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CSSB 138(RES): "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 gas production tax in gas; relating to the sale, exchange, or disposal of gas delivered to the state under an election to pay the gas production tax in gas; relating to the tax on oil production; relating to the tax on gas production; relating to the duties of the commissioner of revenue to direct the disposition of revenues received from gas delivered to the state and to consult with the commissioner of natural resources on the custody and disposition of gas delivered to the state; 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 gas production tax in gas exempt from tax confidentiality provisions; relating to establishing under the oil and gas production tax a gross tax rate for the production of 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 gas production tax in gas 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 levy of the gas production tax for gas paid in gas for purposes of the exploration incentive credit, the oil or gas producer education credit, and the film production tax credit; requiring the commissioner of revenue to develop a plan and suggest legislation for residents of the state to acquire ownership interests in a North Slope natural gas pipeline project; making conforming amendments; and providing for an effective date."

00                       CS FOR SENATE BILL NO. 138(RES)                                                                   
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 gas production tax in gas; relating to the sale, exchange, or disposal of gas                                
10 delivered to the state under an election to pay the gas production tax in gas; relating to                              
11 the tax on oil production; relating to the tax on gas production; relating to the duties of                             
12 the commissioner of revenue to direct the disposition of revenues received from gas                                     
01 delivered to the state and to consult with the commissioner of natural resources on the                                 
02 custody and disposition of gas delivered to the state; relating to the authority of the                                 
03 commissioner of natural resources to propose modifications to existing state oil and gas                                
04 leases; making certain information provided to the Department of Natural Resources                                      
05 and the Department of Revenue exempt from inspection as a public record; making                                         
06 certain tax information related to an election to pay the gas production tax in gas                                     
07 exempt from tax confidentiality provisions; relating to establishing under the oil and gas                              
08 production tax a gross tax rate for the production of gas after 2021; making the                                        
09 alternate minimum tax on oil and gas produced north of 68 degrees North latitude after                                  
10 2021 apply only to oil; relating to apportionment factors of the Alaska Net Income Tax                                  
11 Act; authorizing a producer's election to pay the gas production tax in gas for certain                                 
12 gas and relating to the authorization; relating to monthly installment payments of the oil                              
13 and gas production tax; relating to interest payments on monthly installment payments                                   
14 of the oil and gas production tax; relating to settlements between producers and royalty                                
15 owners for oil and gas production tax; relating to annual statements by producers and                                   
16 explorers; relating to annual production tax values; relating to lease expenditures;                                    
17 amending the definition of gross value at the 'point of production' for gas for purposes                                
18 of the oil and gas production tax; adding definitions related to natural gas terms;                                     
19 clarifying that credit may not be taken against the levy of the gas production tax for gas                              
20 paid in gas for purposes of the exploration incentive credit, the oil or gas producer                                   
21 education credit, and the film production tax credit; requiring the commissioner of                                     
22 revenue to develop a plan and suggest legislation for residents of the state to acquire                                 
23 ownership interests in a North Slope natural gas pipeline project; making conforming                                    
24 amendments; and providing for an effective date."                                                                       
01 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
02    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
03 to read:                                                                                                                
04       LEGISLATIVE FINDINGS AND INTENT. (a) The legislature finds that                                                   
05            (1)  the future oil and gas development in the state is of vital public interest,                            
06 particularly the commercial development of the gas deposits from the North Slope; that                                  
07 development will include major infrastructure components including a natural gas pipeline,                              
08 associated infrastructure, a gas treatment facility, a liquefaction facility, and a marine                              
09 terminal;                                                                                                               
10            (2)  much of the infrastructure required for commercial development of North                                 
11 Slope natural gas will be within the boundaries of local governmental entities located within                           
12 or along the natural gas pipeline route and at the pipeline terminus at tidewater;                                      
13            (3)  the development of North Slope natural gas will provide benefits to the                                 
14 state including employment opportunities, royalty and tax revenues, including tax revenue                               
15 under AS 43.56 (Oil and Gas Exploration, Production, and Pipeline Transportation Property                               
16 Taxes), and could provide delivery of natural gas to communities along the natural gas                                  
17 pipeline route from the North Slope to a terminus point with liquefaction and marine terminal                           
18 facilities;                                                                                                             
19            (4)  the commissioner of natural resources will be authorized, through this                                  
20 legislation, to enter short term commercial agreements and to negotiate with the developers                             
21 and other parties in order to secure the state's participation through contracts, which will be                         
