HCS CSSB 21(FIN) am H: "An Act relating to the interest rate applicable to certain amounts due for fees, taxes, and payments made and property delivered to the Department of Revenue; relating to appropriations from taxes paid under the Alaska Net Income Tax Act; providing a tax credit against the corporation income tax for qualified oil and gas service industry expenditures; relating to the oil and gas production tax rate; relating to gas used in the state; relating to monthly installment payments of the oil and gas production tax; relating to oil and gas production tax credits for certain losses and expenditures; relating to oil and gas production tax credit certificates; relating to nontransferable tax credits based on production; relating to the oil and gas tax credit fund; relating to annual statements by producers and explorers; establishing an Oil and Gas Competitiveness Review Board; relating to the determination of annual oil and gas production tax value including adjustments based on a percentage of gross value at the point of production from certain leases or properties; and making conforming amendments."
00 HOUSE CS FOR CS FOR SENATE BILL NO. 21(FIN) am H 01 "An Act relating to the interest rate applicable to certain amounts due for fees, taxes, 02 and payments made and property delivered to the Department of Revenue; relating to 03 appropriations from taxes paid under the Alaska Net Income Tax Act; providing a tax 04 credit against the corporation income tax for qualified oil and gas service industry 05 expenditures; relating to the oil and gas production tax rate; relating to gas used in the 06 state; relating to monthly installment payments of the oil and gas production tax; 07 relating to oil and gas production tax credits for certain losses and expenditures; 08 relating to oil and gas production tax credit certificates; relating to nontransferable tax 09 credits based on production; relating to the oil and gas tax credit fund; relating to 10 annual statements by producers and explorers; establishing an Oil and Gas 11 Competitiveness Review Board; relating to the determination of annual oil and gas 12 production tax value including adjustments based on a percentage of gross value at the
01 point of production from certain leases or properties; and making conforming 02 amendments." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 29.60.850(b) is amended to read: 05 (b) Each fiscal year, the legislature may appropriate to the community revenue 06 sharing fund [AN AMOUNT EQUAL TO 20 PERCENT OF THE] money received by 07 the state during the previous calendar year under AS 43.20.030(c) [AS 43.55.011(g)]. 08 The amount may not exceed 09 (1) $60,000,000; or 10 (2) the amount that, when added to the fund balance on June 30 of the 11 previous fiscal year, equals $180,000,000. 12 * Sec. 2. AS 43.05.225 is amended to read: 13 Sec. 43.05.225. Interest. Unless otherwise provided, 14 (1) a delinquent tax under this title, 15 (A) before January 1, 2014, [WHEN A TAX LEVIED IN 16 THIS TITLE BECOMES DELINQUENT, IT] bears interest in each [A] 17 calendar quarter at the rate of five percentage points above the annual rate 18 charged member banks for advances by the 12th Federal Reserve District as of 19 the first day of that calendar quarter, or at the annual rate of 11 percent, 20 whichever is greater, compounded quarterly as of the last day of that quarter; 21 or 22 (B) on and after January 1, 2014, bears interest in each 23 calendar quarter at the rate of three percentage points above the annual 24 rate charged member banks for advances by the 12th Federal Reserve 25 District as of the first day of that calendar quarter; 26 (2) the interest rate is 12 percent a year for 27 (A) delinquent fees payable under AS 05.15.095(c); and 28 (B) unclaimed property that is not timely paid or delivered, as 29 allowed by AS 34.45.470(a). 30 * Sec. 3. AS 43.20 is amended by adding a new section to read:
01 Sec. 43.20.049. Qualified oil and gas service industry expenditure credit. 02 (a) For a tax year beginning after December 31, 2013, a taxpayer may apply a credit 03 against the tax due under this chapter for a qualified oil and gas service industry 04 expenditure incurred in the state. The total amount of credit a taxpayer may receive in 05 a tax year may not exceed the lesser of 10 percent of qualified oil and gas service 06 industry expenditures incurred in the state during the tax year or $10,000,000. 07 (b) A taxpayer may not apply more than $10,000,000 in tax credits under this 08 section in a tax year. A tax credit or portion of a tax credit under this section may not 09 be used to reduce the taxpayer's tax liability under this chapter below zero. Any 10 unused tax credit or portion of a tax credit under this section may be applied in later 11 tax years, except that any unused tax credit or portion of a tax credit may not be 12 carried forward for more than five tax years immediately following the tax year in 13 which the qualified oil and gas service industry expenditures were incurred. 14 (c) An expenditure that is the basis of the credit under this section may not be 15 the basis for 16 (1) a deduction against the tax levied under this chapter; 17 (2) a credit or deduction under another provision of this title; or 18 (3) any federal credit claimed under this title. 19 (d) Notwithstanding any contrary provision of AS 40.25.100(a) or 20 AS 43.05.230(e), for a year that three or more taxpayers claim a tax credit under this 21 section, the department may publish the aggregated amount of tax credits claimed 22 under this section and a description of the qualified oil and gas service industry 23 expenditures that were the basis for a tax credit under this section. 24 (e) In this section, 25 (1) "manufacture" means to perform substantial industrial operations in 26 the state to transform raw material into tangible personal property with a useful life of 27 three years or more for use in the exploration for, development of, or production of oil 28 or gas deposits; 29 (2) "modification" means an adjustment, equipping, or other alteration 30 to existing tangible personal property that has a useful life of three years or more and 31 is for use in the exploration for, development of, or production of oil or gas deposits;
01 "modification" does not include minor product alterations or inventory activities; 02 (3) "qualified oil and gas service industry expenditure" means an 03 expenditure directly attributable to an in-state manufacture or in-state modification of 04 tangible personal property used in the exploration for, development of, or production 05 of oil or gas deposits, but does not include components or equipment used for or in the 06 process of that manufacturing or modification. 07 * Sec. 4. AS 43.55.011(e) is amended to read: 08 (e) There is levied on the producer of oil or gas a tax for all oil and gas 09 produced each calendar year from each lease or property in the state, less any oil and 10 gas the ownership or right to which is exempt from taxation or constitutes a 11 landowner's royalty interest. Except as otherwise provided under (f), (j), (k), (o), and 12 (p) of this section, [THE TAX IS EQUAL TO] 13 (1) before January 1, 2014, the tax is equal to the sum of 14 (A) the annual production tax value of the taxable oil and gas 15 as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and 16 (B) [(2)] the sum, over all months of the calendar year, of the 17 tax amounts determined under (g) of this section; 18 (2) on and after January 1, 2014, the tax is equal to the annual 19 production tax value of the taxable oil and gas as calculated under 20 AS 43.55.160(a)(1) multiplied by 35 percent. 21 * Sec. 5. AS 43.55.011(g) is amended to read: 22 (g) For each month of a [THE] calendar year before 2014 for which the 23 producer's average monthly production tax value under AS 43.55.160(a)(2) of a [PER] 24 BTU equivalent barrel of the taxable oil and gas is more than $30, the amount of tax 25 for purposes of (e)(1)(B) [(e)(2)] of this section is determined by multiplying the 26 monthly production tax value of the taxable oil and gas produced during the month by 27 the tax rate calculated as follows: 28 (1) if the producer's average monthly production tax value of a [PER] 29 BTU equivalent barrel of the taxable oil and gas for the month is not more than 30 $92.50, the tax rate is 0.4 percent multiplied by the number that represents the 31 difference between that average monthly production tax value of a [PER] BTU
