                   
07       drilling expenditures described in (m) of this section and that qualify under (b) and (c)                     
08       [(c)(1), (c)(2)(A), AND (c)(2)(C)] of this section; or                                                            
09                 (7)  the lesser of $7,500,000 or 75 percent of the total seismic                                        
10       exploration expenditures described in (n) of this section and that qualify under (b) of                           
11       this section.                                                                                                     
12    * Sec. 26. 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, 2022 [2016], [EXCEPT THAT TO QUALIFY FOR THE                                                   
16       PRODUCTION TAX CREDIT UNDER (a)(1), (2), (3), OR (4) OF THIS SECTION                                              
17       FOR EXPLORATION CONDUCTED OUTSIDE OF THE COOK INLET                                                               
18       SEDIMENTARY BASIN AND SOUTH OF 68 DEGREES NORTH LATITUDE, AN                                                      
19       EXPLORATION EXPENDITURE MUST BE INCURRED FOR WORK                                                                 
20       PERFORMED AFTER JUNE 30, 2008, AND BEFORE JANUARY 1, 2022,] and                                                   
21                 (1)  may be for seismic or other geophysical exploration costs not                                      
22       connected with a specific well;                                                                                   
23                 (2)  if for an exploration well,                                                                        
24                      (A)  must be incurred by an explorer that holds an interest in the                                 
25            exploration well for which the production tax credit is claimed;                                             
26                      (B)  may be for either a well that encounters an oil or gas                                        
27            deposit or a dry hole;                                                                                       
28                      (C)  must be for a well that has been completed, suspended, or                                     
29            abandoned at the time the explorer claims the tax credit under (f) of this                                   
30            section; and                                                                                                 
31                      (D)  must be for goods, services, or rentals of personal property                                  
01            reasonably required for the surface preparation, drilling, casing, cementing,                                
02            and logging of an exploration well, and, in the case of a dry hole, for the                                  
03            expenses required for abandonment if the well is abandoned within 18 months                                  
04            after the date the well was spudded;                                                                         
05                 (3)  may not be for administration, supervision, engineering, or lease                                  
06       operating costs; geological or management costs; community relations or                                           
07       environmental costs; bonuses, taxes, or other payments to governments related to the                              
08       well; costs, including repairs and replacements, arising from or associated with fraud,                           
09       wilful misconduct, gross negligence, criminal negligence, or violation of law,                                    
10       including a violation of 33 U.S.C. 1319(c)(1) or 1321(b)(3) (Clean Water Act); or                                 
11       other costs that are generally recognized as indirect costs or financing costs; and                               
12                 (4)  may not be incurred for an exploration well or seismic exploration                                 
13       that is included in a plan of exploration or a plan of development for any unit before                            
14       May 14, 2003.                                                                                                     
15    * Sec. 27. AS 43.55.025(m) is amended to read:                                                                     
16            (m)  The persons that drill the first four exploration wells in the state and                                
17       within the areas described in (o) of this section on state lands, private lands, or federal                       
18       onshore lands for the purpose of discovering oil or gas that penetrate and evaluate a                             
19       prospect in a basin described in (o) of this section are eligible for a credit under (a)(6)                       
20       of this section. A credit under this subsection may not be taken for more than two                                
21       exploration wells in a single area described in (o)(1) - (6) of this section. Exploration                         
22       expenditures eligible for the credit in this subsection must be incurred for work                                 
23       performed after June 1, 2012, and before July 1, 2016. A person planning to drill an                              
24       exploration well on private land and to apply for a credit under this subsection shall                            
25       obtain written consent from the owner of the oil and gas interest for the full public                             
26       release of all well data after the expiration of the confidentiality period applicable to                         
27       information collected under (f) of this section. The written consent of the owner of the                          
28       oil and gas interest must be submitted to the commissioner of natural resources before                            
29       approval of the proposed exploration well. In addition to the requirements in (c)                             
30       [(c)(1), (c)(2)(A), AND (c)(2)(C)] of this section and submission of the written                                  
31       consent of the owner of the oil and gas interest, a person planning to drill an                                   
01       exploration well shall obtain approval from the commissioner of natural resources                                 
02       before the well is spudded. The commissioner of natural resources shall make a                                    
03       written determination approving or rejecting an exploration well within 60 days after                             
04       receiving the request for approval or as soon as is practicable thereafter. Before                                
05       approving the exploration well, the commissioner of natural resources shall consider                              