22 presented to the legislature for authorization;                                                                         
23            (5)  the interests of the State and local governmental entities must be                                      
24 considered in contract negotiations to protect the financial and other interests of the state and                       
25 those local governmental entities.                                                                                      
26       (b)  It is therefore the intent of the legislature to provide the commissioner of natural                         
27 resources with the authority necessary to enter short term commercial agreements and                                    
28 negotiate contracts and develop terms for inclusion in proposed contracts, subject to                                   
29 legislative approval, associated with a North Slope natural gas project and that the                                    
30 commissioner of natural resources, in those negotiations, consider and suggest for                                      
31 incorporation into contracts terms for state participation in a North Slope natural gas project                         
01 that include                                                                                                            
02            (1)  subject to confidentiality agreements, provisions for reasonable disclosure                             
03 of information related to the state's interest in a North Slope natural gas project including                           
04 liquefaction, to representatives of the state administration when those representatives are                             
05 acting in a proprietary capacity;                                                                                       
06            (2)  access and pro-expansion principles, opportunities for delivery of gas to                               
07 Alaskans, payments in lieu of property taxes on a unit rate per throughput basis, and serial                            
08 impact payments to be paid by the developers of a North Slope natural gas project to help                               
09 offset increased services and other costs borne by the state and local governments;                                     
10            (3)  to the maximum extent permitted by law, seek to negotiate separately with                               
11 producers of North Slope gas regarding the purchase or other disposition of liquefied natural                           
12 gas made from the state's share of natural gas delivered to a liquefaction facility in the state;                       
13            (4)  to the maximum extent permitted by law, contract provisions for project                                 
14 labor agreements, employment of Alaska residents, contracts with Alaska businesses, and                                 
15 provisions to work with state job centers, associated services and job training services.                               
16    * Sec. 2. AS 31.25.005 is amended to read:                                                                         
17            Sec. 31.25.005. Purpose. The corporation shall, for the benefit of the state, to                           
18       the fullest extent possible,                                                                                      
19                 (1)  advance an in-state natural gas pipeline as described in the July 1,                               
20       2011, project plan prepared under former AS 38.34.040 by the corporation while a                                  
21       subsidiary of the Alaska Housing Finance Corporation, with modifications determined                               
22       by the corporation to be appropriate to develop, finance, construct, and operate an in-                           
23       state natural gas pipeline in a safe, prudent, economical, and efficient manner, for the                          
24       purpose of making natural gas, including propane and other hydrocarbons associated                                
25       with natural gas other than oil, available to Fairbanks, the Southcentral region of the                           
26       state, and other communities in the state at the lowest rates possible;                                           
27                 (2)  endeavor to develop natural gas pipelines and other transportation                                 
28       mechanisms to deliver natural gas, including propane and other hydrocarbons                                       
29       associated with natural gas other than oil, to public utility and industrial customers in                         
30       areas of the state to which the natural gas, including propane and other hydrocarbons                             
31       associated with natural gas other than oil, may be delivered at commercially                                      
01       reasonable rates; and                                                                                             
02                 (3)  endeavor to develop natural gas pipelines and other transportation                                 
03       mechanisms that offer commercially reasonable rates for shippers and access for                                   
04       shippers who produce natural gas, including propane and other hydrocarbons                                        
05       associated with natural gas other than oil, in the state;                                                     
06                 (4)  advance to develop a large-diameter natural gas pipeline                                     
07       project other than the in-state natural gas pipeline described in (1) of this section                         
08       by acquiring an equity interest in a large-diameter natural gas pipeline project                              
09       through the subsidiary under AS 31.25.122;                                                                    
10                 (5)  advance to develop, finance, construct, and operate facilities                                 
11       for liquefaction and treatment in connection with a large-diameter natural gas                                
12       pipeline project other than the in-state natural gas pipeline described in (1) of                             
13       this section through the subsidiary under AS 31.25.122.                                                       
14    * Sec. 3. AS 31.25.010 is amended to read:                                                                         
15            Sec. 31.25.010. Structure. The Alaska Gasline Development Corporation is a                                 
16       public corporation and government instrumentality located for administrative purposes                             
17       in the Department of Commerce, Community, and Economic Development, but                                           
18       having a legal existence independent of and separate from the state. The corporation                              
19       may not be terminated as long as it has bonds, notes, or other obligations outstanding.                           