01 equivalent barrel and $30; or 02 (2) if the producer's average monthly production tax value of a [PER] 03 BTU equivalent barrel of the taxable oil and gas for the month is more than $92.50, 04 the tax rate is the sum of 25 percent and the product of 0.1 percent multiplied by the 05 number that represents the difference between the average monthly production tax 06 value of a [PER] BTU equivalent barrel and $92.50, except that the sum determined 07 under this paragraph may not exceed 50 percent. 08 * Sec. 6. AS 43.55.011(i) is amended to read: 09 (i) There is levied on the producer of oil or gas a tax for all oil and gas 10 produced each calendar year from each lease or property in the state the ownership or 11 right to which constitutes a landowner's royalty interest, except for oil and gas the 12 ownership or right to which is exempt from taxation. The provisions of this subsection 13 apply to a landowner's royalty interest as follows: 14 (1) the tax levied for oil is equal to five percent of the gross value at 15 the point of production of the oil; 16 (2) the tax levied for gas is equal to 1.667 percent of the gross value at 17 the point of production of the gas; 18 (3) if the department determines that, for purposes of reducing the 19 producer's tax liability under (1) or (2) of this subsection, the producer has received or 20 will receive consideration from the royalty owner offsetting all or a part of the 21 producer's royalty obligation, other than a deduction under AS 43.55.020 related to a 22 settlement with a royalty owner [AS 43.55.020(d)] of the amount of a tax paid, then, 23 notwithstanding (1) and (2) of this subsection, the tax is equal to 25 percent of the 24 gross value at the point of production of the oil and gas. 25 * Sec. 7. AS 43.55.011(o) is amended to read: 26 (o) Notwithstanding other provisions of this section, for a calendar year before 27 2022, the tax levied under (e) of this section for each 1,000 cubic feet of gas for gas 28 produced from a lease or property outside the Cook Inlet sedimentary basin and used 29 in the state, other than gas subject to (p) of this section, may not exceed the amount 30 of tax for each 1,000 cubic feet of gas that is determined under (j)(2) of this section. 31 * Sec. 8. AS 43.55.011(p) is amended to read:
01 (p) For the seven years immediately following the commencement of 02 commercial production of oil or gas produced from leases or properties in the state 03 that are outside the Cook Inlet sedimentary basin and that do not include land located 04 north of 68 degrees North latitude, where that commercial production began after 05 December 31, 2012, and before January 1, 2027 [2022], the levy of tax under (e) of 06 this section for oil and gas may not exceed four percent of the gross value at the point 07 of production. 08 * Sec. 9. AS 43.55.020(a) is amended to read: 09 (a) For a calendar year, a producer subject to tax under AS 43.55.011 10 [AS 43.55.011(e) - (i) OR (p)] shall pay the tax as follows: 11 (1) before January 1, 2014, an installment payment of the estimated 12 tax levied by AS 43.55.011(e), net of any tax credits applied as allowed by law, is due 13 for each month of the calendar year on the last day of the following month; except as 14 otherwise provided under (2) of this subsection, the amount of the installment payment 15 is the sum of the following amounts, less 1/12 of the tax credits that are allowed by 16 law to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but 17 the amount of the installment payment may not be less than zero: 18 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 19 produced from leases or properties in the state outside the Cook Inlet 20 sedimentary basin [BUT NOT SUBJECT TO AS 43.55.011(o) OR (p)], other 21 than leases or properties subject to AS 43.55.011(f), the greater of 22 (i) zero; or 23 (ii) the sum of 25 percent and the tax rate calculated for 24 the month under AS 43.55.011(g) multiplied by the remainder obtained 25 by subtracting 1/12 of the producer's adjusted lease expenditures for the 26 calendar year of production under AS 43.55.165 and 43.55.170 that are 27 deductible for the oil and gas [LEASES OR PROPERTIES] under 28 AS 43.55.160 from the gross value at the point of production of the oil 29 and gas produced from the leases or properties during the month for 30 which the installment payment is calculated; 31 (B) for oil and gas produced from leases or properties subject
01 to AS 43.55.011(f), the greatest of 02 (i) zero; 03 (ii) zero percent, one percent, two percent, three 04 percent, or four percent, as applicable, of the gross value at the point of 05 production of the oil and gas produced from the [ALL] leases or 06 properties during the month for which the installment payment is 07 calculated; or 08 (iii) the sum of 25 percent and the tax rate calculated for 09 the month under AS 43.55.011(g) multiplied by the remainder obtained 10 by subtracting 1/12 of the producer's adjusted lease expenditures for the 11 calendar year of production under AS 43.55.165 and 43.55.170 that are 12 deductible for the oil and gas [THOSE LEASES OR PROPERTIES] 13 under AS 43.55.160 from the gross value at the point of production of 14 the oil and gas produced from those leases or properties during the 15 month for which the installment payment is calculated; 16 (C) for oil or [AND] gas [PRODUCED FROM EACH LEASE 17 OR PROPERTY] subject to AS 43.55.011(j), (k), or (o) [, OR (p)], for each 18 lease or property, the greater of 19 (i) zero; or 20 (ii) the sum of 25 percent and the tax rate calculated for 21 the month under AS 43.55.011(g) multiplied by the remainder obtained 22 by subtracting 1/12 of the producer's adjusted lease expenditures for the 23 calendar year of production under AS 43.55.165 and 43.55.170 that are 24 deductible under AS 43.55.160 for the oil or gas, respectively, 25 produced from the lease or property from the gross value at the point of 26 production of the oil or gas, respectively, produced from the lease or 27 property during the month for which the installment payment is 28 calculated; 29 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 30 (i) the sum of 25 percent and the tax rate calculated 31 for the month under AS 43.55.011(g) multiplied by the remainder
01 obtained by subtracting 1/12 of the producer's adjusted lease 02 expenditures for the calendar year of production under 03 AS 43.55.165 and 43.55.170 that are deductible for the oil and gas 04 under AS 43.55.160 from the gross value at the point of production 05 of the oil and gas produced from the leases or properties during the 06 month for which the installment payment is calculated, but not less 07 than zero; or 08 (ii) four percent of the gross value at the point of 09 production of the oil and gas produced from the leases or 10 properties during the month, but not less than zero; 11 (2) an amount calculated under (1)(C) of this subsection for oil or gas 12 [PRODUCED FROM A LEASE OR PROPERTY 13 (A)] subject to AS 43.55.011(j), (k), or (o) may not exceed the 14 product obtained by carrying out the calculation set out in AS 43.55.011(j)(1) 15 or (2) or 43.55.011(o), as applicable, for gas or set out in AS 43.55.011(k)(1) 16 or (2), as applicable, for oil, but substituting in AS 43.55.011(j)(1)(A) or (2)(A) 17 or 43.55.011(o), as applicable, the amount of taxable gas produced during the 18 month for the amount of taxable gas produced during the calendar year and 19 substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the amount of 20 taxable oil produced during the month for the amount of taxable oil produced 21 during the calendar year; 22 [(B) SUBJECT TO AS 43.55.011(p) MAY NOT EXCEED 23 FOUR PERCENT OF THE GROSS VALUE AT THE POINT OF 24 PRODUCTION OF THE OIL OR GAS;] 25 (3) an installment payment of the estimated tax levied by 26 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 27 on the last day of the following month; the amount of the installment payment is the 28 sum of 29 (A) the applicable tax rate for oil provided under 30 AS 43.55.011(i), multiplied by the gross value at the point of production of the 31 oil taxable under AS 43.55.011(i) and produced from the lease or property