06       the following: the location of the well; the proximity to a community in need of a local                          
07       energy source; the proximity of existing infrastructure; the experience and safety                                
08       record of the explorer in conducting operations in remote or roadless areas; the                                  
09       projected cost schedule; whether seismic mapping and seismic data sufficiently                                    
10       identify a particular trap for exploration; whether the targeted and planned depth and                            
11       range are designed to penetrate and fully evaluate the hydrocarbon potential of the                               
12       proposed prospect and reach the level below which economic hydrocarbon reservoirs                                 
13       are likely to be found, or reach 12,000 feet or more true vertical depth; and whether                             
14       the exploration plan provides for a full evaluation of the wellbore below surface casing                          
15       to the depth of the well. Whether the exploration well for which a credit is requested                            
16       under this subsection is located within an area and a basin described under (o) of this                           
17       section shall be determined by the commissioner of natural resources and reported to                              
18       the commissioner. A taxpayer that obtains a credit under this subsection may not claim                            
19       a tax credit under AS 43.55.023 or another provision in this section for the same                                 
20       exploration expenditure.                                                                                          
21    * Sec. 28. AS 43.55 is amended by adding a new section to read:                                                    
22            Sec. 43.55.026. Heavy oil research and development tax credit. (a) A                                       
23       taxpayer may apply 20 percent of the taxpayer's expenditure attributable to this state                            
24       for research and development related to improving methods of producing heavy oil in                               
25       the state for the taxable year that exceeds the base amount, but not to exceed                                    
26       $10,000,000, as a credit against the state tax liability imposed on the taxpayer under                            
27       this chapter.                                                                                                     
28            (b)  Research and development expenditures in this section are attributable to                               
29       this state if the research and development is being conducted in this state or the payroll                        
30       of employees conducting the research and development is in this state. In this                                    
31       subsection, payroll of an employee is in this state if compensation is paid to an                                 
01       employee in this state and reported as paid in this state in the quarterly contribution                           
02       report under AS 23.20 to the Department of Labor and Workforce Development.                                       
03            (c)  If the tax credit under this section exceeds the taxpayer's tax liability after                         
04       other tax credits are taken under this chapter for the year in which the expenditure is                           
05       incurred, the excess of the tax credit over the liability may be carried forward for up to                        
06       seven years. If an unused credit is carried forward to a tax year from an earlier year,                           
07       the credit arising in the earliest year is applied first against the tax liability for the year.                  
08            (d)  A person may not claim a credit under this section for research and                                     
09       development expenditures that were deducted in the calculation of tax liability under                             
10       AS 43.55.011(e).                                                                                                  
11            (e)  Each year, if three or more taxpayers claim the credit authorized under this                            
12       section during the immediately preceding year, the department shall report to the                                 
13       legislature the number of taxpayers who claimed credits under this section in the prior                           
14       year, the total cumulative amount of credits granted to all taxpayers under this section                          
15       for the prior tax year, a description of the research and development projects for which                          
16       the credit was granted, and the total cumulative number of employees conducting the                               
17       research and development for which all taxpayers claim the credit.                                                
18            (f)  The commissioner shall establish in regulation a method for apportioning                                
19       research expenditures of a producer related to heavy oil production in and outside of                             
20       the state. When developing the regulations, the commissioner may consider the                                     
21       relative amounts of heavy oil the producer is seeking to produce in areas in and                                  
22       outside of the state or consider another reasonable basis on which fairly to apportion                            
23       costs for research related to in-state oil production and oil produced outside of the                             
24       state.                                                                                                            
25            (g)  In this section, "base amount" means the average of research and                                        
26       development expenditures related to improving methods of producing heavy oil and                                  
27       attributable to this state for the three tax years immediately preceding the taxable year                         
28       for which the credit is being claimed.                                                                            
29    * Sec. 29. AS 43.55.028(e) is amended to read:                                                                     
30            (e)  The department, on the written application of a person to whom a                                        
31       transferable tax credit certificate has been issued under AS 43.55.023(d) or (q)                              
01       [FORMER AS 43.55.023(m)] or to whom a production tax credit certificate has been                                  
02       issued under AS 43.55.025(f), may use available money in the oil and gas tax credit                               
