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SB 138: "An Act relating to the purposes of the Alaska Gasline Development Corporation to advance to develop a large-diameter natural gas pipeline project, including treatment and liquefaction facilities; establishing the large-diameter natural gas pipeline project fund; creating a subsidiary related to a large-diameter natural gas pipeline project, including treatment and liquefaction facilities; relating to the authority of the commissioner of natural resources to negotiate contracts related to North Slope natural gas projects, to enter into confidentiality agreements in support of contract negotiations and implementation, and to take custody of gas delivered to the state under an election to pay the oil and gas production tax in kind; relating to the sale, exchange, or disposal of gas delivered to the state under an election to pay the oil and gas production tax in kind; relating to the duties of the commissioner of revenue to direct the disposition of revenues received from gas delivered to the state in kind and to consult with the commissioner of natural resources on the custody and disposition of gas delivered to the state in kind; relating to the authority of the commissioner of natural resources to propose modifications to existing state oil and gas leases; making certain information provided to the Department of Natural Resources and the Department of Revenue exempt from inspection as a public record; making certain tax information related to an election to pay the oil and gas production tax in kind exempt from tax confidentiality provisions; relating to establishing under the oil and gas production tax a gross tax rate for gas after 2021; making the alternate minimum tax on oil and gas produced north of 68 degrees North latitude after 2021 apply only to oil; relating to apportionment factors of the Alaska Net Income Tax Act; authorizing a producer's election to pay the oil and gas production tax in kind for certain gas and relating to the authorization; relating to monthly installment payments of the oil and gas production tax; relating to interest payments on monthly installment payments of the oil and gas production tax; relating to settlements between producers and royalty owners for oil and gas production tax; relating to annual statements by producers and explorers; relating to annual production tax values; relating to lease expenditures; amending the definition of gross value at the 'point of production' for gas for purposes of the oil and gas production tax; adding definitions related to natural gas terms; clarifying that credit may not be taken against the in-kind levy of the oil and gas production tax for gas for purposes of the exploration incentive credit, the oil or gas producer education credit, and the film production tax credit; making conforming amendments; and providing for an effective date."

00                             SENATE BILL NO. 138                                                                         
01 "An Act relating to the purposes of the Alaska Gasline Development Corporation to                                       
02 advance to develop a large-diameter natural gas pipeline project, including treatment                                   
03 and liquefaction facilities; establishing the large-diameter natural gas pipeline project                               
04 fund; creating a subsidiary related to a large-diameter natural gas pipeline project,                                   
05 including treatment and liquefaction facilities; relating to the authority of the                                       
06 commissioner of natural resources to negotiate contracts related to North Slope natural                                 
07 gas projects, to enter into confidentiality agreements in support of contract negotiations                              
08 and implementation, and to take custody of gas delivered to the state under an election                                 
09 to pay the oil and gas production tax in kind; relating to the sale, exchange, or disposal                              
10 of gas delivered to the state under an election to pay the oil and gas production tax in                                
11 kind; relating to the duties of the commissioner of revenue to direct the disposition of                                
12 revenues received from gas delivered to the state in kind and to consult with the                                       
01 commissioner of natural resources on the custody and disposition of gas delivered to the                                
02 state in kind; relating to the authority of the commissioner of natural resources to                                    
03 propose modifications to existing state oil and gas leases; making certain information                                  
04 provided to the Department of Natural Resources and the Department of Revenue                                           
05 exempt from inspection as a public record; making certain tax information related to an                                 
06 election to pay the oil and gas production tax in kind exempt from tax confidentiality                                  
07 provisions; relating to establishing under the oil and gas production tax a gross tax rate                              
08 for gas after 2021; making the alternate minimum tax on oil and gas produced north of                                   
09 68 degrees North latitude after 2021 apply only to oil; relating to apportionment factors                               
10 of the Alaska Net Income Tax Act; authorizing a producer's election to pay the oil and                                  
11 gas production tax in kind for certain gas and relating to the authorization; relating to                               
12 monthly installment payments of the oil and gas production tax; relating to interest                                    
13 payments on monthly installment payments of the oil and gas production tax; relating to                                 
14 settlements between producers and royalty owners for oil and gas production tax;                                        
15 relating to annual statements by producers and explorers; relating to annual production                                 
16 tax values; relating to lease expenditures; amending the definition of gross value at the                               
17 'point of production' for gas for purposes of the oil and gas production tax; adding                                    
18 definitions related to natural gas terms; clarifying that credit may not be taken against                               
19 the in-kind levy of the oil and gas production tax for gas for purposes of the exploration                              
20 incentive credit, the oil or gas producer education credit, and the film production tax                                 
21 credit; making conforming amendments; and providing for an effective date."                                             
22 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
23    * Section 1.  AS 31.25.005 is amended to read:                                                                     
24            Sec. 31.25.005. Purpose. The corporation shall, for the benefit of the state, to                           
01       the fullest extent possible,                                                                                    
02                 (1)  advance an in-state natural gas pipeline as described in the July 1,                               
03       2011, project plan prepared under former AS 38.34.040 by the corporation while a                                  
04       subsidiary of the Alaska Housing Finance Corporation, with modifications determined                               
05       by the corporation to be appropriate to develop, finance, construct, and operate an in-                           
06       state natural gas pipeline in a safe, prudent, economical, and efficient manner, for the                          
07       purpose of making natural gas, including propane and other hydrocarbons associated                                
08       with natural gas other than oil, available to Fairbanks, the Southcentral region of the                           
09       state, and other communities in the state at the lowest rates possible;                                           
10                 (2)  endeavor to develop natural gas pipelines and other transportation                                 
11       mechanisms to deliver natural gas, including propane and other hydrocarbons                                       
12       associated with natural gas other than oil, to public utility and industrial customers in                         
13       areas of the state to which the natural gas, including propane and other hydrocarbons                             
14       associated with natural gas other than oil, may be delivered at commercially                                      
15       reasonable rates; and                                                                                             
16                 (3)  endeavor to develop natural gas pipelines and other transportation                                 
17       mechanisms that offer commercially reasonable rates for shippers and access for                                   
18       shippers who produce natural gas, including propane and other hydrocarbons                                        
19       associated with natural gas other than oil, in the state;                                                     
20                 (4)  advance to develop a large-diameter natural gas pipeline                                     
21       project other than the in-state natural gas pipeline described in (1) of this section                         
22       by acquiring an equity interest in a large-diameter natural gas pipeline project                              
23       through the subsidiary under AS 31.25.122;                                                                    
24                 (5)  advance to develop, finance, construct, and operate facilities                                 
25       for liquefaction and treatment in connection with a large-diameter natural gas                                
26       pipeline project other than the in-state natural gas pipeline described in (1) of                             
27       this section through the subsidiary under AS 31.25.122.                                                     
28    * Sec. 2. AS 31.25.010 is amended to read:                                                                         
29            Sec. 31.25.010. Structure. The Alaska Gasline Development Corporation is a                                 
30       public corporation and government instrumentality located for administrative purposes                             
31       in the Department of Commerce, Community, and Economic Development, but                                           
01       having a legal existence independent of and separate from the state. The corporation                              
02       may not be terminated as long as it has bonds, notes, or other obligations outstanding.                           
03       The corporation may dissolve when no bonds, notes, or other obligations of the                                    
04       corporation or a subsidiary of the corporation are outstanding and the corporation or a                           
05       subsidiary of the corporation is no longer engaged in the development, financing,                                 
06       construction, or operation of an in-state natural gas pipeline or a large-diameter                            
07       natural gas pipeline project. Upon termination of the corporation, its rights and                             
08       property pass to the state.                                                                                     
09    * Sec. 3. AS 31.25.080(f) is amended to read:                                                                      
10            (f)  The corporation shall, to the maximum extent practicable without delaying                               
11       the progress of developing the [AN] in-state natural gas pipeline project described in                    
12       AS 31.25.005(1) and without causing the in-state natural gas pipeline project                                 
13       described in AS 31.25.005(1) to become a competing natural gas pipeline project for                           
14       purposes of AS 43.90.440, coordinate with and accommodate the developers of a                                     
15       large-diameter [IN-STATE] natural gas pipeline project by planning for the                                    
16       development and use of [COMMON] pipeline facilities from the North Slope to [THE                                  
17       LIVENGOOD AREA OR TO ANOTHER POINT FROM WHICH A LARGE-                                                            
18       DIAMETER IN-STATE NATURAL GAS PIPELINE MAY BE CONSTRUCTED                                                         
19       SOUTH TO] tidewater in either the Prince William Sound or Cook Inlet area. The                                
20       corporation may use money appropriated to the large-diameter natural gas                                      
21       pipeline project fund created in AS 31.25.110 for the purposes described in this                              
22       subsection and may not use money appropriated to the in-state natural gas                                     
23       pipeline fund created in AS 31.25.100 for the purposes described in this                                      
24       subsection. [IN THIS SUBSECTION, "LARGE-DIAMETER IN-STATE NATURAL                                             
25       GAS PIPELINE" MEANS A PIPELINE IN THE STATE WITH A DIAMETER OF                                                    
26       42 INCHES OR MORE.]                                                                                               
27    * Sec. 4. AS 31.25.100 is amended to read:                                                                         
28            Sec. 31.25.100. In-state natural gas pipeline fund. The in-state natural gas                               
29       pipeline fund is established in the corporation and consists of money appropriated to                             
30       it. The corporation shall determine fund management and may contract with the                                     
31       Department of Revenue for fund management. Unless otherwise provided by law,                                      
01       money appropriated to the fund lapses into the general fund on the day this section is                            
02       repealed. Interest and other income received on money in the fund shall be separately                             
03       accounted for and may be appropriated to the fund. The corporation may use money                                  
04       appropriated to the fund without further appropriation solely for the cost of managing                        
05       the fund and for the planning, financing, development, acquisition, maintenance,                                  
06       construction, and operation of the [AN] in-state natural gas pipeline described in                        
07       AS 31.25.005(1) and may not use money appropriated to the fund for any other                                  
08       purpose, including the purposes described in AS 31.25.005(4) and (5) and                                      
09       31.25.080(f).                                                                                                 
10    * Sec. 5. AS 31.25 is amended by adding a new section to read:                                                     
11            Sec. 31.25.110. Large-diameter natural gas pipeline project fund. The                                      
12       large-diameter natural gas pipeline project fund is established in the subsidiary and                             
13       consists of money appropriated to it. The subsidiary shall determine fund management                              
14       and may contract with the Department of Revenue for fund management. Interest and                                 
15       other income received on money in the fund shall be separately accounted for and may                              
16       be appropriated to the fund. The subsidiary may use money appropriated to the fund                                
17       without further appropriation for the purpose of managing the fund and for the                                    
18       planning, financing, acquisition, maintenance, construction, and operation of a large-                            
19       diameter natural gas pipeline project, including treatment and liquefaction facilities,                           
20       and may not use the money appropriated to the fund for the purpose described in                                   
21       AS 31.25.005(1). If money is appropriated to the fund to finance the cost of a large-                             
22       diameter natural gas pipeline project described in AS 31.25.005(4) and (5), the                                   