01 during the month; and 02 (B) the applicable tax rate for gas provided under 03 AS 43.55.011(i), multiplied by the gross value at the point of production of the 04 gas taxable under AS 43.55.011(i) and produced from the lease or property 05 during the month; 06 (4) any amount of tax levied by AS 43.55.011 [AS 43.55.011(e) OR 07 (i)], net of any credits applied as allowed by law, that exceeds the total of the amounts 08 due as installment payments of estimated tax is due on March 31 of the year following 09 the calendar year of production; 10 (5) on and after January 1, 2014, an installment payment of the 11 estimated tax levied by AS 43.55.011(e), net of any tax credits applied as allowed 12 by law, is due for each month of the calendar year on the last day of the following 13 month; except as otherwise provided under (6) of this subsection, the amount of 14 the installment payment is the sum of the following amounts, less 1/12 of the tax 15 credits that are allowed by law to be applied against the tax levied by 16 AS 43.55.011(e) for the calendar year, but the amount of the installment payment 17 may not be less than zero: 18 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 19 produced from leases or properties in the state outside the Cook Inlet 20 sedimentary basin, other than leases or properties subject to 21 AS 43.55.011(f), the greater of 22 (i) zero; or 23 (ii) 35 percent multiplied by the remainder obtained 24 by subtracting 1/12 of the producer's adjusted lease expenditures 25 for the calendar year of production under AS 43.55.165 and 26 43.55.170 that are deductible for the oil and gas under 27 AS 43.55.160 from the gross value at the point of production of the 28 oil and gas produced from the leases or properties during the 29 month for which the installment payment is calculated; 30 (B) for oil and gas produced from leases or properties 31 subject to AS 43.55.011(f), the greatest of
01 (i) zero; 02 (ii) zero percent, one percent, two percent, three 03 percent, or four percent, as applicable, of the gross value at the 04 point of production of the oil and gas produced from the leases or 05 properties during the month for which the installment payment is 06 calculated; or 07 (iii) 35 percent multiplied by the remainder obtained 08 by subtracting 1/12 of the producer's adjusted lease expenditures 09 for the calendar year of production under AS 43.55.165 and 10 43.55.170 that are deductible for the oil and gas under 11 AS 43.55.160 from the gross value at the point of production of the 12 oil and gas produced from those leases or properties during the 13 month for which the installment payment is calculated, except that, 14 for the purposes of this calculation, a reduction from the gross 15 value at the point of production may apply for oil and gas subject 16 to AS 43.55.160(f) or (g); 17 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 18 each lease or property, the greater of 19 (i) zero; or 20 (ii) 35 percent multiplied by the remainder obtained 21 by subtracting 1/12 of the producer's adjusted lease expenditures 22 for the calendar year of production under AS 43.55.165 and 23 43.55.170 that are deductible under AS 43.55.160 for the oil or gas, 24 respectively, produced from the lease or property from the gross 25 value at the point of production of the oil or gas, respectively, 26 produced from the lease or property during the month for which 27 the installment payment is calculated; 28 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 29 (i) 35 percent multiplied by the remainder obtained 30 by subtracting 1/12 of the producer's adjusted lease expenditures 31 for the calendar year of production under AS 43.55.165 and
01 43.55.170 that are deductible for the oil and gas under 02 AS 43.55.160 from the gross value at the point of production of the 03 oil and gas produced from the leases or properties during the 04 month for which the installment payment is calculated, but not less 05 than zero; or 06 (ii) four percent of the gross value at the point of 07 production of the oil and gas produced from the leases or 08 properties during the month, but not less than zero; 09 (6) an amount calculated under (5)(C) of this subsection for oil or 10 gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 11 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 12 applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, 13 but substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, 14 the amount of taxable gas produced during the month for the amount of taxable 15 gas produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) 16 or (2)(A), as applicable, the amount of taxable oil produced during the month for 17 the amount of taxable oil produced during the calendar year. 18 * Sec. 10. AS 43.55.020(d) is amended to read: 19 (d) Before January 1, 2014, in [IN] making settlement with the royalty owner 20 for oil and gas that is taxable under AS 43.55.011, the producer may deduct the 21 amount of the tax paid on taxable royalty oil and gas, or may deduct taxable royalty oil 22 or gas equivalent in value at the time the tax becomes due to the amount of the tax 23 paid. If the total deductions of installment payments of estimated tax for a calendar 24 year exceed the actual tax for that calendar year, the producer shall, before April 1 of 25 the following year, refund the excess to the royalty owner. Unless otherwise agreed 26 between the producer and the royalty owner, the amount of the tax paid under 27 AS 43.55.011(e) - (g) on taxable royalty oil and gas for a calendar year, other than oil 28 and gas the ownership or right to which constitutes a landowner's royalty interest, is 29 considered to be the gross value at the point of production of the taxable royalty oil 30 and gas produced during the calendar year multiplied by a figure that is a quotient, in 31 which
01 (1) the numerator is the producer's total tax liability under 02 AS 43.55.011(e) - (g) for the calendar year of production; and 03 (2) the denominator is the total gross value at the point of production 04 of the oil and gas taxable under AS 43.55.011(e) - (g) produced by the producer from 05 all leases and properties in the state during the calendar year. 06 * Sec. 11. AS 43.55.020(g) is amended to read: 07 (g) Notwithstanding any contrary provision of AS 43.05.225, 08 (1) before January 1, 2014, an unpaid amount of an installment 09 payment required under (a)(1) - (3) of this section that is not paid when due bears 10 interest (A) [(1)] at the rate provided for an underpayment under 26 U.S.C. 6621 11 (Internal Revenue Code), as amended, compounded daily, from the date the 12 installment payment is due until March 31 following the calendar year of production, 13 and (B) [(2)] as provided for a delinquent tax under AS 43.05.225 after that March 31; 14 interest [. INTEREST] accrued under (A) [(1)] of this paragraph [SUBSECTION] 15 that remains unpaid after that March 31 is treated as an addition to tax that bears 16 interest under (B) [(2)] of this paragraph; an [SUBSECTION. AN] unpaid amount of 17 tax due under (a)(4) of this section that is not paid when due bears interest as provided 18 for a delinquent tax under AS 43.05.225; 19 (2) on and after January 1, 2014, an unpaid amount of an 20 installment payment required under (a)(3), (5), or (6) of this section that is not 21 paid when due bears interest (A) at the rate provided for an underpayment 22 under 26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, 23 from the date the installment payment is due until March 31 following the 24 calendar year of production, and (B) as provided for a delinquent tax under 25 AS 43.05.225 after that March 31; interest accrued under (A) of this paragraph 26 that remains unpaid after that March 31 is treated as an addition to tax that 27 bears interest under (B) of this paragraph; an unpaid amount of tax due under 28 (a)(4) of this section that is not paid when due bears interest as provided for a 29 delinquent tax under AS 43.05.225. 30 * Sec. 12. AS 43.55.020(h) is amended to read: 31 (h) Notwithstanding any contrary provision of AS 43.05.280,