03       fund to purchase, in whole or in part, the certificate if the department finds that                               
04                 (1)  the calendar year of the purchase is not earlier than the first                                    
05       calendar year for which the credit shown on the certificate would otherwise be allowed                            
06       to be applied against a tax;                                                                                      
07                 (2)  the applicant does not have an outstanding liability to the state for                              
08       unpaid delinquent taxes under this title;                                                                         
09                 (3)  the applicant's total tax liability under AS 43.55.011(e), after                                   
10       application of all available tax credits, for the calendar year in which the application is                       
11       made is zero;                                                                                                     
12                 (4)  the applicant's average daily production of oil and gas taxable                                    
13       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
14       the application is made was not more than 50,000 BTU equivalent barrels; and                                      
15                 (5)  the purchase is consistent with this section and regulations adopted                               
16       under this section.                                                                                               
17    * Sec. 30. AS 43.55.028(g) is amended to read:                                                                     
18            (g)  The department may adopt regulations to carry out the purposes of this                                  
19       section, including standards and procedures to allocate available money among                                     
20       applications for purchases under this chapter and claims for refunds and payments                                 
21       under AS 43.20.046 or 43.20.047 when the total amount of the applications for                                     
22       purchase and claims for refund exceed the amount of available money in the fund. The                              
23       regulations adopted by the department may not, when allocating available money in                                 
24       the fund under this section, distinguish an application for the purchase of a credit                              
25       certificate issued under AS 43.55.023(q) [FORMER AS 43.55.023(m)] or a claim for                              
26       a refund or payment under AS 43.20.046 or 43.20.047.                                                              
27    * Sec. 31. AS 43.55.030(a) is amended to read:                                                                     
28            (a)  A producer that produces oil or gas from a lease or property in the state                               
29       during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                               
30       for that oil or gas, shall file with the department on March 31 of the following year a                           
31       statement, under oath, in a form prescribed by the department, giving, with other                                 
01       information required by the department under a regulation adopted by the                                      
02       department, the following:                                                                                    
03                 (1)  a description of each lease or property from which oil or gas was                                  
04       produced, by name, legal description, lease number, or accounting codes assigned by                               
05       the department;                                                                                                   
06                 (2)  the names of the producer and, if different, the person paying the                                 
07       tax, if any;                                                                                                      
08                 (3)  the gross amount of oil and the gross amount of gas produced from                                  
09       each lease or property, and the percentage of the gross amount of oil and gas owned by                            
10       the producer;                                                                                                     
11                 (4)  the gross value at the point of production of the oil and of the gas                               
12       produced from each lease or property owned by the producer and the costs of                                       
13       transportation of the oil and gas;                                                                                
14                 (5)  the name of the first purchaser and the price received for the oil and                             
15       for the gas, unless relieved from this requirement in whole or in part by the                                     
16       department;                                                                                                       
17                 (6)  the producer's qualified capital expenditures, as defined in                                       
18       AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other                               
19       payments or credits under AS 43.55.170;                                                                           
20                 (7)  the production tax values of the oil and gas under AS 43.55.160;                                   
21                 (8)  any claims for tax credits to be applied; [AND]                                                    
22                 (9)  calculations showing the amounts, if any, that were or are due                                     
23       under AS 43.55.020(a) and interest on any underpayment or overpayment; and                                    
24                 (10)  for each expenditure that is the basis for a credit claimed                                   
25       under AS 43.55.023 or 43.55.025, a description of the expenditure, a detailed                                 
26       description of the purpose of the expenditure, and a description of the lease or                              
27       property for which the expenditure was incurred; notwithstanding                                              
28       AS 40.25.100(a) and AS 43.05.230(a), information submitted under this                                         
29       paragraph may be disclosed to the public and shall be disclosed to the legislature                            
30       in a report submitted within 10 days after the convening of the next regular                                  
31       legislative session following the date a statement is filed under this section.                               