23       subsidiary shall create an account in the fund for that purpose and shall hold the                                
24       money appropriated for that purpose in that account. In this section, "subsidiary"                                
25       means a subsidiary established under AS 31.25.122.                                                                
26    * Sec. 6. AS 31.25.120 is amended to read:                                                                         
27            Sec. 31.25.120. Creation of subsidiaries for an in-state natural gas pipeline                            
28       project. The corporation may create subsidiary corporations for the purpose of                                
29       developing, constructing, operating, and financing in-state natural gas pipeline                                  
30       projects or other transportation mechanisms; for the purpose of aiding in the                                     
31       development, construction, operation, and financing of in-state natural gas pipeline                              
01       projects; or for the purpose of acquiring the state's royalty share of natural gas, natural                       
02       gas from the North Slope, and natural gas from other regions of the state, including the                          
03       state's outer continental shelf, and making that natural gas available to markets in the                          
04       state, including the delivery of natural gas, including propane and other hydrocarbons                            
05       associated with natural gas other than oil, to coastal communities in the state, or for                           
06       export. A subsidiary corporation created under this section may be incorporated under                             
07       AS 10.20.146 - 10.20.166. Except as provided in AS 31.25.110, the [THE]                                       
08       corporation may transfer assets of the corporation to a subsidiary created under this                             
09       section. A subsidiary created under this section may borrow money and issue bonds as                              
10       evidence of that borrowing and has all the powers of the corporation that the                                     
11       corporation grants to it. Unless otherwise provided by the corporation, the debts,                                
12       liabilities, and obligations of a subsidiary corporation created under this section are not                       
13       the debts, liabilities, or obligations of the corporation. A subsidiary corporation                           
14       created under this section may use money appropriated under AS 31.25.100 and                                  
15       may not use money appropriated under AS 31.25.110.                                                            
16    * Sec. 7. AS 31.25 is amended by adding a new section to read:                                                     
17            Sec. 31.25.122. Creation of a subsidiary for a large-diameter natural gas                                  
18       pipeline project. (a) To maximize the economic recovery and value of the state's                                
19       natural gas royalties and gas tax revenues for the benefit of the people of the state, a                          
20       subsidiary of the corporation is established as a public corporation and government                               
21       instrumentality for administrative purposes of the corporation, but having a legal                                
22       existence independent of and separate from the state and the corporation, for the                                 
23       purposes of acquiring a state equity interest in a large-diameter natural gas pipeline                            
24       project, in natural gas treatment facilities, in liquefaction facilities, and in marine                           
25       terminal facilities related to a large-diameter natural gas project, and in entities that are                     
26       developing, constructing, and operating such facilities; for the purposes of financing                            
27       the acquisition, capital costs and operating costs related to the state equity interests;                         
28       for the purposes of supporting in the development, construction, operation, and                                   
29       financing a large-diameter natural gas pipeline project in which the subsidiary has an                            
30       equity interest; and for the purposes of transferring net revenues received by the                                
31       subsidiary related to equity interests acquired to the permanent fund and the general                             
01       fund as determined by the commissioner of natural resources in consultation with the                              
02       commissioner of revenue. The subsidiary created under this section may use money                                  
03       appropriated under AS 31.25.110 and may not use money appropriated under                                          
04       AS 31.25.100.                                                                                                     
05            (b)  The subsidiary created under this section shall be governed by a board of                               
06       directors consisting of                                                                                           
07                 (1)  the chair of the corporation;                                                                      
08                 (2)  the commissioner of natural resources;                                                             
09                 (3)  the commissioner of revenue; and                                                                   
10                 (4)  four public members, one of whom is a public member of the board                                   
11       of directors under AS 31.25.030(a)(1).                                                                            
12            (c)  Public members of the subsidiary board shall be appointed by the                                        
13       governor. Subsidiary board members appointed under (b)(4) of this section shall be                                
14       compensated as provided in AS 31.25.020(d). Public members of the subsidiary                                      
15       board serve five-year terms. A public member serves at the pleasure of the                                        
16       governor. The provisions of AS 31.25.030, 31.25.035, and 31.25.040 apply to the                                   
17       board of the subsidiary.                                                                                          
18            (d)  In addition to other powers granted in this section, the subsidiary may                                 
19                 (1)  determine the form of ownership and the operating structure of a                                   
20       large-diameter natural gas pipeline project developed by the subsidiary and may enter                             
21       into agreements with other persons for joint ownership, joint operation, or both, of a                            
22       large-diameter natural gas pipeline project;                                                                      
23                 (2)  plan, finance, construct, develop, acquire, maintain, and operate a                                
24       pipeline system and other transportation mechanism, including pipelines, treatment                                
25       and liquefaction facilities, marine terminals, compressors, storage facilities, and other                       
26       related facilities, equipment, and works of public improvement in the state to facilitate                         
27       production, transportation, and delivery of natural gas or other related natural                                  
28       resources to the point of consumption or to the point of distribution for consumption;                            
29                 (3)  lease or rent facilities, structures, and properties;                                              
30                 (4)  exercise the power of eminent domain and file a declaration of                                     
31       taking under AS 09.55.240 - 09.55.460 to acquire land or an interest in land that is                              
01       necessary for a large-diameter natural gas pipeline project; the exercise of powers by                            
02       the subsidiary under this paragraph may not exceed the permissible exercise of the                                
03       powers by the state;                                                                                              
04                 (5)  acquire, by purchase, lease, or gift, land, structures, real or personal                           
05       property, an interest in property, a right-of-way, a franchise, an easement, or other                             
06       interest in land, or an interest in or right to capacity in a pipeline system determined to                       
07       be necessary or convenient for the development, financing, construction, or operation                             
08       of a large-diameter natural gas pipeline project;                                                                 
09                 (6)  transfer or otherwise dispose of all or part of a large-diameter                                   
10       natural gas pipeline project developed by the subsidiary or transfer or otherwise                             
11       dispose of an interest in an asset of the subsidiary;                                                             
12                 (7)  elect to provide transportation of natural gas as a contract carrier,                              
13       common carrier, or otherwise;                                                                                     
14                 (8)  provide light, water, security, and other services for property of the                             
15       subsidiary;                                                                                                       
16                 (9)  conduct hearings to gather and develop data consistent with the                                    
17       purpose and powers of the subsidiary;                                                                             
18                 (10)  advocate for new capacity in the project before regulatory                                        
19       agencies;                                                                                                         
20                 (11)  make and execute agreements, contracts, and other instruments                                     
21       necessary or convenient in the exercise of the powers and functions of the subsidiary                           
22       under this section, including a contract with a person, firm, corporation, governmental                           
23       agency, or other entity;                                                                                          
24                 (12)  sue and be sued in its own name;                                                                  
25                 (13)  adopt an official seal;                                                                           
26                 (14)  adopt bylaws for the regulation of its affairs and the conduct of its                             
27       business and adopt regulations and policies in connection with the performance of its                             
28       functions and duties;                                                                                             
29                 (15)  employ fiscal consultants, engineers, attorneys, appraisers, and                                  
30       other consultants and employees that may, in the judgment of the subsidiary, be                                   
31       required and fix and pay their compensation from funds available to the subsidiary;                               
01                 (16)  procure insurance against a loss in connection with its operation;                                
02                 (17)  borrow money as provided in this chapter to carry out its                                         
03       corporate purposes and issue its obligations as evidence of borrowing;                                            
04                 (18)  include in a borrowing the amounts necessary to pay financing                                     
05       charges, to pay interest on the obligations, and to pay the interest, consultant, advisory,                       
06       and legal fees, and other expenses that are necessary or incident to the borrowing;                               
07                 (19)  receive, administer, and comply with the conditions and                                           
08       requirements of an appropriation, gift, grant, or donation of property or money;                                  
09                 (20)  do all acts and things necessary, convenient, or desirable to carry                               
10       out the powers expressly granted or necessarily implied in this section;                                          
11                 (21)  invest or reinvest, subject to its contracts with noteholders and                                 
12       bondholders, money or funds held by the subsidiary, including funds in the large-                                 
13       diameter natural gas project pipeline fund (AS 31.25.110), in obligations or other                            
14       securities or investments in which banks or trust companies in the state may legally                              
15       invest funds held in reserves or sinking funds or funds not required for immediate                                
16       disbursement, and in certificates of deposit or time deposits secured by obligations of,                          
17       or guaranteed by, the state or the United States;                                                                 
18                 (22)  enter into, as it determines to be necessary or appropriate, any                                  
19       swap or hedge, cap, or other contract providing for payments based on levels of or                                
20       changes in interest rates or indices or in the cost or price of any commodity, supply, or                         
21       expense expected to be used or incurred in connection with the acquisition,                                       
22       construction, or operation of any facility or property owned, leased, or operated by the                          
23       subsidiary, or an option with respect to any of the foregoing.                                                    
24            (e)  Except as provided in AS 31.25.100, the corporation may transfer assets to                              
25       the subsidiary. The provisions of AS 31.25.090, 31.25.130, 31.25.140, 31.25.160,                                  
26       31.25.170, 31.25.180, 31.25.190, 31.25.200, 31.25.210, 31.25.220, 31.25.230,                                      
27       31.25.240, 31.25.250, 31.25.260, 31.25.270, and 31.25.390 apply to the subsidiary                                 
28       created under this section for a large-diameter natural gas pipeline project, and                                 
29       references in those sections to                                                                                   
30                 (1)  "the corporation" shall refer to the subsidiary created under this                                 
31       section; and                                                                                                      
01                 (2)  "in-state natural gas pipeline" shall refer to a large-diameter natural                            
02       gas pipeline project as described in AS 31.25.005(4) and (5).                                                     
03            (f)  The subsidiary under this section shall employ a project coordinator, who                               
04       may not be a member of the board. The project coordinator shall be appointed by the                               
05       subsidiary board and serves at the pleasure of the subsidiary board. The subsidiary                               
06       board may engage professional and technical advisers as independent contractors. The                              
07       project coordinator may hire employees for the subsidiary and engage professional and                             
08       technical advisers as independent contractors upon approval of the subsidiary board.                              
09       Employees of the subsidiary created under this section are state employees in the                                 
10       exempt service under AS 39.25.110. The subsidiary board shall prescribe the duties                                
11       and compensation of subsidiary personnel, including the project coordinator.                                      