01 (1) an overpayment of an installment payment required under (a)(1) - 02 (3), (5) or (6) of this section bears interest at the rate provided for an overpayment 03 under 26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from 04 the later of the date the installment payment is due or the date the overpayment is 05 made, until the earlier of 06 (A) the date it is refunded or is applied to an underpayment; or 07 (B) March 31 following the calendar year of production; 08 (2) except as provided under (1) of this subsection, interest with 09 respect to an overpayment is allowed only on any net overpayment of the payments 10 required under (a) of this section that remains after the later of March 31 following the 11 calendar year of production or the date that the statement required under 12 AS 43.55.030(a) is filed; 13 (3) interest is allowed under (2) of this subsection only from a date that 14 is 90 days after the later of March 31 following the calendar year of production or the 15 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 16 if the overpayment was refunded within the 90-day period; 17 (4) interest under (2) and (3) of this subsection is paid at the rate and in 18 the manner provided in AS 43.05.225(1). 19 * Sec. 13. AS 43.55.020 is amended by adding a new subsection to read: 20 (l) On and after January 1, 2014, in making settlement with the royalty owner 21 for oil and gas that is taxable under AS 43.55.011, the producer may deduct the 22 amount of the tax paid on taxable royalty oil and gas, or may deduct taxable royalty oil 23 or gas equivalent in value at the time the tax becomes due to the amount of the tax 24 paid. If the total deductions of installment payments of estimated tax for a calendar 25 year exceed the actual tax for that calendar year, the producer shall, before April 1 of 26 the following year, refund the excess to the royalty owner. Unless otherwise agreed 27 between the producer and the royalty owner, the amount of the tax paid under 28 AS 43.55.011(e) on taxable royalty oil and gas for a calendar year, other than oil and 29 gas the ownership or right to which constitutes a landowner's royalty interest, is 30 considered to be the gross value at the point of production of the taxable royalty oil 31 and gas produced during the calendar year multiplied by a figure that is a quotient, in
01 which 02 (1) the numerator is the producer's total tax liability under 03 AS 43.55.011(e) for the calendar year of production; and 04 (2) the denominator is the total gross value at the point of production 05 of the oil and gas taxable under AS 43.55.011(e) produced by the producer from all 06 leases and properties in the state during the calendar year. 07 * Sec. 14. AS 43.55.023(a) is amended to read: 08 (a) A producer or explorer may take a tax credit for a qualified capital 09 expenditure as follows: 10 (1) notwithstanding that a qualified capital expenditure may be a 11 deductible lease expenditure for purposes of calculating the production tax value of oil 12 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under 13 AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or 14 explorer that incurs a qualified capital expenditure may also elect to apply a tax credit 15 against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that 16 expenditure; [HOWEVER, NOT MORE THAN HALF OF THE TAX CREDIT MAY 17 BE APPLIED FOR A SINGLE CALENDAR YEAR;] 18 (2) a producer or explorer may take a credit for a qualified capital 19 expenditure incurred in connection with geological or geophysical exploration or in 20 connection with an exploration well only if the producer or explorer 21 (A) agrees, in writing, to the applicable provisions of 22 AS 43.55.025(f)(2); and 23 (B) submits to the Department of Natural Resources all data 24 that would be required to be submitted under AS 43.55.025(f)(2); 25 (3) a credit for a qualified capital expenditure incurred to explore 26 for, develop, or produce oil or gas deposits located north of 68 degrees North 27 latitude may be taken only if the expenditure is incurred before January 1, 2014. 28 * Sec. 15. AS 43.55.023(b) is amended to read: 29 (b) Before January 1, 2014, a [A] producer or explorer may elect to take a 30 tax credit in the amount of 25 percent of a carried-forward annual loss. For lease 31 expenditures incurred on and after January 1, 2014, and before January 1, 2016,
01 to explore for, develop, or produce oil or gas deposits located north of 68 degrees 02 North latitude, a producer or explorer may elect to take a tax credit in the 03 amount of 45 percent of a carried-forward annual loss. For lease expenditures 04 incurred on and after January 1, 2016, to explore for, develop, or produce oil or 05 gas deposits located north of 68 degrees North latitude, a producer or explorer 06 may elect to take a tax credit in the amount of 35 percent of a carried-forward 07 annual loss. For lease expenditures incurred on or after January 1, 2014, to 08 explore for, develop, or produce oil or gas deposits located south of 68 degrees 09 North latitude, a producer or explorer may elect to take a tax credit in the 10 amount of 25 percent of a carried-forward annual loss. A credit under this 11 subsection may be applied against a tax levied by AS 43.55.011(e). For purposes of 12 this subsection, a carried-forward annual loss is the amount of a producer's or 13 explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a 14 previous calendar year that was not deductible in calculating production tax values for 15 that calendar year under AS 43.55.160. 16 * Sec. 16. AS 43.55.023(d) is amended to read: 17 (d) A [EXCEPT AS LIMITED BY (i) OF THIS SECTION, A] person that is 18 entitled to take a tax credit under this section that wishes to transfer the unused credit 19 to another person or obtain a cash payment under AS 43.55.028 may apply to the 20 department for a transferable tax credit certificate [CERTIFICATES]. An application 21 under this subsection must be in a form prescribed by the department and must include 22 supporting information and documentation that the department reasonably requires. 23 The department shall grant or deny an application, or grant an application as to a lesser 24 amount than that claimed and deny it as to the excess, not later than 120 days after the 25 latest of (1) March 31 of the year following the calendar year in which the qualified 26 capital expenditure or carried-forward annual loss for which the credit is claimed was 27 incurred; (2) the date the statement required under AS 43.55.030(a) or (e) was filed for 28 the calendar year in which the qualified capital expenditure or carried-forward annual 29 loss for which the credit is claimed was incurred; or (3) the date the application was 30 received by the department. If, based on the information then available to it, the 31 department is reasonably satisfied that the applicant is entitled to a credit, the