01    * Sec. 32. AS 43.55.030(e) is amended to read:                                                                     
02            (e)  An explorer or producer that incurs a lease expenditure under                                           
03       AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar                                 
04       year but does not produce oil or gas from a lease or property in the state during the                             
05       calendar year shall file with the department, on March 31 of the following year, a                                
06       statement, under oath, in a form prescribed by the department, giving, with other                                 
07       information required by the department under a regulation adopted by the                                      
08       department, the following:                                                                                    
09                 (1)  the explorer's or producer's qualified capital expenditures, as                                    
10       defined in AS 43.55.023, other lease expenditures under AS 43.55.165, and                                         
11       adjustments or other payments or credits under AS 43.55.170; and                                                  
12                 (2)  if the explorer or producer receives a payment or credit under                                     
13       AS 43.55.170, calculations showing whether the explorer or producer is liable for a                               
14       tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount; and                                         
15                 (3)  for each expenditure that is the basis for a credit claimed under                              
16       this chapter, a description of the expenditure, a detailed description of the                                 
17       purpose of the expenditure, and a description of the lease or property for which                              
18       the expenditure was incurred; notwithstanding AS 40.25.100(a) and                                             
19       AS 43.05.230(a), information submitted under this paragraph may be disclosed to                               
20       the public and shall be disclosed to the legislature in a report submitted within 10                          
21       days after the convening of the next regular legislative session following the date                           
22       a statement is filed under this section.                                                                      
23    * Sec. 33. AS 43.55.160(a) is amended to read:                                                                     
24            (a)  Except as provided in (b) [, (f), AND (g)] of this section, and subject to                          
25       adjustment under AS 43.55.162, for the purposes of                                                            
26                 (1)  AS 43.55.011(e), the annual production tax value of taxable oil,                                   
27       gas, or oil and gas produced during a calendar year in a category for which a separate                            
28       annual production tax value is required to be calculated under this paragraph is the                              
29       gross value at the point of production of that oil, gas, or oil and gas taxable under                             
30       AS 43.55.011(e), less the producer's lease expenditures under AS 43.55.165 for the                                
31       calendar year applicable to the oil, gas, or oil and gas in that category produced by the                         
01       producer during the calendar year, as adjusted under AS 43.55.170; a separate annual                              
02       production tax value shall be calculated for                                                                      
03                      (A)  oil and gas produced from leases or properties in the state                                   
04            that include land north of 68 degrees North latitude, other than gas produced                                
05            before 2022 and used in the state;                                                                           
06                      (B)  oil and gas produced from leases or properties in the state                                   
07            outside the Cook Inlet sedimentary basin, no part of which is north of 68                                    
08            degrees North latitude [AND THAT QUALIFIES FOR A TAX CREDIT                                                  
09            UNDER AS 43.55.024(a) AND (b)]; this subparagraph does not apply to                                          
10                           (i)  gas produced before 2022 and used in the state; or                                       
11                           (ii)  oil and gas subject to AS 43.55.011(p);                                                 
12                      (C)  oil produced before 2022 from each lease or property in the                                   
13            Cook Inlet sedimentary basin;                                                                                
14                      (D)  gas produced before 2022 from each lease or property in                                       
15            the Cook Inlet sedimentary basin;                                                                            
16                      (E)  gas produced before 2022 from each lease or property in                                       
17            the state outside the Cook Inlet sedimentary basin and used in the state [,                                  
18            OTHER THAN GAS SUBJECT TO AS 43.55.011(p)];                                                                  
19                      (F)  oil and gas subject to AS 43.55.011(p) produced from                                          
20            leases or properties in the state;                                                                           
21                      (G)  oil and gas produced from leases or properties in the state                                   
22            no part of which is north of 68 degrees North latitude, other than oil or gas                                
23            described in (B), (C), (D), (E), or (F) of this paragraph;                                                   
24                 (2)  AS 43.55.011(g), [FOR OIL AND GAS PRODUCED BEFORE                                                  
25       JANUARY 1, 2014,] the monthly production tax value of the taxable                                                 
26                      (A)  oil and gas produced during a month from leases or                                            
27            properties in the state that include land north of 68 degrees North latitude is the                          
28            gross value at the point of production of the oil and gas taxable under                                      
29            AS 43.55.011(e) and produced by the producer from those leases or properties,                                
30            less 1/12 of the producer's lease expenditures under AS 43.55.165 for the                                    
31            calendar year applicable to the oil and gas produced by the producer from                                    
01            those leases or properties, as adjusted under AS 43.55.170; this subparagraph                                
02            does not apply to gas subject to AS 43.55.011(o);                                                            
03                      (B)  oil and gas produced during a month from leases or                                            
04            properties in the state outside the Cook Inlet sedimentary basin, no part of                                 
05            which is north of 68 degrees North latitude, is the gross value at the point of                              
06            production of the oil and gas taxable under AS 43.55.011(e) and produced by                                  
07            the producer from those leases or properties, less 1/12 of the producer's lease                              
08            expenditures under AS 43.55.165 for the calendar year applicable to the oil and                              
09            gas produced by the producer from those leases or properties, as adjusted under                              
10            AS 43.55.170; this subparagraph does not apply to gas subject to                                             
11            AS 43.55.011(o);                                                                                             