12            (g)  The subsidiary may not be terminated as long as it has bonds, notes, or                                 
13       other obligations outstanding. Upon termination of the subsidiary, its rights and                                 
14       property pass to the state.                                                                                       
15    * Sec. 8. AS 31.25.390(5) is amended to read:                                                                      
16                 (5)  "in-state natural gas pipeline" means a natural gas pipeline for                                   
17       transporting natural gas in the state as described in AS 31.25.005(1);                                        
18    * Sec. 9. AS 31.25.390 is amended by adding new paragraphs to read:                                              
19                 (7)  "large-diameter natural gas pipeline project" means a natural gas                                  
20       pipeline project as described in AS 31.25.005(4) and (5) that includes facilities for                             
21       treatment and liquefaction of natural gas, including any marine terminal facilities;                              
22                 (8)  "subsidiary board" means the governing board of a subsidiary                                       
23       created under AS 31.25.122.                                                                                       
24    * Sec. 10. AS 38.05.020(b) is amended to read:                                                                     
25            (b)  The commissioner may                                                                                    
26                 (1)  establish reasonable procedures and adopt reasonable regulations                                   
27       necessary to carry out this chapter and, whenever necessary, issue directives or orders                           
28       to the director to carry out specific functions and duties; regulations adopted by the                            
29       commissioner shall be adopted under AS 44.62 (Administrative Procedure Act);                                      
30       orders by the commissioner classifying land, issued after January 3, 1959, are not                                
31       required to be adopted under AS 44.62 (Administrative Procedure Act);                                             
01                 (2)  enter into agreements considered necessary to carry out the                                        
02       purposes of this chapter, including agreements with federal and state agencies;                                   
03                 (3)  review any order or action of the director;                                                        
04                 (4)  exercise the powers and do the acts necessary to carry out the                                     
05       provisions and objectives of this chapter;                                                                        
06                 (5)  notwithstanding the provisions of any other section of this chapter,                               
07       grant an extension of the time within which payments due on any exploration license,                              
08       lease, or sale of state land, minerals, or materials may be made, including payment of                            
09       rental and royalties, on a finding that compliance with the requirements is or was                                
10       prevented by reason of war, riots, or acts of God;                                                                
11                 (6)  classify tracts for agricultural uses;                                                             
12                 (7)  after consulting with the Board of Agriculture and Conservation                                    
13       (AS 03.09.010), waive, postpone, or otherwise modify the development requirements                                 
14       of a contract for the sale of agricultural land if                                                                
15                      (A)  the land is inaccessible by road; or                                                          
16                      (B)  transportation, marketing, and development costs render                                       
17            the required development uneconomic;                                                                         
18                 (8)  reconvey or relinquish land or an interest in land to the federal                                  
19       government if                                                                                                     
20                      (A)  the land is described in an amended application for an                                        
21            allotment under 43 U.S.C. 1617; and                                                                          
22                      (B)  the reconveyance or relinquishment is                                                         
23                           (i)  for the purposes provided in 43 U.S.C. 1617; and                                         
24                           (ii)  in the best interests of the state;                                                     
25                 (9)  lead and coordinate all matters relating to the state's review and                                 
26       authorization of resource development projects;                                                                   
27                 (10)  enter into commercial agreements with a duration of not more                                  
28       than two years for project services related to a North Slope natural gas project;                             
29                 (11)  in consultation with the commissioner of revenue, participate                                 
30       in the negotiation of contracts and development of terms for inclusion in                                     
31       proposed contracts associated with a North Slope natural gas project; a contract                              
01       negotiated under this paragraph to which the state is a party is not effective                                
02       unless the legislature authorizes the governor to execute the contract;                                       
03                 (12)  enter into confidentiality agreements to maintain the                                         
04       confidentiality of information related to contract negotiations and contract                                  
05       implementation associated with a North Slope natural gas project; information                                 
06       under those confidentiality agreements is not subject to AS 40.25 (Alaska Public                              
07       Records Act), except that                                                                                     
08                      (A)  the terms of a proposed contract that the commissioner                                    
09            presents to the legislature for the purpose of obtaining authorization for                               
10            the governor to execute is not confidential; and                                                         
11                      (B)  confidential information obtained under this paragraph                                    
12            may be shared with the legislature only in committees held in executive                                  
13            session or under confidentiality agreements;                                                             
14                 (13)  exercise the powers and do the acts necessary to carry out the                                
15       provisions and objectives of AS 43.90 that relate to this chapter.                                                
16    * Sec. 11. AS 38.05.020(b), as amended by sec. 10 of this Act, is amended to read:                                 
17            (b)  The commissioner may                                                                                    
18                 (1)  establish reasonable procedures and adopt reasonable regulations                                   
19       necessary to carry out this chapter and, whenever necessary, issue directives or orders                           
20       to the director to carry out specific functions and duties; regulations adopted by the                            
21       commissioner shall be adopted under AS 44.62 (Administrative Procedure Act);                                      
22       orders by the commissioner classifying land, issued after January 3, 1959, are not                                
23       required to be adopted under AS 44.62 (Administrative Procedure Act);                                             
24                 (2)  enter into agreements considered necessary to carry out the                                        
25       purposes of this chapter, including agreements with federal and state agencies;                                   
26                 (3)  review any order or action of the director;                                                        
27                 (4)  exercise the powers and do the acts necessary to carry out the                                     
28       provisions and objectives of this chapter;                                                                        
29                 (5)  notwithstanding the provisions of any other section of this chapter,                               
30       grant an extension of the time within which payments due on any exploration license,                              
31       lease, or sale of state land, minerals, or materials may be made, including payment of                            
01       rental and royalties, on a finding that compliance with the requirements is or was                                
02       prevented by reason of war, riots, or acts of God;                                                                
03                 (6)  classify tracts for agricultural uses;                                                             
04                 (7)  after consulting with the Board of Agriculture and Conservation                                    
05       (AS 03.09.010), waive, postpone, or otherwise modify the development requirements                                 
06       of a contract for the sale of agricultural land if                                                                
07                      (A)  the land is inaccessible by road; or                                                          
08                      (B)  transportation, marketing, and development costs render                                       
09            the required development uneconomic;                                                                         
10                 (8)  reconvey or relinquish land or an interest in land to the federal                                  
11       government if                                                                                                     
12                      (A)  the land is described in an amended application for an                                        
13            allotment under 43 U.S.C. 1617; and                                                                          
14                      (B)  the reconveyance or relinquishment is                                                         
15                           (i)  for the purposes provided in 43 U.S.C. 1617; and                                         
16                           (ii)  in the best interests of the state;                                                     
17                 (9)  lead and coordinate all matters relating to the state's review and                                 
18       authorization of resource development projects;                                                                   
19                 (10)  enter into commercial agreements with a duration of not more                                      
20       than two years for project services related to a North Slope natural gas project;                                 
21                 (11)  in consultation with the commissioner of revenue, participate in                                  
22       the negotiation of contracts and development of terms for inclusion in proposed                                   
23       contracts associated with a North Slope natural gas project; a contract negotiated                                
24       under this paragraph to which the state is a party is not effective unless the legislature                        
25       authorizes the governor to execute the contract;                                                                  
26                 (12)  enter into confidentiality agreements to maintain the                                             
27       confidentiality of information related to contract negotiations and contract                                      
28       implementation associated with a North Slope natural gas project; information under                               
29       those confidentiality agreements is not subject to AS 40.25 (Alaska Public Records                                
30       Act), except that                                                                                                 
31                      (A)  the terms of a proposed contract that the commissioner                                        
01            presents to the legislature for the purpose of obtaining authorization for the                               
02            governor to execute is not confidential; and                                                                 
03                      (B)  confidential information obtained under this paragraph may                                    
04            be shared with the legislature only in committees held in executive session or                               
05            under confidentiality agreements;                                                                            
06                 (13)  in consultation with the commissioner of revenue, take                                        
07       custody of gas delivered to the state under AS 43.55.014(b) and manage the                                    
08       project services and disposition and sale of that gas;                                                        
09                 (14)  exercise the powers and do the acts necessary to carry out the                                
10       provisions and objectives of AS 43.90 that relate to this chapter.                                                
11    * Sec. 12. AS 38.05.180(i) is amended to read:                                                                     
12            (i)  The commissioner may provide for the establishment of an exploration                                    
13       incentive credit system under which a lessee of state land drilling an exploratory well                           
14       on that land may earn credits based upon the footage drilled and the region in which                              
15       the well is situated. The commissioner may also provide for credits to be earned by                               
16       persons performing geophysical work on state land, if that work is performed during                               
17       the two seasons immediately preceding an announced lease sale and on land included                                
18       within the sale area and the geophysical information is made public following the sale.                           
19       Credits may not exceed 50 percent of the cost of the drilling or geophysical work.                                
20       Credits may be used during a limited period established by the commissioner and may                               
21       be assigned during that period. Credits may be applied against (1) royalty and rental                             
22       payments for oil and gas or for gas only payable to the state or (2) taxes payable under                          
23       AS 43.55.011 [AS 43.55]. A credit may not exceed 50 percent of the payment toward                             
24       which it is being applied. Amounts due the Alaska permanent fund (AS 37.13.010)                                   
25       shall be calculated before the application of credits under this subsection.                                      
26    * Sec. 13. AS 38.05.180 is amended by adding a new subsection to read:                                             
27            (hh)  Notwithstanding any other provisions of this chapter, if the commissioner                              
28       makes a written determination that a North Slope natural gas project has sufficient                               
29       financial commitment for a work plan and budget necessary to support major permits                                
30       and regulatory filings required by state and federal agencies, and sufficient                                     
31       commitment of gas by lessees, the commissioner may propose modifications to                                       
01       existing leases that relate to                                                                                    
02                 (1)  switching between taking the state's royalty gas in value and in                                   
03       kind to ensure that the state's actions do not unreasonably                                                       
04                      (A)  cause the lessee or other person to bear disproportionate                                     
05            transportation costs with respect to the state's royalty gas; or                                             
06                      (B)  interfere with long-term marketing of natural gas by the                                      
07            lessee or other person;                                                                                      
08                 (2)  providing a method for establishing a fair market value for each                                   
09       component of the state's royalty gas and using appropriate adjustments to reflect fair                            
10       market value deductions for actual and reasonable transportation and processing costs                             
11       for the state's royalty gas from the North Slope to the first destination market; and                             
12                 (3)  establishing fixed royalty rates and modifying net profit shares                                   
13       under leases subject to this subsection.                                                                          
14    * Sec. 14. AS 38.05.180(hh), as enacted in sec. 13 of this Act, is amended to read:                                
15            (hh)  Notwithstanding any other provisions of this chapter, if the commissioner                              
16       makes a written determination that a North Slope natural gas project has sufficient                               
17       financial commitment for a work plan and budget necessary to support major permits                                
18       and regulatory filings required by state and federal agencies, and sufficient                                     
19       commitment of gas by lessees, the commissioner may propose modifications to                                       
20       existing leases that relate to                                                                                    
21                 (1)  switching between taking the state's royalty gas in value and in                                   
22       kind to ensure that the state's actions do not unreasonably                                                       
23                      (A)  cause the lessee or other person to bear disproportionate                                     
24            transportation costs with respect to the state's royalty gas or gas delivered to                         
25            the state under AS 43.55.014(b); or                                                                      
26                      (B)  interfere with long-term marketing of natural gas by the                                      
27            lessee or other person;                                                                                      
28                 (2)  providing a method for establishing a fair market value for each                                   
29       component of the state's royalty gas and using appropriate adjustments to reflect fair                            
30       market value deductions for actual and reasonable transportation and processing costs                             
31       for the state's royalty gas from the North Slope to the first destination market; and                             
01                 (3)  establishing fixed royalty rates and modifying net profit shares                                   
02       under leases subject to this subsection.                                                                          
03    * Sec. 15. AS 38.05.183(a) is amended to read:                                                                     
04            (a)  The sale, exchange, or other disposal of a mineral obtained by the state as a                           
05       royalty under AS 38.05.182, [OR] the sale, exchange, or other disposal in whole or in                             
06       part of a right to receive future mineral production under a state lease under this                               
07       chapter, or the sale, exchange, or other disposal of gas delivered to the state under                         
08       AS 43.55.014(b) shall be by competitive bid and the sale, exchange, or other disposal                         
09       made to the highest responsible bidder, except that competitive bidding is not required                           
10       when the commissioner, after prior written notice to the Alaska Royalty Oil and Gas                               
11       Development Advisory Board under AS 38.06.050, determines that the best interest of                               
12       the state does not require it or that no competition exists.                                                      
13    * Sec. 16. AS 38.05.183(c) is amended to read:                                                                     
14            (c)  If the commissioner determines that a sale, exchange, or other disposal of a                            
15       mineral obtained by the state as a royalty under AS 38.05.182, [OR] of a right to                             
16       receive future mineral production under a state lease under this chapter, or of gas                           
17       delivered to the state under AS 43.55.014(b) shall be made otherwise than by                                  
18       competitive bid, and the Alaska Royalty Oil and Gas Development Advisory Board                                    
19       has been notified in writing of that determination, the commissioner shall make public                            
20       in writing the specific findings and conclusions upon which that determination is                                 
21       based.                                                                                                            
22    * Sec. 17. AS 38.05.183(d) is amended to read:                                                                     
23            (d)  Oil or gas taken in kind by the state as its royalty share or gas delivered to                      
24       the state under AS 43.55.014(b) may not be sold or otherwise disposed of for export                           
25       from the state until the commissioner determines that the [ROYALTY-IN-KIND] oil                                   
26       or gas is surplus to the present and projected intrastate domestic and industrial needs.                          
27       The commissioner shall make public, in writing, the specific findings and reasons on                              
28       which the determination is based.                                                                                 
29    * Sec. 18. AS 38.05.183(e) is amended to read:                                                                     
30            (e)  When a sale, exchange, or other disposal of oil or gas taken in kind by the                             
31       state as its royalty share, or a sale, exchange, or other disposal in whole or in part of a                       
01       right to receive future royalty oil or gas, under a state lease under this chapter is made                        
02       other than by competitive bid, or when a sale, exchange, or other disposal of gas                             
03       delivered to the state under AS 43.55.014(b) is made other than by competitive                                
04       bid, the sale, exchange, or other disposal shall be awarded by the commissioner to the                        
05       prospective buyer whose proposal offers the maximum benefits to citizens of the state.                            