01 department shall issue the applicant a [TWO] transferable tax credit certificate for 02 [CERTIFICATES, EACH FOR HALF OF] the amount of the credit. [THE CREDIT 03 SHOWN ON ONE OF THE TWO CERTIFICATES IS AVAILABLE FOR 04 IMMEDIATE USE. THE CREDIT SHOWN ON THE SECOND OF THE TWO 05 CERTIFICATES MAY NOT BE APPLIED AGAINST A TAX FOR A CALENDAR 06 YEAR EARLIER THAN THE CALENDAR YEAR FOLLOWING THE 07 CALENDAR YEAR IN WHICH THE CERTIFICATE IS ISSUED, AND THE 08 CERTIFICATE MUST CONTAIN A CONSPICUOUS STATEMENT TO THAT 09 EFFECT.] A certificate issued under this subsection does not expire. 10 * Sec. 17. AS 43.55.023(g) is amended to read: 11 (g) The issuance of a transferable tax credit certificate under (d) of this 12 section or former (m) of this section or the purchase of a certificate under 13 AS 43.55.028 does not limit the department's ability to later audit a tax credit claim to 14 which the certificate relates or to adjust the claim if the department determines, as a 15 result of the audit, that the applicant was not entitled to the amount of the credit for 16 which the certificate was issued. The tax liability of the applicant under 17 AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased by the amount of the credit 18 that exceeds that to which the applicant was entitled, or the applicant's available valid 19 outstanding credits applicable against the tax levied by AS 43.55.011(e) are reduced 20 by that amount. If the applicant's tax liability is increased under this subsection, the 21 increase bears interest under AS 43.05.225 from the date the transferable tax credit 22 certificate was issued. For purposes of this subsection, an applicant that is an explorer 23 is considered a producer subject to the tax levied by AS 43.55.011(e). 24 * Sec. 18. AS 43.55.023(n) is amended to read: 25 (n) For the purposes of (l) [AND (m)] of this section, a well lease expenditure 26 incurred in the state south of 68 degrees North latitude is a lease expenditure that is 27 (1) directly related to an exploration well, a stratigraphic test well, a 28 producing well, or an injection well other than a disposal well, located in the state 29 south of 68 degrees North latitude, if the expenditure is a qualified capital expenditure 30 and an intangible drilling and development cost authorized under 26 U.S.C. (Internal 31 Revenue Code), as amended, and 26 C.F.R. 1.612-4, regardless of the elections made
01 under 26 U.S.C. 263(c); in this paragraph, an expenditure directly related to a well 02 includes an expenditure for well sidetracking, well deepening, well completion or 03 recompletion, or well workover, regardless of whether the well is or has been a 04 producing well; or 05 (2) an expense for seismic work conducted within the boundaries of a 06 production or exploration unit. 07 * Sec. 19. AS 43.55.023 is amended by adding a new subsection to read: 08 (p) Before January 1, 2014, the provisions of (d) of this section may be limited 09 by (i) of this section. 10 * Sec. 20. AS 43.55.024(e) is amended to read: 11 (e) On written application by a producer that includes any information the 12 department may require, the department shall determine whether the producer 13 qualifies for a calendar year under (a) and (c) of this section. To qualify under (a) and 14 (c) of this section, a producer must demonstrate that its operation in the state or its 15 ownership of an interest in a lease or property in the state as a distinct producer would 16 not result in the division among multiple producer entities of any production tax 17 liability under AS 43.55.011(e) that reasonably would be expected to be attributed to a 18 single producer if the tax credit provisions of (a) or (c) of this section did not exist. 19 * Sec. 21. AS 43.55.024 is amended by adding new subsections to read: 20 (i) A producer may apply against the producer's tax liability for the calendar 21 year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under 22 AS 43.55.011(e) that meets one or more of the criteria in AS 43.55.160(f) or (g) and 23 that is produced during a calendar year after December 31, 2013. A tax credit 24 authorized by this subsection may not reduce a producer's tax liability for a calendar 25 year under AS 43.55.011(e) below zero. 26 (j) A producer may apply against the producer's tax liability for the calendar 27 year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for 28 each barrel of oil taxable under AS 43.55.011(e) that does not meet any of the criteria 29 in AS 43.55.160(f) or (g) and that is produced during a calendar year after 30 December 31, 2013, from leases or properties north of 68 degrees North latitude. A tax 31 credit under this subsection may not reduce a producer's tax liability for a calendar
01 year under AS 43.55.011(e) below the amount calculated under AS 43.55.011(f). The 02 amount of the tax credit for a barrel of taxable oil subject to this subsection produced 03 during a month of the calendar year is 04 (1) $8 for each barrel of taxable oil if the average gross value at the 05 point of production for the month is less than $80 a barrel; 06 (2) $7 for each barrel of taxable oil if the average gross value at the 07 point of production for the month is greater than or equal to $80 a barrel, but less than 08 $90 a barrel; 09 (3) $6 for each barrel of taxable oil if the average gross value at the 10 point of production for the month is greater than or equal to $90 a barrel, but less than 11 $100 a barrel; 12 (4) $5 for each barrel of taxable oil if the average gross value at the 13 point of production for the month is greater than or equal to $100 a barrel, but less 14 than $110 a barrel; 15 (5) $4 for each barrel of taxable oil if the average gross value at the 16 point of production for the month is greater than or equal to $110 a barrel, but less 17 than $120 a barrel; 18 (6) $3 for each barrel of taxable oil if the average gross value at the 19 point of production for the month is greater than or equal to $120 a barrel, but less 20 than $130 a barrel; 21 (7) $2 for each barrel of taxable oil if the average gross value at the 22 point of production for the month is greater than or equal to $130 a barrel, but less 23 than $140 a barrel; 24 (8) $1 for each barrel of taxable oil if the average gross value at the 25 point of production for the month is greater than or equal to $140 a barrel, but less 26 than $150 a barrel; 27 (9) zero if the average gross value at the point of production for the 28 month is greater than or equal to $150 a barrel. 29 * Sec. 22. AS 43.55.025(a) is amended to read: 30 (a) Subject to the terms and conditions of this section, a credit against the 31 production tax levied by AS 43.55.011(e) is allowed for exploration expenditures that
01 qualify under (b) of this section in an amount equal to one of the following: 02 (1) 30 percent of the total exploration expenditures that qualify only 03 under (b) and (c) of this section; 04 (2) 30 percent of the total exploration expenditures that qualify only 05 under (b) and (d) of this section; 06 (3) 40 percent of the total exploration expenditures that qualify under 07 (b), (c), and (d) of this section; 08 (4) 40 percent of the total exploration expenditures that qualify only 09 under (b) and (e) of this section; 10 (5) 80, 90, or 100 percent, or a lesser amount described in (l) of this 11 section, of the total exploration expenditures described in (b)(1) and (2) of this section 12 and not excluded by (b)(3) and (4) of this section that qualify only under (l) of this 13 section; 14 (6) the lesser of $25,000,000 or 80 percent of the total exploration 15 drilling expenditures described in (m) of this section and that qualify under (b) and 16 (c)(1), (c)(2)(A), and (c)(2)(C) [(c)] of this section; or 17 (7) the lesser of $7,500,000 or 75 percent of the total seismic 18 exploration expenditures described in (n) of this section and that qualify under (b) of 19 this section. 20 * Sec. 23. AS 43.55.025(b) is amended to read: 21 (b) To qualify for the production tax credit under (a) of this section, an 22 exploration expenditure must be incurred for work performed after June 30, 2008, and 23 before July 1, 2016, except that to qualify for the production tax credit under 24 (a)(1), (2), (3), or (4) of this section for exploration conducted outside of the Cook 25 Inlet sedimentary basin and south of 68 degrees North latitude, an exploration 26 expenditure must be incurred for work performed after June 30, 2008, and 27 before January 1, 2022, and 28 (1) may be for seismic or other geophysical exploration costs not 29 connected with a specific well; 30 (2) if for an exploration well, 31 (A) must be incurred by an explorer that holds an interest in the