12                      (C)  oil produced during a month from a lease or property in the                                   
13            Cook Inlet sedimentary basin is the gross value at the point of production of                                
14            the oil taxable under AS 43.55.011(e) and produced by the producer from that                                 
15            lease or property, less 1/12 of the producer's lease expenditures under                                      
16            AS 43.55.165 for the calendar year applicable to the oil produced by the                                     
17            producer from that lease or property, as adjusted under AS 43.55.170;                                        
18                      (D)  gas produced during a month from a lease or property in                                       
19            the Cook Inlet sedimentary basin is the gross value at the point of production                               
20            of the gas taxable under AS 43.55.011(e) and produced by the producer from                                   
21            that lease or property, less 1/12 of the producer's lease expenditures under                                 
22            AS 43.55.165 for the calendar year applicable to the gas produced by the                                     
23            producer from that lease or property, as adjusted under AS 43.55.170;                                        
24                      (E)  gas produced during a month from a lease or property                                          
25            outside the Cook Inlet sedimentary basin and used in the state is the gross                                  
26            value at the point of production of that gas taxable under AS 43.55.011(e) and                               
27            produced by the producer from that lease or property, less 1/12 of the                                       
28            producer's lease expenditures under AS 43.55.165 for the calendar year                                       
29            applicable to that gas produced by the producer from that lease or property, as                              
30            adjusted under AS 43.55.170.                                                                                 
31    * Sec. 34. AS 43.55 is amended by adding a new section to read:                                                    
01            Sec. 43.55.162. Reductions to production tax value. (a) The annual                                       
02       production tax value of oil produced from a lease or property north of 68 degrees                                 
03       North latitude by the producer is reduced, during the first seven consecutive years                               
04       after the start of commercial production by 20 percent of the gross value at the point of                         
05       production of oil produced during the calendar year. This subsection does not apply to                            
06       a lease or property that                                                                                          
07                 (1)  was in commercial production before January 1, 2007;                                               
08                 (2)  is located within a unit area that has never had commercial                                        
09       production; or                                                                                                    
10                 (3)  is located within a unit for more than 20 years before the first                                   
11       commercial production on the lease or property.                                                                   
12            (b)  The annual production tax value of oil or gas produced by a producer is                                 
13       reduced during the first five consecutive years after the start of commercial production                          
14       by 10 percent if the oil or gas is produced from a participating area established after                           
15       December 31, 2012, that is within a unit formed under AS 38.05.180(p) before                                      
16       January 1, 2003, if the participating area does not contain a reservoir that had                                  
17       previously been in a participating area established before January 1, 2012. This                                  
18       subsection does not apply to production from a lease or property located within a unit                            
19       for more than 20 years before the first commercial production on the lease or property.                           
20            (c)  The annual production tax value of heavy oil produced by a producer is                                  
21       reduced by 10 percent of the gross value at the point of production of heavy oil                                  
22       produced, for the calendar year, from a lease or property that is located within a unit                           
23       area existing on January 1, 2014.                                                                                 
24            (d)  For a calendar year after 2012, the annual production tax value of oil                                  
25       produced by a producer that produced oil in 2012 is reduced by 10 percent of the gross                            
26       value at the point of production of the volume of oil produced during the calendar year                           
27       in excess of the total volume produced by the producer in 2012. The volume of oil                                 
28       produced by a producer in 2012 is the average daily statewide production of the                                   
29       producer, excluding from the calculation the days on which production is significantly                            
30       reduced, multiplied by the number of days in the calendar year. For the purposes of                               
31       this subsection, production is significantly reduced when the production volume of oil                            
01       for the day is less than one-half of the quotient of the total volume of oil production                           
02       that is produced by the producer for the year and the number of days in the calendar                              
03       year. A producer that increases its volume of production through the purchase, merger,                            
04       or other acquisition of another producer is the sum of the producer's total target                                
05       volume and the total target volume for the producer that is purchased, merged with, or                            
06       otherwise acquired; however, if the producer that is purchased, merged with, or                                   
07       otherwise acquired did not have a target volume determined under this section, the                                
08       volume of the increased production that is attributable to the purchase, merger, or                               
09       other acquisition may not be considered for the purpose of determining whether the                                
10       producer that acquired the additional production has increased the volume of                                      
11       production above its target volume.                                                                               
12            (e)  A reduction in production tax value provided by this section may not be                                 
13       combined with any other reduction in production tax value provided by this section in                             
14       the same year. Oil or gas from a lease or property that produces oil or gas that results                          
15       in a production tax reduction under (a) of this section is ineligible for a production tax                        
16       reduction under (b) and (c) of this section and may not be used in the calculation of                             
17       production volume under (d) of this section.                                                                      
18            (f)  A reduction in production tax value provided by this section may not                                    
19       reduce the                                                                                                        
20                 (1)  production tax value of a producer below zero; or                                                  
21                 (2)  total tax liability of a producer below the amount specified in                                    
22       AS 43.55.011(f).                                                                                                  