20       The corporation may dissolve when no bonds, notes, or other obligations of the                                    
21       corporation or a subsidiary of the corporation are outstanding and the corporation or a                           
22       subsidiary of the corporation is no longer engaged in the development, financing,                                 
23       construction, or operation of an in-state natural gas pipeline or a large-diameter                            
24       natural gas pipeline project. Upon termination of the corporation, its rights and                             
25       property pass to the state.                                                                                       
26    * Sec. 4. AS 31.25.080(f) is amended to read:                                                                      
27            (f)  The corporation shall, to the maximum extent practicable without delaying                               
28       the progress of developing the [AN] in-state natural gas pipeline project described in                    
29       AS 31.25.005(1) and without causing the in-state natural gas pipeline project                                 
30       described in AS 31.25.005(1) to become a competing natural gas pipeline project for                           
31       purposes of AS 43.90.440, coordinate with and accommodate the developers of a                                     
01       large-diameter [IN-STATE] natural gas pipeline project by planning for the                                    
02       development and use of [COMMON] pipeline facilities from the North Slope to [THE                                  
03       LIVENGOOD AREA OR TO ANOTHER POINT FROM WHICH A LARGE-                                                            
04       DIAMETER IN-STATE NATURAL GAS PIPELINE MAY BE CONSTRUCTED                                                         
05       SOUTH TO] tidewater in either the Prince William Sound or Cook Inlet area. The                                
06       corporation may use money appropriated to the large-diameter natural gas                                      
07       pipeline project fund created in AS 31.25.110 for the purposes described in this                              
08       subsection and may not use money appropriated to the in-state natural gas                                     
09       pipeline fund created in AS 31.25.100 for the purposes described in this                                      
10       subsection [IN THIS SUBSECTION, "LARGE-DIAMETER IN-STATE NATURAL                                              
11       GAS PIPELINE" MEANS A PIPELINE IN THE STATE WITH A DIAMETER OF                                                    
12       42 INCHES OR MORE].                                                                                               
13    * Sec. 5. AS 31.25.100 is amended to read:                                                                         
14            Sec. 31.25.100. In-state natural gas pipeline fund. The in-state natural gas                               
15       pipeline fund is established in the corporation and consists of money appropriated to                             
16       it. The corporation shall determine fund management and may contract with the                                     
17       Department of Revenue for fund management. Unless otherwise provided by law,                                      
18       money appropriated to the fund lapses into the general fund on the day this section is                            
19       repealed. Interest and other income received on money in the fund shall be separately                             
20       accounted for and may be appropriated to the fund. The corporation may use money                                  
21       appropriated to the fund without further appropriation solely for the cost of managing                        
22       the fund and for the planning, financing, development, acquisition, maintenance,                                  
23       construction, and operation of the [AN] in-state natural gas pipeline described in                        
24       AS 31.25.005(1) and may not use money appropriated to the fund for any other                                  
25       purpose, including the purposes described in AS 31.25.005(4) and (5) and                                      
26       31.25.080(f).                                                                                                 
27    * Sec. 6. AS 31.25 is amended by adding a new section to read:                                                     
28            Sec. 31.25.110. Large-diameter natural gas pipeline project fund. The                                      
29       large-diameter natural gas pipeline project fund is established in the subsidiary and                             
30       consists of money appropriated to it. The subsidiary shall determine fund management                              
31       and may contract with the Department of Revenue for fund management. Interest and                                 
01       other income received on money in the fund shall be separately accounted for and may                              
02       be appropriated to the fund. The subsidiary may use money appropriated to the fund                                
03       without further appropriation for the purpose of managing the fund and for the                                    
04       planning, financing, acquisition, maintenance, construction, and operation of a large-                            
05       diameter natural gas pipeline project, including treatment and liquefaction facilities,                           
06       and may not use the money appropriated to the fund for the purpose described in                                   
07       AS 31.25.005(1). If money is appropriated to the fund to finance the cost of a large-                             
08       diameter natural gas pipeline project described in AS 31.25.005(4) and (5), the                                   
09       subsidiary shall create an account in the fund for that purpose and shall hold the                                
10       money appropriated for that purpose in that account. In this section, "subsidiary"                                
11       means a subsidiary established under AS 31.25.122.                                                                
12    * Sec. 7. AS 31.25.120 is amended to read:                                                                         
13            Sec. 31.25.120. Creation of subsidiaries for an in-state natural gas pipeline                            
14       project. The corporation may create subsidiary corporations for the purpose of                                
15       developing, constructing, operating, and financing in-state natural gas pipeline                                  
16       projects or other transportation mechanisms; for the purpose of aiding in the                                     
17       development, construction, operation, and financing of in-state natural gas pipeline                              
18       projects; or for the purpose of acquiring the state's royalty share of natural gas, natural                       
19       gas from the North Slope, and natural gas from other regions of the state, including the                          
20       state's outer continental shelf, and making that natural gas available to markets in the                          
21       state, including the delivery of natural gas, including propane and other hydrocarbons                            
22       associated with natural gas other than oil, to coastal communities in the state, or for                           
23       export. A subsidiary corporation created under this section may be incorporated under                             
24       AS 10.20.146 - 10.20.166. Except as provided in AS 31.25.110, the [THE]                                       
25       corporation may transfer assets of the corporation to a subsidiary created under this                             
26       section. A subsidiary created under this section may borrow money and issue bonds as                              