06       The commissioner shall consider                                                                                   
07                 (1)  the cash value offered;                                                                            
08                 (2)  the projected effects of the sale, exchange, or other disposal on the                              
09       economy of the state;                                                                                             
10                 (3)  the projected benefits of refining or processing the oil or gas in the                             
11       state;                                                                                                            
12                 (4)  the ability of the prospective buyer to provide refined products or                                
13       by-products for distribution and sale in the state with price or supply benefits to the                           
14       citizens of the state; and                                                                                        
15                 (5)  the criteria listed in AS 38.06.070(a).                                                            
16    * Sec. 19. AS 38.05.965 is amended by adding new paragraphs to read:                                               
17                 (26)  "North Slope natural gas project" means a project to produce                                      
18       natural gas from state oil and gas leases that include land north of 68 degrees North                             
19       latitude for transport in a gaseous state from the North Slope;                                                 
20                 (27)  "project services" means services provided by a gas treatment                                     
21       plant, pipeline, liquefaction facility, or marine terminal, marine transportation                                 
22       services, or other services necessary to take natural gas to market.                                              
23    * Sec. 20. AS 40.25.100(a) is amended to read:                                                                     
24            (a)  Information in the possession of the Department of Revenue that discloses                               
25       the particulars of the business or affairs of a taxpayer or other person, including                           
26       information under AS 38.05.020(b)(11) that is subject to a confidentiality                                    
27       agreement under AS 38.05.020(b)(12), is not a matter of public record, except as                              
28       provided in AS 43.05.230(i) or for purposes of investigation and law enforcement. The                             
29       information shall be kept confidential except when its production is required in an                               
30       official investigation, administrative adjudication under AS 43.05.405 - 43.05.499, or                            
31       court proceeding. These restrictions do not prohibit the publication of statistics                                
01       presented in a manner that prevents the identification of particular reports and items,                           
02       prohibit the publication of tax lists showing the names of taxpayers who are delinquent                           
03       and relevant information that may assist in the collection of delinquent taxes, or                                
04       prohibit the publication of records, proceedings, and decisions under AS 43.05.405 -                              
05       43.05.499.                                                                                                        
06    * Sec. 21.  AS 40.25.100, as amended by sec. 20 of this Act, is amended to read:                                   
07            (a)  Information in the possession of the Department of Revenue that discloses                               
08       the particulars of the business or affairs of a taxpayer or other person, including                               
09       information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement                              
10       under AS 38.05.020(b)(12), is not a matter of public record, except as provided in                                
11       AS 43.05.230(i) or (k) or for purposes of investigation and law enforcement. The                              
12       information shall be kept confidential except when its production is required in an                               
13       official investigation, administrative adjudication under AS 43.05.405 - 43.05.499, or                            
14       court proceeding. These restrictions do not prohibit the publication of statistics                                
15       presented in a manner that prevents the identification of particular reports and items,                           
16       prohibit the publication of tax lists showing the names of taxpayers who are delinquent                           
17       and relevant information that may assist in the collection of delinquent taxes, or                                
18       prohibit the publication of records, proceedings, and decisions under AS 43.05.405 -                              
19       43.05.499.                                                                                                        
20    * Sec. 22. AS 40.25.120(a) is amended to read:                                                                     
21            (a)  Every person has a right to inspect a public record in the state, including                             
22       public records in recorders' offices, except                                                                      
23                 (1)  records of vital statistics and adoption proceedings, which shall be                               
24       treated in the manner required by AS 18.50;                                                                       
25                 (2)  records pertaining to juveniles unless disclosure is authorized by                                 
26       law;                                                                                                              
27                 (3)  medical and related public health records;                                                         
28                 (4)  records required to be kept confidential by a federal law or                                       
29       regulation or by state law;                                                                                       
30                 (5)  to the extent the records are required to be kept confidential under                               
31       20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure                              
01       or retain federal assistance;                                                                                     
02                 (6)  records or information compiled for law enforcement purposes, but                                  
03       only to the extent that the production of the law enforcement records or information                              
04                      (A)  could reasonably be expected to interfere with enforcement                                    
05            proceedings;                                                                                                 
06                      (B)  would deprive a person of a right to a fair trial or an                                       
07            impartial adjudication;                                                                                      
08                      (C)  could reasonably be expected to constitute an unwarranted                                     
09            invasion of the personal privacy of a suspect, defendant, victim, or witness;                                
10                      (D)  could reasonably be expected to disclose the identity of a                                    
11            confidential source;                                                                                         
12                      (E)  would disclose confidential techniques and procedures for                                     
13            law enforcement investigations or prosecutions;                                                              
14                      (F)  would disclose guidelines for law enforcement                                                 
15            investigations or prosecutions if the disclosure could reasonably be expected to                             
16            risk circumvention of the law; or                                                                            
17                      (G)  could reasonably be expected to endanger the life or                                          
18            physical safety of an individual;                                                                            
19                 (7)  names, addresses, and other information identifying a person as a                                  
20       participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the                                
21       advance college tuition savings program under AS 14.40.803 - 14.40.817;                                           
22                 (8)  public records containing information that would disclose or might                                 
23       lead to the disclosure of a component in the process used to execute or adopt an                                  
24       electronic signature if the disclosure would or might cause the electronic signature to                           
25       cease being under the sole control of the person using it;                                                        
26                 (9)  reports submitted under AS 05.25.030 concerning certain                                            
27       collisions, accidents, or other casualties involving boats;                                                       
28                 (10)  records or information pertaining to a plan, program, or                                          
29       procedures for establishing, maintaining, or restoring security in the state, or to a                             
30       detailed description or evaluation of systems, facilities, or infrastructure in the state,                        
31       but only to the extent that the production of the records or information                                          
01                      (A)  could reasonably be expected to interfere with the                                            
02            implementation or enforcement of the security plan, program, or procedures;                                  
03                      (B)  would disclose confidential guidelines for investigations or                                  
04            enforcement and the disclosure could reasonably be expected to risk                                          
05            circumvention of the law; or                                                                                 
06                      (C)  could reasonably be expected to endanger the life or                                          
07            physical safety of an individual or to present a real and substantial risk to the                            
08            public health and welfare;                                                                                   
09                 (11)  the written notification regarding a proposed regulation provided                                 
10       under AS 24.20.105 to the Department of Law and the affected state agency and                                     
11       communications between the Legislative Affairs Agency, the Department of Law, and                                 
12       the affected state agency under AS 24.20.105;                                                                     
13                 (12)  records that are                                                                                  
14                      (A)  proprietary, privileged, or a trade secret in accordance with                                 
15            AS 43.90.150 or 43.90.220(e);                                                                                
16                      (B)  applications that are received under AS 43.90 until notice is                                 
17            published under AS 43.90.160;                                                                                
18                 (13)  information of the Alaska Gasline Development Corporation                                         
19       created under AS 31.25.010 or a subsidiary of the Alaska Gasline Development                                      
20       Corporation that is confidential by law or under a valid confidentiality agreement;                           
21                 (14)  information under AS 38.05.020(b)(11) that is subject to a                                    
22       confidentiality agreement under AS 38.05.020(b)(12).                                                          
23    * Sec. 23. AS 43.05.010 is amended to read:                                                                        
24            Sec. 43.05.010. Duties of the commissioner. The commissioner of revenue                                    
25       shall                                                                                                             
26                 (1)  exercise general supervision and direct the activities of the                                      
27       Department of Revenue;                                                                                            
28                 (2)  supervise the fiscal affairs and responsibilities of the department;                               
29                 (3)  prescribe uniform rules for investigations and hearings;                                           
30                 (4)  keep a record of all departmental proceedings, record and file all                                 
31       bonds, and assume custody of returns, reports, papers, and documents of the                                       
01       department;                                                                                                       
02                 (5)  adopt a seal and affix it to each order, process, or certificate issued                            
03       by the commissioner;                                                                                              
04                 (6)  keep a record of each order, process, and certificate issued by the                                
05       commissioner, and keep the record open to public inspection at all reasonable times;                              
06                 (7)  hold hearings and investigations necessary for the administration of                               
07       state tax and revenue laws;                                                                                       
08                 (8)  except as provided in AS 43.05.405 - 43.05.499 and in                                              
09       AS 44.64.030, hear and determine appeals of a matter within the jurisdiction of the                               
10       Department of Revenue and enter orders on the appeals that are final unless reversed                              
11       or modified by the courts;                                                                                        
12                 (9)  issue subpoenas to require the attendance of witnesses and the                                     
13       production of necessary books, papers, documents, correspondence, and other things;                               
14                 (10)  order the taking of depositions before a person competent to                                      
15       administer oaths;                                                                                                 
16                 (11)  administer oaths and take acknowledgments;                                                        
17                 (12)  request the attorney general for rulings on the interpretation of the                             
18       tax and revenue laws administered by the department;                                                              
19                 (13)  call upon the attorney general to institute actions for recovery of                               
20       unpaid taxes, fees, excises, additions to tax, penalties, and interest;                                           
21                 (14)  issue warrants for the collection of unpaid tax penalties and                                     
22       interest and take all steps necessary and proper to enforce full and complete                                     
23       compliance with the tax, license, excise, and other revenue laws of the state;                                    
24                 (15)  report to the legislature before February 15 of each year the total                               
25       amount of contributions reported and the total amount of credit claimed during the                                
26       previous calendar year under AS 43.20.014, AS 43.55.019, AS 43.56.018,                                            
27       AS 43.65.018, AS 43.75.018, and AS 43.77.045;                                                                 
28                 (16)  consult with the commissioner of natural resources on                                         
29       negotiation of contracts and development of terms for inclusion in proposed                                   
30       contracts associated with a North Slope natural gas project.                                                  
31    * Sec. 24. AS 43.05.010, as amended by sec. 23 of this Act, is amended to read:                                    
01            Sec. 43.05.010. Duties of the commissioner. The commissioner of revenue                                    
02       shall                                                                                                             
03                 (1)  exercise general supervision and direct the activities of the                                      
04       Department of Revenue;                                                                                            
05                 (2)  supervise the fiscal affairs and responsibilities of the department;                               
06                 (3)  prescribe uniform rules for investigations and hearings;                                           
07                 (4)  keep a record of all departmental proceedings, record and file all                                 
08       bonds, and assume custody of returns, reports, papers, and documents of the                                       
09       department;                                                                                                       
10                 (5)  adopt a seal and affix it to each order, process, or certificate issued                            
11       by the commissioner;                                                                                              
12                 (6)  keep a record of each order, process, and certificate issued by the                                
13       commissioner, and keep the record open to public inspection at all reasonable times;                              
14                 (7)  hold hearings and investigations necessary for the administration of                               
15       state tax and revenue laws;                                                                                       
16                 (8)  except as provided in AS 43.05.405 - 43.05.499 and in                                              
17       AS 44.64.030, hear and determine appeals of a matter within the jurisdiction of the                               