23            (g)  The rate of tax under AS 43.55.011(g) shall be determined before the                                    
24       application of the adjustment provided by this section.                                                           
25            (h)  In this section,                                                                                        
26                 (1)  "commercial production" means the production of oil for the                                        
27       purpose of sale or other beneficial use, except when the sale or beneficial use is                                
28       incidental to the testing of an unproved well or unproved completion interval;                                    
29                 (2)  "participating area" means that part of an oil and gas lease unit to                               
30       which production is allocated in the manner described in a unit agreement.                                        
31    * Sec. 35. AS 43.55.990 is amended by adding a new paragraph to read:                                              
01                 (14)  "heavy oil" means oil with an American Petroleum Institute                                        
02       gravity of less than 18 degrees.                                                                                  
03    * Sec. 36. AS 43.56.160 is amended to read:                                                                        
04            Sec. 43.56.160. Interest and penalty. When the tax levied by AS 43.56.010(a)                               
05       becomes delinquent, a penalty of 10 percent shall be added. Interest [BEFORE                                  
06       JANUARY 1, 2014, INTEREST] on the delinquent taxes, exclusive of penalty, shall                                   
07       be assessed at a rate of eight percent a year. [ON AND AFTER JANUARY 1, 2014,                                     
08       INTEREST ON THE DELINQUENT TAXES, EXCLUSIVE OF PENALTY,                                                           
09       SHALL BE ASSESSED AT THE RATE SPECIFIED IN AS 43.05.225.]                                                         
10    * Sec. 37. AS 44.88.080 is amended to read:                                                                        
11            Sec. 44.88.080. Powers of the authority. In furtherance of its corporate                                   
12       purposes, the authority has the following powers in addition to its other powers:                                 
13                 (1)  to sue and be sued;                                                                                
14                 (2)  to have a seal and alter it at pleasure;                                                           
15                 (3)  to make and alter bylaws for its organization and internal                                         
16       management;                                                                                                       
17                 (4)  to adopt regulations governing the exercise of its corporate powers;                               
18                 (5)  to acquire an interest in a project as necessary or appropriate to                                 
19       provide financing for the project, whether by purchase, gift, or lease;                                           
20                 (6)  to lease to others a project acquired by it for the rentals and upon                               
21       the terms and conditions the authority may consider advisable, including, without                                 
22       limitation, provisions for options to purchase or renew;                                                          
23                 (7)  to issue bonds and otherwise to incur indebtedness, in accordance                                  
24       with AS 44.88.090, in order to pay the cost of a project or development projects or in                            
25       order to provide money for the authority's purposes under this chapter; the authority                             
26       may also secure payment of the bonds or other indebtedness as provided in this                                    
27       chapter;                                                                                                          
28                 (8)  to sell, by installment sale or otherwise, exchange, donate, convey,                               
29       or encumber, in any manner by mortgage or by creation of any other security interest,                             
30       real or personal property owned by it, or in which it has an interest, including a                                
31       project, when, in the judgment of the authority, the action is in furtherance of its                              
01       corporate purposes;                                                                                               
02                 (9)  to accept gifts, grants, or loans from, and enter into contracts or                                
03       other transactions regarding them with, a federal agency, an agency or instrumentality                            
04       of the state, a municipality, a private organization, or other source;                                            
05                 (10)  to deposit or invest its funds, subject to agreements with                                        
06       bondholders;                                                                                                      
07                 (11)  to enter into contracts or agreements with respect to the exercise                                
08       of any of its powers, and do all things necessary or convenient to carry out its                                  
09       corporate purposes and exercise the powers granted in this chapter;                                               
10                 (12)  to purchase or insure loans to finance the costs of manufacturing,                                
11       industrial, and business enterprise projects;                                                                     
12                 (13)  to enter into loan agreements with respect to one or more projects                                
13       upon the terms and conditions the authority considers advisable;                                                  
14                 (14)  to acquire, manage, and operate projects as the authority considers                               
15       necessary or appropriate to serve a public purpose;                                                               
16                 (15)  to assist private lenders to make loans to finance the costs of                                   
17       projects through loan commitments, short-term financing, or otherwise;                                            
18                 (16)  to accept gifts, grants, or loans from a federal agency, from an                                  
19       agency or instrumentality of the state or of a municipality, or from any other source;                            
20                 (17)  to enter into contracts or other transactions with a federal agency,                              
21       with an agency or instrumentality of the state or of a municipality, or with a private                            
22       organization or other entity consistent with the exercise of any power under this                                 
23       chapter;                                                                                                          
24                 (18)  to facilitate the expansion of a secondary market for the resale of                               
25       federally or commercially insured loans made to finance the costs of projects in the                              
26       state held by federal and state chartered financial institutions or by the Alaska                                 
27       Commercial Fishing and Agriculture Bank;                                                                          
28                 (19)  to charge fees or other forms of remuneration for the use or                                      
29       possession of the projects described in (14) of this section in accordance with the                               
30       agreements described in (11) and (17) of this section, other agreements pertaining to                             
31       the projects, covenants, or representations made in bond documents pertaining to the                              
01       projects, or regulations of the authority pertaining to the projects;                                             