01 exploration well for which the production tax credit is claimed; 02 (B) may be for either a well that encounters an oil or gas 03 deposit or a dry hole; 04 (C) must be for a well that has been completed, suspended, or 05 abandoned at the time the explorer claims the tax credit under (f) of this 06 section; and 07 (D) must be for goods, services, or rentals of personal property 08 reasonably required for the surface preparation, drilling, casing, cementing, 09 and logging of an exploration well, and, in the case of a dry hole, for the 10 expenses required for abandonment if the well is abandoned within 18 months 11 after the date the well was spudded; 12 (3) may not be for administration, supervision, engineering, or lease 13 operating costs; geological or management costs; community relations or 14 environmental costs; bonuses, taxes, or other payments to governments related to the 15 well; costs, including repairs and replacements, arising from or associated with fraud, 16 wilful misconduct, gross negligence, criminal negligence, or violation of law, 17 including a violation of 33 U.S.C. 1319(c)(1) or 1321(b)(3) (Clean Water Act); or 18 other costs that are generally recognized as indirect costs or financing costs; and 19 (4) may not be incurred for an exploration well or seismic exploration 20 that is included in a plan of exploration or a plan of development for any unit before 21 May 14, 2003. 22 * Sec. 24. AS 43.55.025(m) is amended to read: 23 (m) The persons that drill the first four exploration wells in the state and 24 within the areas described in (o) of this section on state lands, private lands, or federal 25 onshore lands for the purpose of discovering oil or gas that penetrate and evaluate a 26 prospect in a basin described in (o) of this section are eligible for a credit under (a)(6) 27 of this section. A credit under this subsection may not be taken for more than two 28 exploration wells in a single area described in (o)(1) - (6) of this section. Exploration 29 expenditures eligible for the credit in this subsection must be incurred for work 30 performed after June 1, 2012, and before July 1, 2016. A person planning to drill an 31 exploration well on private land and to apply for a credit under this subsection shall
01 obtain written consent from the owner of the oil and gas interest for the full public 02 release of all well data after the expiration of the confidentiality period applicable to 03 information collected under (f) of this section. The written consent of the owner of the 04 oil and gas interest must be submitted to the commissioner of natural resources before 05 approval of the proposed exploration well. In addition to the requirements in (c)(1), 06 (c)(2)(A), and (c)(2)(C) [(c)] of this section and submission of the written consent of 07 the owner of the oil and gas interest, a person planning to drill an exploration well 08 shall obtain approval from the commissioner of natural resources before the well is 09 spudded. The commissioner of natural resources shall make a written determination 10 approving or rejecting an exploration well within 60 days after receiving the request 11 for approval or as soon as is practicable thereafter. Before approving the exploration 12 well, the commissioner of natural resources shall consider the following: the location 13 of the well; the proximity to a community in need of a local energy source; the 14 proximity of existing infrastructure; the experience and safety record of the explorer in 15 conducting operations in remote or roadless areas; the projected cost schedule; 16 whether seismic mapping and seismic data sufficiently identify a particular trap for 17 exploration; whether the targeted and planned depth and range are designed to 18 penetrate and fully evaluate the hydrocarbon potential of the proposed prospect and 19 reach the level below which economic hydrocarbon reservoirs are likely to be found, 20 or reach 12,000 feet or more true vertical depth; and whether the exploration plan 21 provides for a full evaluation of the wellbore below surface casing to the depth of the 22 well. Whether the exploration well for which a credit is requested under this 23 subsection is located within an area and a basin described under (o) of this section 24 shall be determined by the commissioner of natural resources and reported to the 25 commissioner. A taxpayer that obtains a credit under this subsection may not claim a 26 tax credit under AS 43.55.023 or another provision in this section for the same 27 exploration expenditure. 28 * Sec. 25. AS 43.55.028(e) is amended to read: 29 (e) The department, on the written application of a person to whom a 30 transferable tax credit certificate has been issued under AS 43.55.023(d) or former 31 AS 43.55.023(m) [(m)] or to whom a production tax credit certificate has been issued
01 under AS 43.55.025(f), may use available money in the oil and gas tax credit fund to 02 purchase, in whole or in part, the certificate if the department finds that 03 (1) the calendar year of the purchase is not earlier than the first 04 calendar year for which the credit shown on the certificate would otherwise be allowed 05 to be applied against a tax; 06 (2) the applicant does not have an outstanding liability to the state for 07 unpaid delinquent taxes under this title; 08 (3) the applicant's total tax liability under AS 43.55.011(e), after 09 application of all available tax credits, for the calendar year in which the application is 10 made is zero; 11 (4) the applicant's average daily production of oil and gas taxable 12 under AS 43.55.011(e) during the calendar year preceding the calendar year in which 13 the application is made was not more than 50,000 BTU equivalent barrels; and 14 (5) the purchase is consistent with this section and regulations adopted 15 under this section. 16 * Sec. 26. AS 43.55.028(g) is amended to read: 17 (g) The department may adopt regulations to carry out the purposes of this 18 section, including standards and procedures to allocate available money among 19 applications for purchases under this chapter and claims for refunds and payments 20 under AS 43.20.046 or 43.20.047 when the total amount of the applications for 21 purchase and claims for refund exceed the amount of available money in the fund. The 22 regulations adopted by the department may not, when allocating available money in 23 the fund under this section, distinguish an application for the purchase of a credit 24 certificate issued under former AS 43.55.023(m) or a claim for a refund or payment 25 under AS 43.20.046 or 43.20.047. 