18       Department of Revenue and enter orders on the appeals that are final unless reversed                              
19       or modified by the courts;                                                                                        
20                 (9)  issue subpoenas to require the attendance of witnesses and the                                     
21       production of necessary books, papers, documents, correspondence, and other things;                               
22                 (10)  order the taking of depositions before a person competent to                                      
23       administer oaths;                                                                                                 
24                 (11)  administer oaths and take acknowledgments;                                                        
25                 (12)  request the attorney general for rulings on the interpretation of the                             
26       tax and revenue laws administered by the department;                                                              
27                 (13)  call upon the attorney general to institute actions for recovery of                               
28       unpaid taxes, fees, excises, additions to tax, penalties, and interest;                                           
29                 (14)  issue warrants for the collection of unpaid tax penalties and                                     
30       interest and take all steps necessary and proper to enforce full and complete                                     
31       compliance with the tax, license, excise, and other revenue laws of the state;                                    
01                 (15)  report to the legislature before February 15 of each year the total                               
02       amount of contributions reported and the total amount of credit claimed during the                                
03       previous calendar year under AS 43.20.014, AS 43.55.019, AS 43.56.018,                                            
04       AS 43.65.018, AS 43.75.018, and AS 43.77.045;                                                                     
05                 (16)  consult with the commissioner of natural resources on negotiation                                 
06       of contracts and development of terms for inclusion in proposed contracts associated                              
07       with a North Slope natural gas project;                                                                       
08                 (17)  direct the disposition of revenues received from gas delivered                                
09       to the state under AS 43.55.014(b) by entering into agreements with the                                       
10       commissioner of natural resources related to the management of the custody and                                
11       disposition of gas delivered to the state under AS 43.55.014(b).                                              
12    * Sec. 25. AS 43.05.230 is amended by adding a new subsection to read:                                             
13            (k)  The name of each person that the department has allowed to make an                                      
14       election under AS 43.55.014(a) and the amount of gas produced from each lease or                                  
15       property to which an effective election under AS 43.55.014 applies is public                                      
16       information.                                                                                                      
17    * Sec. 26. AS 43.20.144(f) is amended to read:                                                                   
18            (f)  The extraction factor of a taxpayer subject to this section is a fraction,                              
19                 (1)  the numerator of which is the sum of the following for the tax                                     
20       period:                                                                                                           
21                      (A)  the number of barrels of the taxpayer's oil (net of royalty to                                
22            an unrelated party) produced from or allocated to leases or properties of the                                
23            taxpayer in this state; and                                                                                  
24                      (B)  one-sixth of the number of Mcf of the taxpayer's gas,                                     
25            including gas subject to an election under AS 43.55.014, (net of royalty to                              
26            an unrelated party) produced from or allocated to leases or properties of the                                
27            taxpayer in this state, excluding reinjected gas; and                                                        
28                 (2)  the denominator of which is the sum of the following for the tax                                   
29       period:                                                                                                           
30                      (A)  the number of barrels of oil of the taxpayer's consolidated                                   
31            business (net of royalty to an unrelated party) produced from or allocated to                                
01            leases or properties of the taxpayer's consolidated business everywhere; and                                 
02                      (B)  one-sixth of the number of Mcf of gas, including gas                                      
03            subject to an election under AS 43.55.014, of the taxpayer's consolidated                                
04            business (net of royalty to an unrelated party) produced from or allocated to                                
05            leases or properties of the taxpayer's consolidated business everywhere,                                     
06            excluding reinjected gas.                                                                                    
07    * Sec. 27. 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 or for which a tax is levied by AS 43.55.014. Except as                          
12       otherwise provided under (f), (j), (k), (o), and (p) of this section, for oil and gas                         
13       produced                                                                                                      
14                 (1)  before January 1, 2014, the tax is equal to the sum of                                             
15                      (A)  the annual production tax value of the taxable oil and gas                                    
16            as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and                                         
17                      (B)  the sum, over all months of the calendar year, of the tax                                     
18            amounts determined under (g) of this section;                                                                
19                 (2)  on and after January 1, 2014, and before January 1, 2022, the tax                              
20       is equal to the annual production tax value of the taxable oil and gas as calculated                              
21       under AS 43.55.160(a)(1) multiplied by 35 percent;                                                            
22                 (3)  on and after January 1, 2022, the tax for                                                      
23                      (A)  oil is equal to the annual production tax value of the                                    
24            taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent;                                
25                      (B)  gas is equal to 10.5 percent of the gross value at the                                    
26            point of production of the taxable gas; if the gross value at the point of                               
27            production of gas produced from a lease or property is less than zero, that                              
28            gross value at the point of production is considered zero for purposes of                                
29            this subparagraph.                                                                                     
30    * Sec. 28. AS 43.55.011(f) is amended to read:                                                                     
31            (f)  The levy of tax under (e) of this section for                                                       
01                 (1)  oil and gas produced before January 1, 2022, from leases or                                
02       properties that include land north of 68 degrees North latitude, other than [OIL                              
03       AND GAS PRODUCTION SUBJECT TO (i) OF THIS SECTION AND] gas subject                                                
04       to (o) of this section, may not be less than                                                                      
05                      (A) [(1)]  four percent of the gross value at the point of                                     
06            production when the average price per barrel for Alaska North Slope crude oil                                
07            for sale on the United States West Coast during the calendar year for which the                              
08            tax is due is more than $25;                                                                                 
09                      (B) [(2)]  three percent of the gross value at the point of                                    
10            production when the average price per barrel for Alaska North Slope crude oil                                
11            for sale on the United States West Coast during the calendar year for which the                              
12            tax is due is over $20 but not over $25;                                                                     
13                      (C) [(3)]  two percent of the gross value at the point of                                      
14            production when the average price per barrel for Alaska North Slope crude oil                                
15            for sale on the United States West Coast during the calendar year for which the                              
16            tax is due is over $17.50 but not over $20;                                                                  
17                      (D) [(4)]  one percent of the gross value at the point of                                      
18            production when the average price per barrel for Alaska North Slope crude oil                                
19            for sale on the United States West Coast during the calendar year for which the                              
20            tax is due is over $15 but not over $17.50; or                                                               
21                      (E) [(5)]  zero percent of the gross value at the point of                                     
22            production when the average price per barrel for Alaska North Slope crude oil                                
23            for sale on the United States West Coast during the calendar year for which the                              
24            tax is due is $15 or less; and                                                                           
25                 (2)  oil produced on and after January 1, 2022, from leases or                                      
26       properties that include land north of 68 degrees North latitude, may not be less                              
27       than                                                                                                          
28                      (A)  four percent of the gross value at the point of                                           
29            production when the average price per barrel for Alaska North Slope                                      
30            crude oil for sale on the United States West Coast during the calendar                                   
31            year for which the tax is due is more than $25;                                                          
01                      (B)  three percent of the gross value at the point of                                          
02            production when the average price per barrel for Alaska North Slope                                      
03            crude oil for sale on the United States West Coast during the calendar                                   
04            year for which the tax is due is over $20 but not over $25;                                              
05                      (C)  two percent of the gross value at the point of production                                 
06            when the average price per barrel for Alaska North Slope crude oil for                                   
07            sale on the United States West Coast during the calendar year for which                                  
08            the tax is due is over $17.50 but not over $20;                                                          
09                      (D)  one percent of the gross value at the point of production                                 
10            when the average price per barrel for Alaska North Slope crude oil for                                   
11            sale on the United States West Coast during the calendar year for which                                  
12            the tax is due is over $15 but not over $17.50; or                                                       
13                      (E)  zero percent of the gross value at the point of                                           
14            production when the average price per barrel for Alaska North Slope                                      
15            crude oil for sale on the United States West Coast during the calendar                                   
16            year for which the tax is due is $15 or less.                                                            
17    * Sec. 29. AS 43.55 is amended by adding a new section to read:                                                    
18            Sec. 43.55.014. Payment in kind of tax for gas. (a) For gas produced on and                                
19       after January 1, 2022, from oil and gas leases that have been modified under                                      
20       AS 38.05.180(hh), other than gas described in (e) of this section, the department may                             
21       allow a producer to make an irrevocable election, under regulations adopted by the                                
22       department, to pay a production tax in kind levied by this section in lieu of the tax                             
23       otherwise levied for the gas by AS 43.55.011(e).                                                                  
24            (b)  A production tax in kind is levied by this section equal to 10.5 percent of                             
25       the gas otherwise taxable under AS 43.55.011(e)(3) produced from each lease or                                    
26       property to which an effective election under (a) of this section applies, when and as                            
27       that gas is produced. The producer shall pay the tax in kind by delivering that 10.5                              
28       percent of the gas to the state at the entrance of the transportation facility specified by                       
29       the state.                                                                                                        
30            (c)  The Department of Natural Resources shall manage under                                                  
31       AS 38.05.020(b)(13) the custody and disposition of gas delivered to the state under (b)                           
01       of this section.                                                                                                  
02            (d)  If a deficiency in a tax levied by this section is assessed, or if a provision                          
03       of this title providing for interest or a penalty based on a percentage of a tax liability or                     
04       tax deficiency applies to gas for which a tax is levied by this section, the amount of the                        
05       deficiency and the tax amount on which the interest or penalty percentage is calculated                           
06       is treated for the purpose only of that calculation as having been levied by                                      
07       AS 43.55.011(e) rather than this section.                                                                         
08            (e)  This section does not apply to gas                                                                      
09                 (1)  flared, released, or allowed to escape upstream of the point of                                    
10       production of gas; or                                                                                             
11                 (2)  used in the operation of a lease or property in the state for drilling                             
12       for or producing oil or gas, or for repressuring a reservoir.                                                     
13    * Sec. 30. AS 43.55.019(a) is amended to read:                                                                     
14            (a)  A producer of oil or gas is allowed a credit against the tax levied by                              
15       AS 43.55.011(e) [DUE UNDER THIS CHAPTER] for cash contributions accepted for                                  
16                 (1)  direct instruction, research, and educational support purposes,                                    
17       including library and museum acquisitions, and contributions to endowment, by an                                  
18       Alaska university foundation or by a nonprofit, public or private, Alaska two-year or                             
19       four-year college accredited by a regional accreditation association;                                             
20                 (2)  secondary school level vocational education courses, programs, and                                 
21       facilities by a school district in the state;                                                                     
22                 (3)  vocational education courses, programs, and facilities by a state-                                 
23       operated vocational technical education and training school;                                                      
24                 (4)  a facility or an annual intercollegiate sports tournament by a                                     
25       nonprofit, public or private, Alaska two-year or four-year college accredited by a                                
26       regional accreditation association;                                                                               
27                 (5)  Alaska Native cultural or heritage programs and educational                                        
28       support, including mentoring and tutoring, provided by a nonprofit agency for public                              
29       school staff and for students who are in grades kindergarten through 12 in the state;                             
30                 (6)  education, research, rehabilitation, and facilities by an institution                              
31       that is located in the state and that qualifies as a coastal ecosystem learning center                            
01       under the Coastal America Partnership established by the federal government; and                                  
02                 (7)  the Alaska higher education investment fund under AS 37.14.750.                                    