02                 (20)  to participate with government or private industry in programs for                                
03       technical assistance, loans, technology, transfer, or other programs related to the                               
04       exportation of goods, services, or raw materials of the state with respect to its                                 
05       financing activities;                                                                                             
06                 (21)  to provide export finance training for office staff and other                                     
07       individuals involved in export finance assistance, including the training sessions that                           
08       may be provided by the United States Export-Import Bank or other organizations;                                   
09                 (22)  to coordinate to the maximum extent possible its efforts to                                       
10       promote the export of goods, services, and raw materials of the state with programs                               
11       and goals of the United States Export-Import Bank, the International Trade                                        
12       Administration of the United States Department of Commerce, the Foreign Credit                                    
13       Insurance Association, and other private and public programs designed to provide                                  
14       export assistance and export-related financing;                                                                   
15                 (23)  to guarantee loans related to qualified export transactions under                                 
16       regulations adopted by the authority;                                                                             
17                 (24)  to provide financing assistance, in cooperation with federal, state,                              
18       and private institutions, as provided in this chapter for small business enterprises;                             
19                 (25)  to make cooperative agreements with the Department of                                             
20       Transportation and Public Facilities, acting on behalf of the international airports                              
21       revenue fund established under AS 37.15.430, to acquire, equip, operate, maintain,                                
22       construct, or install facilities that will enhance the competitiveness of the international                       
23       airports, including a cooperative agreement to lend amounts from the international                                
24       airports revenue fund to finance the development or improvement of utilities serving                              
25       the airports;                                                                                                     
26                 (26)  to screen potential applicants for a new business incentive grant                                 
27       and recommend the award of the grants under AS 45.81.020;                                                         
28                 (27)  to oversee the administration of outstanding grants awarded by the                                
29       Alaska Science and Technology Foundation under former AS 37.17.010 - 37.17.110;                                   
30                 (28)  to oversee the administration of outstanding BIDCO assistance                                     
31       grants and loans made by the Alaska Science and Technology Foundation under                                       
01       former AS 37.17.200 - 37.17.390;                                                                                  
02                 (29)  to guarantee loans made to the Alaska Insurance Guaranty                                          
03       Association (AS 21.80.040), with these guarantees limited to loans necessary to make                              
04       the association financially able to meet cash flow needs up to a maximum outstanding                              
05       principal balance at any time of $30,000,000;                                                                     
06                 (30)  with legislative approval and notwithstanding AS 44.88.060, to                                    
07       purchase from the Alaska Energy Authority as an investment of the revolving fund,                                 
08       loans of the power project fund established under AS 42.45.010;                                                   
09                 (31)  to consider, when exercising the powers listed in this section, the                               
10       interests of local governments affected by the authority's activities to share in the                             
11       benefits of these activities, with appropriate consideration of the authority's ability to                        
12       meet debt obligations, issue new debt, and fulfill the authority's purposes;                                      
13                 (32)  to provide development project financing for all or a portion of                                  
14       the cost of a development project as provided in AS 44.88.172;                                                
15                 (33)  to acquire an interest in a project as necessary or appropriate                               
16       to provide working or venture capital for an oil or natural gas development                                   
17       project under AS 44.88.800 and 44.88.810, whether by purchase, gift, or lease.                                
18    * Sec. 38. AS 44.88 is amended by adding a new section to read:                                                    
19            Sec. 44.88.089. Legislative approval of loan for North Slope oil processing                                
20       facility. (a) The Alaska Industrial Development and Export Authority may issue a loan                           
21       to a producer of oil or gas to finance the construction and improvement of an oil                                 
22       processing facility on the Alaska North Slope and flow lines and other surface                                    
23       infrastructure for the facility. A loan under this section shall                                                  
24                 (1)  be issued to a producer that produces less than 100,000 barrels of                                 
25       oil a day;                                                                                                        
26                 (2)  be issued for the purpose of financing a facility to facilitate                                    
27       production from a unit established after January 1, 2015; and                                                     
28                 (3)  have an interest rate that does not exceed the prime rate of interest                              
29       plus one percent.                                                                                                 
30            (b)  In this section, "prime rate" means the lowest United States money center                               
31       prime rate of interest that is published in the Wall Street Journal.                                              
01    * Sec. 39. AS 44.88 is amended by adding new sections to read:                                                     
02                 Article 9A. Interest in Oil and Gas Resources.                                                        
03            Sec. 44.88.800. Acquisition of interest in businesses. (a) The authority may                               
04       acquire, through purchase or other means, an interest in a lease held by a corporation                            
05       or other business entity in an oil or natural gas field in the state that has been explored,                      
06       but only if the authority determines the leaseholder has made reasonable efforts to                               
07       obtain financing from the private sector to develop the lease and those efforts have, in                          
08       whole or part, been unsuccessful. The authority shall exercise due diligence in                                   
09       acquiring a leasehold interest under this section.                                                                
10            (b)  If the authority acquires a leasehold interest under this section, the                                  
11       authority may use the authority's assets, as appropriate, to aid in the development of                            
12       the oil or natural gas field in which the business entity has a leasehold interest.                               