26 * Sec. 27. AS 43.55.030(e) is amended to read: 27 (e) An explorer or producer that incurs a lease expenditure under 28 AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar 29 year but does not produce oil or gas from a lease or property in the state during the 30 calendar year 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, the following: 02 (1) the explorer's or producer's qualified capital expenditures, as 03 defined in AS 43.55.023, other lease expenditures under AS 43.55.165, and 04 adjustments or other payments or credits under AS 43.55.170; and 05 (2) if the explorer or producer receives a payment or credit under 06 AS 43.55.170, calculations showing whether the explorer or producer is liable for a 07 tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount. 08 * Sec. 28. AS 43.55.160(a) is amended to read: 09 (a) Except as provided in (b), (f), and (g) of this section, for the purposes of 10 (1) AS 43.55.011(e), the annual production tax value of [THE] taxable 11 oil, gas, or oil and gas [SUBJECT TO THIS PARAGRAPH] produced during a 12 calendar year in a category for which a separate annual production tax value is 13 required to be calculated under this paragraph is the gross value at the point of 14 production of that [THE] oil, gas, or oil and gas taxable under AS 43.55.011(e), less 15 the producer's lease expenditures under AS 43.55.165 for the calendar year applicable 16 to the oil, gas, or oil and gas in that category [, AS APPLICABLE,] produced by the 17 producer during the calendar year [FROM LEASES OR PROPERTIES], as adjusted 18 under AS 43.55.170; a separate annual production tax value must be calculated 19 for [THIS PARAGRAPH APPLIES TO] 20 (A) oil and gas produced from leases or properties in the state 21 that include land north of 68 degrees North latitude, other than gas produced 22 before 2022 and used in the state; 23 (B) oil and gas produced from leases or properties in the state 24 outside the Cook Inlet sedimentary basin, no part of which is north of 68 25 degrees North latitude and that qualifies for a tax credit under 26 AS 43.55.024(a) and (b); this subparagraph does not apply to [GAS] 27 (i) gas produced before 2022 and used in the state; or 28 (ii) oil and gas subject to AS 43.55.011(p); 29 (C) oil produced before 2022 from each [A] lease or property 30 in the Cook Inlet sedimentary basin; 31 (D) gas produced before 2022 from each [A] lease or property
01 in the Cook Inlet sedimentary basin; 02 (E) gas produced before 2022 from each [A] lease or property 03 in the state outside the Cook Inlet sedimentary basin and used in the state, 04 other than gas subject to AS 43.55.011(p); 05 (F) oil and gas subject to AS 43.55.011(p) produced from 06 leases or properties in the state; 07 (G) oil and gas produced from leases or properties in the 08 state [A LEASE OR PROPERTY] no part of which is north of 68 degrees 09 North latitude, other than oil or gas described in (B), (C), (D), (E), or (F) of 10 this paragraph; 11 (2) AS 43.55.011(g), for oil and gas produced before January 1, 12 2014, the monthly production tax value of the taxable 13 (A) oil and gas produced during a month from leases or 14 properties in the state that include land north of 68 degrees North latitude is the 15 gross value at the point of production of the oil and gas taxable under 16 AS 43.55.011(e) and produced by the producer from those leases or properties, 17 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 18 calendar year applicable to the oil and gas produced by the producer from 19 those leases or properties, as adjusted under AS 43.55.170; this subparagraph 20 does not apply to gas subject to AS 43.55.011(o); 21 (B) oil and gas produced during a month from leases or 22 properties in the state outside the Cook Inlet sedimentary basin, no part of 23 which is north of 68 degrees North latitude, is the gross value at the point of 24 production of the oil and gas taxable under AS 43.55.011(e) and produced by 25 the producer from those leases or properties, less 1/12 of the producer's lease 26 expenditures under AS 43.55.165 for the calendar year applicable to the oil and 27 gas produced by the producer from those leases or properties, as adjusted under 28 AS 43.55.170; this subparagraph does not apply to gas subject to 29 AS 43.55.011(o); 30 (C) oil produced during a month from a lease or property in the 31 Cook Inlet sedimentary basin is the gross value at the point of production of
01 the oil taxable under AS 43.55.011(e) and produced by the producer from that 02 lease or property, less 1/12 of the producer's lease expenditures under 03 AS 43.55.165 for the calendar year applicable to the oil produced by the 04 producer from that lease or property, as adjusted under AS 43.55.170; 05 (D) gas produced during a month from a lease or property in 06 the Cook Inlet sedimentary basin is the gross value at the point of production 07 of the gas taxable under AS 43.55.011(e) and produced by the producer from 08 that lease or property, less 1/12 of the producer's lease expenditures under 09 AS 43.55.165 for the calendar year applicable to the gas produced by the 10 producer from that lease or property, as adjusted under AS 43.55.170; 11 (E) gas produced during a month from a lease or property 12 outside the Cook Inlet sedimentary basin and used in the state is the gross 13 value at the point of production of that gas taxable under AS 43.55.011(e) and 14 produced by the producer from that lease or property, less 1/12 of the 15 producer's lease expenditures under AS 43.55.165 for the calendar year 16 applicable to that gas produced by the producer from that lease or property, as 17 adjusted under AS 43.55.170. 18 * Sec. 29. AS 43.55.160 is amended by adding new subsections to read: 19 (f) On and after January 1, 2014, in the calculation of an annual production tax 20 value of a producer under (a)(1) of this section, the gross value at the point of 21 production of oil or gas produced from a lease or property north of 68 degrees North 22 latitude meeting one or more of the following criteria is reduced by 20 percent: (1) the 23 oil or gas is produced from a lease or property that does not contain a lease that was 24 within a unit on January 1, 2003; (2) the oil or gas is produced from a participating 25 area established after December 31, 2011, that is within a unit formed under 26 AS 38.05.180(p) before January 1, 2003, if the participating area does not contain a 27 reservoir that had previously been in a participating area established before 28 December 31, 2011; (3) the oil or gas is produced from acreage that was added to an 29 existing participating area by the Department of Natural Resources on and after 30 January 1, 2014, and the producer demonstrates to the department that the volume of 31 oil or gas produced is from acreage added to an existing participating area. This
01 subsection does not apply to gas produced before 2022 that is used in the state. A 02 reduction under this subsection may not reduce the gross value at the point of 03 production below zero. In this subsection, "participating area" means a reservoir or 04 portion of a reservoir producing or contributing to production as approved by the 05 Department of Natural Resources. 06 (g) On and after January 1, 2014, in addition to the reduction under (f) of this 07 section, in the calculation of an annual production tax value of a producer under (a)(1) 08 of this section, the gross value at the point of production of oil or gas produced from a 09 lease or property that does not contain a lease that was within a unit on January 1, 10 2003, is reduced by 10 percent if the oil or gas is produced from a unit made up solely 11 of leases that have a royalty share of more than 12.5 percent in amount or value of the 12 production removed or sold from the lease as determined under AS 38.05.180(f). This 13 subsection does not apply if the royalty obligation for one or more of the leases in the 14 unit has been reduced to 12.5 percent or less under AS 38.05.180(j) for all or part of 15 the calendar year for which the annual production tax is calculated. This subsection 16 does not apply to gas produced before 2022 that is used in the state. A reduction under 17 this subsection may not reduce the gross value at the point of production below zero. 18 * Sec. 30. AS 43.56.160 is amended to read: 19 Sec. 43.56.160. Interest and penalty. When the tax levied by AS 43.56.010(a) 20 becomes delinquent, a penalty of 10 percent shall be added. Before January 1, 2014, 21 interest [INTEREST] on the delinquent taxes, exclusive of penalty, shall be assessed 22 at a rate of eight percent a year. On and after January 1, 2014, interest on the 23 delinquent taxes, exclusive of penalty, shall be assessed at the rate specified in 24 AS 43.05.225. 25 * Sec. 31. AS 43.98 is amended by adding new sections to read: 26 Article 2. Oil and Gas Competitiveness Review Board. 27 Sec. 43.98.040. Oil and Gas Competitiveness Review Board. (a) The Oil and 28 Gas Competitiveness Review Board is established in the department. 29 (b) The board shall consist of 11 members as follows: 30 (1) two members nominated by the two leading nonprofit trade 31 associations representing the oil and gas industry in the state and appointed by the