03    * Sec. 31. AS 43.55.019(e) is amended to read:                                                                     
04            (e)  The credit under this section may not reduce a person's tax liability under                           
05       AS 43.55.011(e) [THIS CHAPTER] to below zero for any tax year. An unused credit                               
06       or portion of a credit not used under this section for a tax year may not be sold, traded,                        
07       transferred, or applied in a subsequent tax year.                                                                 
08    * Sec. 32. 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 shall pay                             
10       the tax as follows:                                                                                               
11                 (1)  for oil and gas produced before January 1, 2014, an installment                                
12       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
13       as allowed by law, is due for each month of the calendar year on the last day of the                              
14       following month; except as otherwise provided under (2) of this subsection, the                                   
15       amount of the installment payment is the sum of the following amounts, less 1/12 of                               
16       the tax credits that are allowed by law to be applied against the tax levied by                                   
17       AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                              
18       not be less than zero:                                                                                            
19                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                       
20            produced from leases or properties in the state outside the Cook Inlet                                       
21            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
22            the greater of                                                                                               
23                           (i)  zero; or                                                                                 
24                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
25                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
26                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
27                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
28                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
29                 at the point of production of the oil and gas produced from the leases or                               
30                 properties during the month for which the installment payment is                                        
31                 calculated;                                                                                             
01                      (B)  for oil and gas produced from leases or properties subject                                    
02            to AS 43.55.011(f), the greatest of                                                                          
03                           (i)  zero;                                                                                    
04                           (ii)  zero percent, one percent, two percent, three                                           
05                 percent, or four percent, as applicable, of the gross value at the point of                             
06                 production of the oil and gas produced from the leases or properties                                    
07                 during the month for which the installment payment is 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 under AS 43.55.160 from the gross value                                  
13                 at the point of production of the oil and gas produced from those leases                                
14                 or properties during the month for which the installment payment is                                     
15                 calculated;                                                                                             
16                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
17            each lease or property, the greater of                                                                       
18                           (i)  zero; or                                                                                 
19                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
20                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
21                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
22                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
23                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
24                 produced from the lease or property from the gross value at the point of                                
25                 production of the oil or gas, respectively, produced from the lease or                                  
26                 property during the month for which the installment payment is                                          
27                 calculated;                                                                                             
28                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
29                           (i)  the sum of 25 percent and the tax rate calculated for                                    
30                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
31                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
01                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
02                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
03                 at the point of production of the oil and gas produced from the leases or                               
04                 properties during the month for which the installment payment is                                        
05                 calculated, but not less 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 properties                                    
08                 during the month, but not less than zero;                                                               
09                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
10       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, but                          
13       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
14       amount of taxable gas produced during the month for the amount of taxable gas                                     
15       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
16       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
17       amount of taxable oil produced during the calendar year;                                                          
18                 (3)  an installment payment of the estimated tax levied by                                              
19       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
20       on the last day of the following month; the amount of the installment payment is the                              
21       sum of                                                                                                            
22                      (A)  the applicable tax rate for oil provided under                                                
23            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
24            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
25            during the month; and                                                                                        
26                      (B)  the applicable tax rate for gas provided under                                                
27            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
28            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
29            during the month;                                                                                            
30                 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                       
31       applied as allowed by law, that exceeds the total of the amounts due as installment                               
01       payments of estimated tax is due on March 31 of the year following the calendar year                              
02       of production;                                                                                                    
03                 (5)  for oil and gas produced on and after January 1, 2014, and before                          
04       January 1, 2022, an installment payment of the estimated tax levied by                                        
05       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
06       month of the calendar year on the last day of the following month; except as otherwise                            
07       provided under (6) of this subsection, the amount of the installment payment is the                               
08       sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be                          
09       applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                           
10       of the installment payment may not be less than zero:                                                             
11                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
12            produced from leases or properties in the state outside the Cook Inlet                                       
13            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
14            the greater of                                                                                               
15                           (i)  zero; or                                                                                 
16                           (ii)  35 percent multiplied by the remainder obtained by                                      
17                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
18                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
19                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
20                 at the point of production of the oil and gas produced from the leases or                               
21                 properties during the month for which the installment payment is                                        
22                 calculated;                                                                                             
23                      (B)  for oil and gas produced from leases or properties subject                                    
24            to AS 43.55.011(f), the greatest of                                                                          
25                           (i)  zero;                                                                                    
26                           (ii)  zero percent, one percent, two percent, three                                           
27                 percent, or four percent, as applicable, of the gross value at the point of                             
28                 production of the oil and gas produced from the leases or properties                                    
29                 during the month for which the installment payment is calculated; or                                    
30                           (iii)  35 percent multiplied by the remainder obtained by                                     
31                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
01                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
02                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
03                 at the point of production of the oil and gas produced from those leases                                
04                 or properties during the month for which the installment payment is                                     
05                 calculated, except that, for the purposes of this calculation, a reduction                              
06                 from the gross value at the point of production may apply for oil and                                   
07                 gas subject to AS 43.55.160(f) or (g);                                                                  
08                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
09            each lease or property, the greater of                                                                       
10                           (i)  zero; or                                                                                 
11                           (ii)  35 percent multiplied by the remainder obtained by                                      
12                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
13                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
14                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
15                 produced from the lease or property from the gross value at the point of                                
16                 production of the oil or gas, respectively, produced from the lease or                                  
17                 property during the month for which the installment payment is                                          
18                 calculated;                                                                                             
19                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
20                           (i)  35 percent multiplied by the remainder obtained by                                       
21                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
22                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
23                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
24                 at the point of production of the oil and gas produced from the leases or                               
25                 properties during the month for which the installment payment is                                        
26                 calculated, but not less than zero; or                                                                  
27                           (ii)  four percent of the gross value at the point of                                         
28                 production of the oil and gas produced from the leases or properties                                    
29                 during the month, but not less than zero;                                                               
30                 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                
31       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
01       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
02       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
03       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
04       amount of taxable gas produced during the month for the amount of taxable gas                                     
05       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
06       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
07       amount of taxable oil produced during the calendar year;                                                      
08                 (7)  for oil and gas produced on or after January 1, 2022, an                                       
09       installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax                            
10       credits applied as allowed by law, is due for each month of the calendar year on                              
11       the last day of the following month; the amount of the installment payment is the                             
12       sum of the following amounts, less 1/12 of the tax credits that are allowed by law                            
13       to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but                            
14       the amount of the installment payment may not be less than zero:                                              
15                      (A)  for oil produced from leases or properties that include                                   
16            land north of 68 degrees North latitude, the greatest of                                                 
17                           (i)  zero;                                                                                
18                           (ii)  zero percent, one percent, two percent, three                                       
19                 percent, or four percent, as applicable, of the gross value at the                                  
20                 point of production of the oil produced from the leases or                                          
21                 properties during the month for which the installment payment is                                    
22                 calculated; or                                                                                      
23                           (iii)  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 under AS 43.55.160(h)(1)                                  
27                 from the gross value at the point of production of the oil produced                                 
28                 from those leases or properties during the month for which the                                      
29                 installment payment is calculated, except that, for the purposes of                                 
30                 this calculation, a reduction from the gross value at the point of                                  
31                 production may apply for oil subject to AS 43.55.160(f) or                                          
01                 43.55.160(f) and (g);                                                                               
02                      (B)  for oil produced before or during the last calendar year                                  
03            under AS 43.55.024(b) for which the producer could take a tax credit                                     
04            under AS 43.55.024(a), from leases or properties in the state outside the                                
05            Cook Inlet sedimentary basin, no part of which is north of 68 degrees                                    
06            North latitude, other than leases or properties subject to AS 43.55.011(p),                              
07            the greater of                                                                                           
08                           (i)  zero; or                                                                             
09                           (ii)  35 percent multiplied by the remainder obtained                                     
10                 by subtracting 1/12 of the producer's adjusted lease expenditures                                   
11                 for the calendar year of production under AS 43.55.165 and                                          
12                 43.55.170 that are deductible for the oil under AS 43.55.160(h)(2)                                  
13                 from the gross value at the point of production of the oil produced                                 
14                 from the leases or properties during the month for which the                                        
15                 installment payment is calculated;                                                                  
16                      (C)  for oil and gas produced from leases or properties                                        
17            subject to AS 43.55.011(p), except as otherwise provided under (8) of this                               
18            subsection, the sum of                                                                                   
19                           (i)  35 percent multiplied by the remainder obtained                                      
20                 by subtracting 1/12 of the producer's adjusted lease expenditures                                   
21                 for the calendar year of production under AS 43.55.165 and                                          
22                 43.55.170 that are deductible for the oil under AS 43.55.160(h)(3)                                  
23                 from the gross value at the point of production of the oil produced                                 
24                 from the leases or properties during the month for which the                                        
25                 installment payment is calculated, but not less than zero; and                                      
26                           (ii)  10.5 percent of the gross value at the point of                                     
27                 production of the gas produced from the leases or properties                                        
28                 during the month, but not less than zero;                                                           
29                      (D)  for oil produced from leases or properties in the state,                                  
30            no part of which is north of 68 degrees North latitude, other than leases or                             
31            properties subject to (B) or (C) of this paragraph, the greater of                                       
01                           (i)  zero; or                                                                             
02                           (ii)  35 percent multiplied by the remainder obtained                                     
03                 by subtracting 1/12 of the producer's adjusted lease expenditures                                   
04                 for the calendar year of production under AS 43.55.165 and                                          
05                 43.55.170 that are deductible for the oil under AS 43.55.160(h)(4)                                  
06                 from the gross value at the point of production of the oil produced                                 
07                 from the leases or properties during the month for which the                                        
08                 installment payment is calculated;                                                                  
09                      (E)  for gas produced from each lease or property in the                                       
10            state, other than a lease or property subject to AS 43.55.011(p), 10.5                                   
11            percent of the gross value at the point of production of the gas produced                                
12            from the lease or property during the month for which the installment                                    
13            payment is calculated, but not less than zero;                                                           
14                 (8)  an amount calculated under (7)(C) of this subsection may not                                   
15       exceed four percent of the gross value at the point of production of the oil and gas                          
16       produced from leases or properties subject to AS 43.55.011(p) during the month                                
17       for which the installment payment is calculated;                                                              
18                 (9)  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and                              
19       (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the                            
20       point of production is determined under AS 43.55.011(f)(1) or (2) but substituting                            
21       the phrase "month for which the installment payment is calculated" in                                         
22       AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is                                 
23       due."                                                                                                     
24    * Sec. 33. AS 43.55.020(g) is amended to read:                                                                     
25            (g)  Notwithstanding any contrary provision of AS 43.05.225,                                                 
26                 (1)  before January 1, 2014, an unpaid amount of an installment                                         
27       payment required under (a)(1) - (3) of this section that is not paid when due bears                               
28       interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal                              
29       Revenue Code), as amended, compounded daily, from the date the installment                                        
30       payment is due until March 31 following the calendar year of production, and (B) as                               
31       provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued                            
01       under (A) of this paragraph that remains unpaid after that March 31 is treated as an                              
02       addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax                          