13            Sec. 44.88.810. Alaska resource development fund. (a) The Alaska resource                                  
14       development fund is established in the authority for the purpose of developing oil and                            
15       gas resources, and consists of appropriations to the fund. The authority shall manage                             
16       the fund and may create separate accounts within it. Income of the fund or of                                     
17       enterprises of the authority shall be separately accounted for and may be appropriated                            
18       to the fund.                                                                                                      
19            (b)  The authority may use money from the fund to carry out the purpose of the                               
20       fund set out in (a) of this section.                                                                              
21    * Sec. 40. AS 44.88.900(11) is amended to read:                                                                    
22                 (11)  "project" means                                                                                   
23                      (A)  a plant or facility used or intended for use in connection                                    
24            with making, processing, preparing, transporting, or producing in any manner,                                
25            goods, products, or substances of any kind or nature or in connection with                                   
26            developing or utilizing a natural resource, or extracting, smelting, transporting,                           
27            converting, assembling, or producing in any manner, minerals, raw materials,                                 
28            chemicals, compounds, alloys, fibers, commodities and materials, products, or                                
29            substances of any kind or nature;                                                                            
30                      (B)  a plant or facility used or intended for use in connection                                    
31            with a business enterprise;                                                                                  
01                      (C)  commercial activity by a business enterprise;                                                 
02                      (D)  a plant or facility demonstrating technological advances of                                   
03            new methods and procedures and prototype commercial applications for the                                     
04            exploration, development, production, transportation, conversion, and use of                                 
05            energy resources;                                                                                            
06                      (E)  infrastructure for a new tourism destination facility or for                                  
07            the expansion of a tourism destination facility; in this subparagraph, "tourism                              
08            destination facility" does not include a hotel or other overnight lodging facility;                          
09                      (F)  a plant or facility, other than a plant or facility described in                              
10            (D) of this paragraph, for the generation, transmission, development,                                        
11            transportation, conversion, or use of energy resources;                                                      
12                      (G)  a plant or facility that enhances, provides for, or promotes                                  
13            economic development with respect to transportation, communications,                                         
14            community public purposes, technical innovations, prototype commercial                                       
15            applications of intellectual property, or research;                                                          
16                      (H)  a plant or facility used or intended for use as a federal                                     
17            facility, including a United States military, national guard, or coast guard                                 
18            facility;                                                                                                    
19                      (I)  infrastructure for an area that is designated as a military                                   
20            facility zone under AS 26.30;                                                                                
21                      (J)  development of an oil and gas field by providing                                          
22            working or venture capital in exchange for an equity interest;                                           
23    * Sec. 41. AS 43.20.049; AS 43.55.020(l), 43.55.024(i), 43.55.024(j), 43.55.160(f),                                
24 43.55.160(g); AS 43.98.040, 43.98.050, 43.98.060, and 43.98.070 are repealed.                                           
25    * Sec. 42. Sections 34 - 38, ch. 10, SLA 2013, are repealed.                                                       
26    * Sec. 43. The uncodified law of the State of Alaska is amended by adding a new section to                         
27 read:                                                                                                                   
28       APPLICABILITY. (a) Section 2 of this Act and AS 38.05.180(hh), enacted by sec. 4                                  
29 of this Act, apply to a proposed lease sale and the renewal or extension of a lease on or after                         
30 the effective date of this Act.                                                                                         
31       (b)  The reductions in production tax value under AS 43.55.162, enacted by sec. 34 of                             
01 this Act, apply to oil or gas produced after December 31, 2014.                                                         
02    * Sec. 44. AS 44.88.089 is repealed June 30, 2018.                                                                 
03    * Sec. 45. This Act takes effect January 1, 2015.