01 governor, with one member nominated by each association; 02 (2) the chair of the Alaska Oil and Gas Conservation Commission or 03 the chair's designee; 04 (3) three members of the public appointed by the governor, including 05 one member who is a petroleum engineer, one member who is a geologist, and one 06 member who is a financial analyst; 07 (4) the commissioner of environmental conservation or the 08 commissioner's designee; 09 (5) the commissioner of natural resources or the commissioner's 10 designee; 11 (6) the commissioner of revenue or the commissioner's designee; 12 (7) two members of the public who do not represent the oil and gas 13 industry, appointed by the governor. 14 (c) The governor shall, every two years, designate one of the members as 15 chair. 16 (d) Members of the board appointed under (b)(1), (3), and (7) of this section 17 serve for four years. An individual who has served on the board may be reappointed. 18 (e) A vacancy on the board shall be filled in the manner of the original 19 appointment. 20 (f) A member of the board may be removed and replaced at the discretion of 21 the governor. 22 (g) The members of the board appointed under (b)(1), (3), and (7) of this 23 section serve without compensation but shall receive per diem and travel expenses 24 authorized for boards and commissions under AS 39.20.180. 25 (h) The board may enter into contracts for professional services. The 26 department shall provide staff for administrative support for the board. 27 (i) The board shall meet at least once in a calendar year. 28 Sec. 43.98.050. Duties. The duties of the board include the following: 29 (1) establish and maintain a salient collection of information related to 30 oil and gas exploration, development, and production in the state and related to tax 31 structures, rates, and credits in other regions with oil and gas resources;
01 (2) review historical, current, and potential levels of investment in the 02 state's oil and gas sector; 03 (3) identify factors that affect investment in oil and gas exploration, 04 development, and production in the state, including tax structure, rates, and credits; 05 royalty requirements; infrastructure; workforce availability; and regulatory 06 requirements; 07 (4) review the competitive position of the state to attract and maintain 08 investment in the oil and gas sector in the state as compared to the competitive 09 position of other regions with oil and gas resources; 10 (5) in order to facilitate the work of the board, establish procedures to 11 accept and keep confidential information that is beneficial to the work of the board, 12 including the creation of a secure data room and confidentiality agreements to be 13 signed by individuals having access to confidential information; 14 (6) make written findings and recommendations to the Alaska State 15 Legislature before 16 (A) January 31, 2015, or as soon thereafter as practicable, 17 regarding 18 (i) changes to the state's regulatory environment and 19 permitting structure that would be conducive to encouraging increased 20 investment while protecting the interests of the people of the state and 21 the environment; 22 (ii) the status of the oil and gas industry labor pool in 23 the state and the effectiveness of workforce development efforts by the 24 state; 25 (iii) the status of the oil-and-gas-related infrastructure 26 of the state, including a description of infrastructure deficiencies; and 27 (iv) the competitiveness of the state's fiscal oil and gas 28 tax regime when compared to other regions of the world; 29 (B) January 31, 2021, or as soon thereafter as practicable, 30 regarding 31 (i) changes to the state's fiscal regime that would be
01 conducive to increased and ongoing long-term investment in and 02 development of the state's oil and gas resources; 03 (ii) alternative means for increasing the state's ability to 04 attract and maintain investment in and development of the state's oil 05 and gas resources; and 06 (iii) a review of the current effectiveness and future 07 value of any provisions of the state's oil and gas tax laws that are 08 expiring in the next five years. 09 Sec. 43.98.060. Information to be provided to board. (a) The commissioner 10 of natural resources, the commissioner of revenue, the commissioner of environmental 11 conservation, and other commissioners and state agencies that have responsibility for 12 and maintain information related to oil and gas investment and activity in the state 13 shall, at the request of the board, provide information required by the board to carry 14 out the duties described in AS 43.98.050. 15 (b) At the request of the board, and except for information that is confidential 16 under AS 40.25.100(a) or AS 43.05.230 and information required to be held 17 confidential by the Alaska Oil and Gas Conservation Commission, a commissioner 18 may disclose to the board information that is otherwise confidential after each member 19 of the board and each staff member for the board with access to the information signs 20 a confidentiality agreement prepared by the commissioner making the disclosure. 21 Information that is confidential under AS 43.05.230 may not be disclosed to the board. 22 Sec. 43.98.070. Definition. In AS 43.98.040 - 43.98.070, "board" means the 23 Oil and Gas Competitiveness Review Board. 24 * Sec. 32. AS 43.55.023(m) is repealed. 25 * Sec. 33. AS 43.55.020(d), 43.55.023(i), and 43.55.023(p) are repealed January 1, 2014. 26 * Sec. 34. AS 43.98.040, 43.98.050, 43.98.060, and 43.98.070 are repealed February 28, 27 2021. 28 * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 APPLICABILITY. (a) Section 7 of this Act and AS 43.55.160(a)(1)(E), as amended 31 by sec. 28 of this Act, apply to oil and gas produced after December 31, 2012.
01 (b) AS 43.55.023(a)(1), as amended by sec. 14 of this Act, and secs. 16 - 19 of this 02 Act apply to expenditures incurred on and after January 1, 2013. 03 * Sec. 36. The uncodified law of the State of Alaska is amending by adding a new section to 04 read: 05 TRANSITION: REGULATIONS. The Department of Revenue may adopt regulations 06 to implement this Act. The regulations take effect under AS 44.62 (Administrative Procedure 07 Act), but not before the effective date of the respective provision of this Act. 08 * Sec. 37. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 TRANSITION: OIL AND GAS COMPETITIVENESS REVIEW BOARD. The 11 governor shall appoint the initial members of the Oil and Gas Competitiveness Review Board, 12 established in sec. 31 of this Act, before January 1, 2014. The initial terms of the members of 13 the board appointed under AS 43.98.040(b)(1), (3), and (7) shall be four years. 14 * Sec. 38. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 RETROACTIVITY. Sections 7, 16 - 19, 25, and 32 of this Act, AS 43.55.023(a)(1), as 17 amended by sec. 14 of this Act, and AS 43.55.160(a)(1)(E), as amended by sec. 28 of this 18 Act, are retroactive to January 1, 2013.