03       due under (a)(4) of this section that is not paid when due bears interest as provided for                         
04       a delinquent tax under AS 43.05.225;                                                                              
05                 (2)  on and after January 1, 2014, an unpaid amount of an installment                                   
06       payment required under (a)(3), (5), [OR] (6), or (7) of this section that is not paid                         
07       when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C.                              
08       6621 (Internal Revenue Code), as amended, compounded daily, from the date the                                     
09       installment payment is due until March 31 following the calendar year of production,                              
10       and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31;                                  
11       interest accrued under (A) of this paragraph that remains unpaid after that March 31 is                           
12       treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid                          
13       amount of tax due under (a)(4) of this section that is not paid when due bears interest                           
14       as provided for a delinquent tax under AS 43.05.225.                                                              
15    * Sec. 34. AS 43.55.020(h) is amended to read:                                                                     
16            (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                 
17                 (1)  an overpayment of an installment payment required under (a)(1),                                
18       (2), (3), (5), (6), or (7) [(a)(1) - (3), (5), OR (6)] of this section bears interest at the rate             
19       provided for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as                                      
20       amended, compounded daily, from the later of the date the installment payment is due                              
21       or the date the overpayment is made, until the earlier of                                                         
22                      (A)  the date it is refunded or is applied to an underpayment; or                                  
23                      (B)  March 31 following the calendar year of production;                                           
24                 (2)  except as provided under (1) of this subsection, interest with                                     
25       respect to an overpayment is allowed only on any net overpayment of the payments                                  
26       required under (a) of this section that remains after the later of March 31 following the                         
27       calendar year of production or the date that the statement required under                                         
28       AS 43.55.030(a) is filed;                                                                                         
29                 (3)  interest is allowed under (2) of this subsection only from a date that                             
30       is 90 days after the later of March 31 following the calendar year of production or the                           
31       date that the statement required under AS 43.55.030(a) is filed; interest is not allowed                          
01       if the overpayment was refunded within the 90-day period;                                                         
02                 (4)  interest under (2) and (3) of this subsection is paid at the rate and in                           
03       the manner provided in AS 43.05.225(1).                                                                           
04    * Sec. 35. AS 43.55.020(l) is amended to read:                                                                     
05            (l)  For oil and gas produced on [ON] and after January 1, 2014, and before                          
06       January 1, 2022, in making settlement with the royalty owner for oil and gas that is                          
07       taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on                                 
08       taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in                               
09       value at the time the tax becomes due to the amount of the tax paid. If the total                                 
10       deductions of installment payments of estimated tax for a calendar year exceed the                                
11       actual tax for that calendar year, the producer shall, before April 1 of the following                            
12       year, refund the excess to the royalty owner. Unless otherwise agreed between the                                 
13       producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on                               
14       taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or                          
15       right to which constitutes a landowner's royalty interest, is considered to be the gross                          
16       value at the point of production of the taxable royalty oil and gas produced during the                           
17       calendar year multiplied by a figure that is a quotient, in which                                                 
18                 (1)  the numerator is the producer's total tax liability under                                          
19       AS 43.55.011(e)(2) [AS 43.55.011(e)] for the calendar year of production; and                                 
20                 (2)  the denominator is the total gross value at the point of production                                
21       of the oil and gas taxable under AS 43.55.011(e) produced by the producer from all                                
22       leases and properties in the state during the calendar year.                                                      
23    * Sec. 36. AS 43.55.020 is amended by adding a new subsection to read:                                             
24            (m)  For oil and gas produced on and after January 1, 2022, in making                                        
25       settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011,                             
26       the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or                             
27       may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes                             
28       due to the amount of the tax paid. If the total deductions of installment payments of                             
29       estimated tax for a calendar year exceed the actual tax for that calendar year, the                               
30       producer shall, before April 1 of the following year, refund the excess to the royalty                            
31       owner. In making settlement with the royalty owner for gas that is taxable under                                  
01       AS 43.55.014, the producer may deduct the amount of the gas paid as in kind tax on                                
02       taxable royalty gas or may deduct the gross value at the point of production of the gas                           
03       paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the                                   
04       producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on                               
05       taxable royalty oil for a calendar year, other than oil the ownership or right to which                           
06       constitutes a landowner's royalty interest, is considered to be the gross value at the                            
07       point of production of the taxable royalty oil produced during the calendar year                                  
08       multiplied by a figure that is a quotient, in which                                                               
09                 (1)  the numerator is the producer's total tax liability under                                          
10       AS 43.55.011(e)(3)(A) for the calendar year of production; and                                                    
11                 (2)  the denominator is the total gross value at the point of production                                
12       of the oil taxable under AS 43.55.011(e) produced by the producer from all leases and                             
13       properties in the state during the calendar year.                                                                 
14    * Sec. 37. AS 43.55.030(a) is amended to read:                                                                     
15            (a)  A producer that produces oil or gas from a lease or property in the state                               
16       during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                               
17       for that oil or gas, shall file with the department on March 31 of the following year a                           
18       statement, under oath, in a form prescribed by the department, giving, with other                                 
19       information required, the following:                                                                              
20                 (1)  a description of each lease or property from which oil or gas was                                  
21       produced, by name, legal description, lease number, or accounting codes assigned by                               
22       the department;                                                                                                   
23                 (2)  the names of the producer and, if different, the person paying the                                 
24       tax, if any;                                                                                                      
25                 (3)  the gross amount of oil and the gross amount of gas produced from                                  
26       each lease or property, separately identifying the gross amount of gas produced                               
27       from each lease or property to which an effective election under AS 43.55.014(a)                              
28       applies, the amount of gas delivered to the state under AS 43.55.014(b), and the                              
29       percentage of the gross amount of oil and gas owned by the producer;                                              
30                 (4)  the gross value at the point of production of the oil and of the gas                               
31       produced from each lease or property owned by the producer and the costs of                                       
01       transportation of the oil and gas;                                                                                
02                 (5)  the name of the first purchaser and the price received for the oil and                             
03       for the gas, unless relieved from this requirement in whole or in part by the                                     
04       department;                                                                                                       
05                 (6)  the producer's qualified capital expenditures, as defined in                                       
06       AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other                               
07       payments or credits under AS 43.55.170;                                                                           
08                 (7)  the production tax values of the oil and gas under AS 43.55.160(a)                             
09       or of the oil under AS 43.55.160(h), as applicable [AS 43.55.160];                                            
10                 (8)  any claims for tax credits to be applied; and                                                      
11                 (9)  calculations showing the amounts, if any, that were or are due                                     
12       under AS 43.55.020(a) and interest on any underpayment or overpayment.                                            
13    * Sec. 38. AS 43.55.160(a) is amended to read:                                                                     
14            (a)  For oil and gas produced before January 1, 2022, except [EXCEPT] as                                 
15       provided in (b), (f), and (g) of this section, for the purposes of                                                
16                 (1)  AS 43.55.011(e)(1) and (2), the annual production tax value of                                 
17       taxable oil, gas, or oil and gas produced during a calendar year in a category for which                          
18       a separate annual production tax value is required to be calculated under this                                    
19       paragraph is the gross value at the point of production of that oil, gas, or oil and gas                          
20       taxable under AS 43.55.011(e), less the producer's lease expenditures under                                       
21       AS 43.55.165 for the calendar year applicable to the oil, gas, or oil and gas in that                             
22       category produced by the producer during the calendar year, as adjusted under                                     
23       AS 43.55.170; a separate annual production tax value shall be calculated for                                      
24                      (A)  oil and gas produced from leases or properties in the state                                   
25            that include land north of 68 degrees North latitude, other than gas produced                                
26            before 2022 and used in the state;                                                                           
27                      (B)  oil and gas produced from leases or properties in the state                                   
28            outside the Cook Inlet sedimentary basin, no part of which is north of 68                                    
29            degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a)                             
30            and (b); this subparagraph does not apply to                                                                 
31                           (i)  gas produced before 2022 and used in the state; or                                       
01                           (ii)  oil and gas subject to AS 43.55.011(p);                                                 
02                      (C)  oil produced before 2022 from each lease or property in the                                   
03            Cook Inlet sedimentary basin;                                                                                
04                      (D)  gas produced before 2022 from each lease or property in                                       
05            the Cook Inlet sedimentary basin;                                                                            
06                      (E)  gas produced before 2022 from each lease or property in                                       
07            the state outside the Cook Inlet sedimentary basin and used in the state, other                              
08            than gas subject to AS 43.55.011(p);                                                                         
09                      (F)  oil and gas subject to AS 43.55.011(p) produced from                                          
10            leases or properties in the state;                                                                           
11                      (G)  oil and gas produced from leases or properties in the state                                   
12            no part of which is north of 68 degrees North latitude, other than oil or gas                                
13            described in (B), (C), (D), (E), or (F) of this paragraph;                                                   
14                 (2)  AS 43.55.011(g), for oil and gas produced before January 1, 2014,                                  
15       the monthly production tax value of the taxable                                                                   
16                      (A)  oil and gas produced during a month from leases or                                            
17            properties in the state that include land north of 68 degrees North latitude is the                          
18            gross value at the point of production of the oil and gas taxable under                                      
19            AS 43.55.011(e) and produced by the producer from those leases or properties,                                
20            less 1/12 of the producer's lease expenditures under AS 43.55.165 for the                                    
21            calendar year applicable to the oil and gas produced by the producer from                                    
22            those leases or properties, as adjusted under AS 43.55.170; this subparagraph                                
23            does not apply to gas subject to AS 43.55.011(o);                                                            
24                      (B)  oil and gas produced during a month from leases or                                            
25            properties in the state outside the Cook Inlet sedimentary basin, no part of                                 
26            which is north of 68 degrees North latitude, is the gross value at the point of                              
27            production of the oil and gas taxable under AS 43.55.011(e) and produced by                                  
28            the producer from those leases or properties, less 1/12 of the producer's lease                              
29            expenditures under AS 43.55.165 for the calendar year applicable to the oil and                              
30            gas produced by the producer from those leases or properties, as adjusted under                              
31            AS 43.55.170; this subparagraph does not apply to gas subject to                                             
01            AS 43.55.011(o);                                                                                             
02                      (C)  oil produced during a month from a lease or property in the                                   
03            Cook Inlet sedimentary basin is the gross value at the point of production of                                
04            the oil taxable under AS 43.55.011(e) and produced by the producer from that                                 
05            lease or property, less 1/12 of the producer's lease expenditures under                                      
06            AS 43.55.165 for the calendar year applicable to the oil produced by the                                     
07            producer from that lease or property, as adjusted under AS 43.55.170;                                        
08                      (D)  gas produced during a month from a lease or property in                                       
09            the Cook Inlet sedimentary basin is the gross value at the point of production                               
10            of the gas taxable under AS 43.55.011(e) and produced by the producer from                                   
11            that lease or property, less 1/12 of the producer's lease expenditures under                                 
12            AS 43.55.165 for the calendar year applicable to the gas produced by the                                     
13            producer from that lease or property, as adjusted under AS 43.55.170;                                        
14                      (E)  gas produced during a month from a lease or property                                          
15            outside the Cook Inlet sedimentary basin and used in the state is the gross                                  
16            value at the point of production of that gas taxable under AS 43.55.011(e) and                               
17            produced by the producer from that lease or property, less 1/12 of the                                       
18            producer's lease expenditures under AS 43.55.165 for the calendar year                                       
19            applicable to that gas produced by the producer from that lease or property, as                              
20            adjusted under AS 43.55.170.                                                                                 
21    * Sec. 39. AS 43.55.160(e) is amended to read:                                                                   
22            (e)  Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that                                   
23       would otherwise be deductible by a producer in a calendar year but whose deduction                                
24       would cause an annual production tax value calculated under (a)(1) or (h) of this                             
25       section of taxable oil or gas produced during the calendar year to be less than zero                              
26       may be used to establish a carried-forward annual loss under AS 43.55.023(b).                                     
27       However, the department shall provide by regulation a method to ensure that, for a                                
28       period for which a producer's tax liability is limited by AS 43.55.011(j), (k), (o), or                           
29       (p), any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that would                                  
30       otherwise be deductible by a producer for that period but whose deduction would                                   
31       cause a production tax value calculated under (a)(1)(C), (D), (E), or (F) of this section                         
01       to be less than zero are accounted for as though the adjusted lease expenditures had                              
02       first been used as deductions in calculating the production tax values of oil or gas                              
03       subject to any of the limitations under AS 43.55.011(j), (k), (o), or (p) that have                               
04       positive production tax values so as to reduce the tax liability calculated without                               
05       regard to the limitation to the maximum amount provided for under the applicable                                  
06       provision of AS 43.55.011(j), (k), (o), or (p). Only the amount of those adjusted lease                           
07       expenditures remaining after the accounting provided for under this subsection may be                             
08       used to establish a carried-forward annual loss under AS 43.55.023(b). In this                                    
09       subsection, "producer" includes "explorer."                                                                       
10    * Sec. 40. AS 43.55.160(f) is amended to read:                                                                     
11            (f)  On and after January 1, 2014, in the calculation of an annual production tax                            
12       value of a producer under (a)(1)(A) or (h)(1) [(a)(1)] of this section, the gross value at                    
13       the point of production of oil or gas produced from a lease or property north of 68                               
14       degrees North latitude meeting one or more of the following criteria is reduced by 20                             
15       percent: (1) the oil or gas is produced from a lease or property that does not contain a                          
16       lease that was within a unit on January 1, 2003; (2) the oil or gas is produced from a                            
17       participating area established after December 31, 2011, that is within a unit formed                              
18       under AS 38.05.180(p) before January 1, 2003, if the participating area does not                                  
19       contain a reservoir that had previously been in a participating area established before                           
20       December 31, 2011; (3) the oil or gas is produced from acreage that was added to an                               
21       existing participating area by the Department of Natural Resources on and after                                   
22       January 1, 2014, and the producer demonstrates to the department that the volume of                               
23       oil or gas produced is from acreage added to an existing participating area. This                                 
24       subsection does not apply to gas produced before 2022 that is used in the state or to                         
25       gas produced on and after January 1, 2022. A reduction under this subsection may                              
26       not reduce the gross value at the point of production below zero. In this subsection,                             
27       "participating area" means a reservoir or portion of a reservoir producing or                                     
28       contributing to production as approved by the Department of Natural Resources.                                    
29    * Sec. 41. AS 43.55.160(g) is amended to read:                                                                     
30            (g)  On and after January 1, 2014, in addition to the reduction under (f) of this                            
31       section, in the calculation of an annual production tax value of a producer under                                 
01       (a)(1)(A) or (h)(1) [(a)(1)] of this section, the gross value at the point of production of                   
02       oil or gas produced from a lease or property north of 68 degrees North latitude that                          
03       does not contain a lease that was within a unit on January 1, 2003, is reduced by 10                              
04       percent if the oil or gas is produced from a unit made up solely of leases that have a                            
05       royalty share of more than 12.5 percent in amount or value of the production removed                              
06       or sold from the lease as determined under AS 38.05.180(f). This subsection does not                              
07       apply if the royalty obligation for one or more of the leases in the unit has been                                
08       reduced to 12.5 percent or less under AS 38.05.180(j) for all or part of the calendar                             
09       year for which the annual production tax value is calculated. This subsection does not                            
10       apply to gas produced before 2022 that is used in the state or to gas produced on and                         
11       after January 1, 2022. A reduction under this subsection may not reduce the gross                             
12       value at the point of production below zero.                                                                      
13    * Sec. 42. AS 43.55.160 is amended by adding a new subsection to read:                                             
14            (h)  For oil produced on and after January 1, 2022, except as provided in (b),                               
15       (f), and (g) of this section, for the purposes of AS 43.55.011(e)(3), the annual                                  
16       production tax value of oil taxable under AS 43.55.011(e) produced by a producer                                  
17       during a calendar year                                                                                            
18                 (1)  from leases or properties in the state that include land north of 68                               
19       degrees North latitude is the gross value at the point of production of that oil, less the                        
20       producer's lease expenditures under AS 43.55.165 for the calendar year incurred to                                
21       explore for, develop, or produce oil or gas deposits located in the state north of 68                             
22       degrees North latitude or located in leases or properties in the state that include land                          
23       north of 68 degrees North latitude, as adjusted under AS 43.55.170;                                               
24                 (2)  before or during the last calendar year under AS 43.55.024(b) for                                  
25       which the producer could take a tax credit under AS 43.55.024(a), from leases or                                  
26       properties in the state outside the Cook Inlet sedimentary basin, no part of which is                             
27       north of 68 degrees North latitude, other than leases or properties subject to                                    
28       AS 43.55.011(p), is the gross value at the point of production of that oil, less the                              
29       producer's lease expenditures under AS 43.55.165 for the calendar year incurred to                                
30       explore for, develop, or produce oil or gas deposits located in the state outside the                             
31       Cook Inlet sedimentary basin and south of 68 degrees North latitude, other than oil or                            
01       gas deposits located in a lease or property that includes land north of 68 degrees North                          
02       latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from which                             
03       commercial production has not begun, as adjusted under AS 43.55.170;                                              
04                 (3)  from leases or properties subject to AS 43.55.011(p) is the gross                                  
05       value at the point of production of that oil, less the producer's lease expenditures under                        
06       AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil or                            
07       gas deposits located in leases or properties subject to AS 43.55.011(p) or, before                                
08       January 1, 2027, located in leases or properties in the state outside the Cook Inlet                              
09       sedimentary basin, no part of which is north of 68 degrees North latitude from which                              
10       commercial production has not begun, as adjusted under AS 43.55.170;                                              
11                 (4)  from leases or properties in the state no part of which is north of 68                             
12       degrees North latitude, other than leases or properties subject to (2) or (3) of this                             
13       subsection, is the gross value at the point of production of that oil less the producer's                         
14       lease expenditures under AS 43.55.165 for the calendar year incurred to explore for,                              
15       develop, or produce oil or gas deposits located in the state south of 68 degrees North                            
16       latitude, other than oil or gas deposits located in a lease or property in the state that                         
17       includes land north of 68 degrees North latitude, and excluding lease expenditures that                           
18       are deductible under (2) or (3) of this subsection or would be deductible under (2) or                            
19       (3) of this subsection if not prohibited by (b) of this section, as adjusted under                                
20       AS 43.55.170.                                                                                                     
21    * Sec. 43. AS 43.55.165(e) is amended to read:                                                                   
22            (e)  For purposes of this section, lease expenditures do not include                                         
23                 (1)  depreciation, depletion, or amortization;                                                          
24                 (2)  oil or gas royalty payments, production payments, lease profit                                     
25       shares, or other payments or distributions of a share of oil or gas production, profit, or                        
26       revenue, except that a producer's lease expenditures applicable to oil and gas produced                           
27       from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net                             
28       profit paid to the state under that lease;                                                                        
29                 (3)  taxes based on or measured by net income;                                                          
30                 (4)  interest or other financing charges or costs of raising equity or debt                             
31       capital;                                                                                                          
01                 (5)  acquisition costs for a lease or property or exploration license;                                  
02                 (6)  costs arising from fraud, willful misconduct, gross negligence,                                    
03       violation of law, or failure to comply with an obligation under a lease, permit, or                               
04       license issued by the state or federal government;                                                                
05                 (7)  fines or penalties imposed by law;                                                                 
06                 (8)  costs of arbitration, litigation, or other dispute resolution activities                           
07       that involve the state or concern the rights or obligations among owners of interests in,                         
08       or rights to production from, one or more leases or properties or a unit;                                         
09                 (9)  costs incurred in organizing a partnership, joint venture, or other                                
10       business entity or arrangement;                                                                                   
11                 (10)  amounts paid to indemnify the state; the exclusion provided by                                    
12       this paragraph does not apply to the costs of obtaining insurance or a surety bond from                           
13       a third-party insurer or surety;                                                                                  
14                 (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                
15                 (12)  an expenditure otherwise deductible under (b) of this section that                                
16       is a result of an internal transfer, a transaction with an affiliate, or a transaction                            
17       between related parties, or is otherwise not an arm's length transaction, unless the                              
18       producer establishes to the satisfaction of the department that the amount of the                                 
19       expenditure does not exceed the fair market value of the expenditure;                                             
20                 (13)  an expenditure incurred to purchase an interest in any corporation,                               
21       partnership, limited liability company, business trust, or any other business entity,                             
22       whether or not the transaction is treated as an asset sale for federal income tax                                 
23       purposes;                                                                                                         
24                 (14)  a tax levied under AS 43.55.011 or 43.55.014;                                                 
25                 (15)  costs incurred for dismantlement, removal, surrender, or                                          
26       abandonment of a facility, pipeline, well pad, platform, or other structure, or for the                           
27       restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in                       
28       conjunction with dismantlement, removal, surrender, or abandonment; a cost is not                                 
29       excluded under this paragraph if the dismantlement, removal, surrender, or                                        
30       abandonment for which the cost is incurred is undertaken for the purpose of replacing,                            
31       renovating, or improving the facility, pipeline, well pad, platform, or other structure;                          
01                 (16)  costs incurred for containment, control, cleanup, or removal in                                   
02       connection with any unpermitted release of oil or a hazardous substance and any                                   
03       liability for damages imposed on the producer or explorer for that unpermitted release;                           
04       this paragraph does not apply to the cost of developing and maintaining an oil                                    
05       discharge prevention and contingency plan under AS 46.04.030;                                                     
06                 (17)  costs incurred to satisfy a work commitment under an exploration                                  
07       license under AS 38.05.132;                                                                                       
08                 (18)  that portion of expenditures, that would otherwise be qualified                                   
09       capital expenditures, as defined in AS 43.55.023, incurred during a calendar year that                            
10       are less than the product of $0.30 multiplied by the total taxable production from each                           
11       lease or property, in BTU equivalent barrels, during that calendar year, except that,                             
12       when a portion of a calendar year is subject to this provision, the expenditures and                              
13       volumes shall be prorated within that calendar year;                                                              
14                 (19)  costs incurred for repair, replacement, or deferred maintenance of                                
15       a facility, a pipeline, a structure, or equipment, other than a well, that results in or is                       
16       undertaken in response to a failure, problem, or event that results in an unscheduled                             
17       interruption of, or reduction in the rate of, oil or gas production; or costs incurred for                        
18       repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or                           
19       equipment, other than a well, that is undertaken in response to, or is otherwise                                  
20       associated with, an unpermitted release of a hazardous substance or of gas; however,                              
21       costs under this paragraph that would otherwise constitute lease expenditures under (a)                           
22       and (b) of this section may be treated as lease expenditures if the department                                    
23       determines that the repair or replacement is solely necessitated by an act of war, by an                          
24       unanticipated grave natural disaster or other natural phenomenon of an exceptional,                               
25       inevitable, and irresistible character, the effects of which could not have been                                  
26       prevented or avoided by the exercise of due care or foresight, or by an intentional or                            
27       negligent act or omission of a third party, other than a party or its agents in privity of                        
28       contract with, or employed by, the producer or an operator acting for the producer, but                           
29       only if the producer or operator, as applicable, exercised due care in operating and                              
30       maintaining the facility, pipeline, structure, or equipment, and took reasonable                                  
31       precautions against the act or omission of the third party and against the consequences                           
01       of the act or omission; in this paragraph,                                                                        
02                      (A)  "costs incurred for repair, replacement, or deferred                                          
03            maintenance of a facility, a pipeline, a structure, or equipment" includes costs                             
04            to dismantle and remove the facility, pipeline, structure, or equipment that is                              
05            being replaced;                                                                                              
06                      (B)  "hazardous substance" has the meaning given in                                                
07            AS 46.03.826;                                                                                                
08                      (C)  "replacement" includes renovation or improvement;                                             
09                 (20)  costs incurred to construct, acquire, or operate a refinery or crude                              
10       oil topping plant, regardless of whether the products of the refinery or topping plant                            
11       are used in oil or gas exploration, development, or production operations; however, if                            
12       a producer owns a refinery or crude oil topping plant that is located on or near the                              
13       premises of the producer's lease or property in the state and that processes the                                  
14       producer's oil produced from that lease or property into a product that the producer                              
15       uses in the operation of the lease or property in drilling for or producing oil or gas, the                       
16       producer's lease expenditures include the amount calculated by subtracting from the                               
17       fair market value of the product used the prevailing value, as determined under                                   
18       AS 43.55.020(f), of the oil that is processed;                                                                    
19                 (21)  costs of lobbying, public relations, public relations advertising, or                             
20       policy advocacy.                                                                                                  
21    * Sec. 44. AS 43.55.900(10) is amended to read:                                                                    
22                 (10)  "gas processing plant" means a facility that                                                      
23                      (A)  extracts and recovers liquid hydrocarbons from a gaseous                                      
24            mixture of hydrocarbons by gas processing; and                                                               
25                      (B)  is located upstream of the inlet of any pipeline                                      
26            transporting gas to a gas treatment plant and upstream of the inlet of any gas                       
27            pipeline system transporting gas to a market;                                                                
28    * Sec. 45. AS 43.55.900(20) is amended to read:                                                                    
29                 (20)  "point of production" means                                                                       
30                      (A)  for oil, the automatic custody transfer meter or device                                       
31            through which the oil enters into the facilities of a carrier pipeline or other                              
01            transportation carrier in a condition of pipeline quality; in the absence of an                              
02            automatic custody transfer meter or device, "point of production" means the                                  
03            mechanism or device to measure the quantity of oil that has been approved by                                 
04            the department for that purpose, through which the oil is tendered and accepted                              
05            in a condition of pipeline quality into the facilities of a carrier pipeline or other                        
06            transportation carrier or into a field topping plant;                                                        
07                      (B)  for gas [, OTHER THAN GAS DESCRIBED IN (C) OF                                                 
08            THIS PARAGRAPH,] that is                                                                                     
09                           (i)  not subjected to or recovered by mechanical                                              
10                 separation or run through a gas processing plant, the furthest                                      
11                 upstream of the first point where the gas is accurately metered, the                            
12                 inlet of any pipeline transporting the gas to a gas treatment plant,                              
13                 or the inlet of any gas pipeline system transporting gas to a market;                               
14                           (ii)  subjected to or recovered by mechanical separation                                      
15                 but not run through a gas processing plant, the furthest upstream of                                
16                 the first point where the gas is accurately metered after completion of                             
17                 mechanical separation, the inlet of any pipeline transporting the gas                             
18                 to a gas treatment plant, or the inlet of any gas pipeline system                                   
19                 transporting gas to a market;                                                                       
20                           (iii)  run through a gas processing plant, the furthest                                   
21                 upstream of the first point where the gas is accurately metered                                     
22                 downstream of the plant, the inlet of any pipeline transporting the                                 
23                 gas to a gas treatment plant, or the inlet of any gas pipeline system                               
24                 transporting gas to a market;                                                                       
25                      [(C)  FOR GAS RUN THROUGH AN INTEGRATED GAS                                                        
26            PROCESSING PLANT AND GAS TREATMENT FACILITY THAT DOES                                                        
27            NOT ACCURATELY METER THE GAS AFTER THE GAS PROCESSING                                                        
28            AND BEFORE THE GAS TREATMENT, THE FIRST POINT WHERE GAS                                                      
29            PROCESSING IS COMPLETED OR WHERE GAS TREATMENT BEGINS,                                                       
30            WHICHEVER IS FURTHER UPSTREAM;]                                                                              
31    * Sec. 46. AS 43.55.900 is amended by adding a new paragraph to read:                                              
01                 (25)  "gas treatment plant" means a facility that performs gas treatment,                               
02       regardless of whether the facility also performs gas processing.                                                  
03    * Sec. 47. AS 43.98.030(c) is amended to read:                                                                     
04            (c)  A taxpayer acquiring a transferable tax credit certificate may use the credit                           
05       or a portion of the credit to offset taxes imposed under AS 21.09.210, AS 21.66.110,                              
06       AS 43.20, AS 43.55.011 [AS 43.55], AS 43.56, AS 43.65, AS 43.75, and AS 43.77.                                
07       Except as provided in (e) of this section, any portion of the credit not used may be                              
08       used at a later period or transferred under (b) of this section.                                                  
09    * Sec. 48. The uncodified law of the State of Alaska is amended by adding a new section to                         
10 read:                                                                                                                   
11       TRANSITION: REGULATIONS. The Department of Revenue and the Department of                                          
12 Natural Resources may adopt regulations to implement this Act. The regulations take effect                              
13 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the                                 
14 provisions of this Act being implemented.                                                                               
15    * Sec. 49. The uncodified law of the State of Alaska is amended by adding a new section to                         
16 read:                                                                                                                   
17       REVISOR'S INSTRUCTION. The revisor of statutes is instructed to change the catch                                  
18 line of AS 38.05.183 from "Sale of royalty" to "Sale of royalty and of gas delivered to the                             
19 state under AS 43.55.014(b)."                                                                                           
20    * Sec. 50. Sections 1 - 10, 12, 13, 19, 20, 22, 23, 30, 31, 47, and 48 of this Act take effect                     
21 immediately under AS 01.10.070(c).                                                                                      
22    * Sec. 51. Except as provided in sec. 50 of this Act, this Act takes effect January 1, 2015.