27       evidence of that borrowing and has all the powers of the corporation that the                                     
28       corporation grants to it. Unless otherwise provided by the corporation, the debts,                                
29       liabilities, and obligations of a subsidiary corporation created under this section are not                       
30       the debts, liabilities, or obligations of the corporation. A subsidiary corporation                           
31       created under this section may use money appropriated under AS 31.25.100 and                                  
01       may not use money appropriated under AS 31.25.110.                                                            
02    * Sec. 8. AS 31.25 is amended by adding a new section to read:                                                     
03            Sec. 31.25.122. Creation of a subsidiary for a large-diameter natural gas                                  
04       pipeline project. (a) To maximize the economic recovery and value of the state's                                
05       natural gas royalties and gas tax revenues for the benefit of the people of the state, a                          
06       subsidiary of the corporation is established as a public corporation and government                               
07       instrumentality for administrative purposes of the corporation, but having a legal                                
08       existence independent of and separate from the state and the corporation, for the                                 
09       purposes of acquiring a state equity interest in a large-diameter natural gas pipeline                            
10       project, in natural gas treatment facilities, in liquefaction facilities, and in marine                           
11       terminal facilities related to a large-diameter natural gas project, and in entities that are                     
12       developing, constructing, and operating such facilities; for the purposes of financing                            
13       the acquisition, capital costs and operating costs related to the state equity interests;                         
14       for the purposes of supporting in the development, construction, operation, and                                   
15       financing a large-diameter natural gas pipeline project in which the subsidiary has an                            
16       equity interest; and for the purposes of transferring net revenues received by the                                
17       subsidiary related to equity interests acquired to the permanent fund and the general                             
18       fund as determined by the commissioner of natural resources in consultation with the                              
19       commissioner of revenue. The subsidiary created under this section may use money                                  
20       appropriated under AS 31.25.110 and may not use money appropriated under                                          
21       AS 31.25.100.                                                                                                     
22            (b)  The subsidiary created under this section shall be governed by a board of                               
23       directors consisting of                                                                                           
24                 (1)  the chair of the corporation;                                                                      
25                 (2)  the commissioner of natural resources;                                                             
26                 (3)  the commissioner of revenue; and                                                                   
27                 (4)  four public members, one of whom is a public member of the board                                   
28       of directors under AS 31.25.030(a)(1).                                                                            
29            (c)  Public members of the subsidiary board shall be appointed by the                                        
30       governor. Subsidiary board members appointed under (b)(4) of this section shall be                                
31       compensated as provided in AS 31.25.020(d). Public members of the subsidiary                                      
01       board serve five-year terms. A public member serves at the pleasure of the                                        
02       governor. The provisions of AS 31.25.030, 31.25.035, and 31.25.040 apply to the                                   
03       board of the subsidiary.                                                                                          
04            (d)  In addition to other powers granted in this section, the subsidiary may                                 
05                 (1)  determine the form of ownership and the operating structure of a                                   
06       large-diameter natural gas pipeline project developed by the subsidiary and may enter                             
07       into agreements with other persons for joint ownership, joint operation, or both, of a                            
08       large-diameter natural gas pipeline project;                                                                      
09                 (2)  plan, finance, construct, develop, acquire, maintain, and operate a                                
10       pipeline system and other transportation mechanism, including pipelines, treatment                                
11       and liquefaction facilities, marine terminals, compressors, storage facilities, and other                       
12       related facilities, equipment, and works of public improvement in the state to facilitate                         
13       production, transportation, and delivery of natural gas or other related natural                                  
14       resources to the point of consumption or to the point of distribution for consumption;                            
15                 (3)  lease or rent facilities, structures, and properties;                                              
16                 (4)  exercise the power of eminent domain and file a declaration of                                     
17       taking under AS 09.55.240 - 09.55.460 to acquire land or an interest in land that is                              
18       necessary for a large-diameter natural gas pipeline project; the exercise of powers by                            
19       the subsidiary under this paragraph may not exceed the permissible exercise of the                                
20       powers by the state;                                                                                              
21                 (5)  acquire, by purchase, lease, or gift, land, structures, real or personal                           
22       property, an interest in property, a right-of-way, a franchise, an easement, or other                             
23       interest in land, or an interest in or right to capacity in a pipeline system determined to                       
24       be necessary or convenient for the development, financing, construction, or operation                             
25       of a large-diameter natural gas pipeline project;                                                                 
26                 (6)  transfer or otherwise dispose of all or part of a large-diameter                                   
27       natural gas pipeline project developed by the subsidiary or transfer or otherwise                             
28       dispose of an interest in an asset of the subsidiary;                                                             
29                 (7)  elect to provide transportation of natural gas as a contract carrier,                              
30       common carrier, or otherwise;                                                                                     
31                 (8)  provide light, water, security, and other services for property of the                             
01       subsidiary;                                                                                                       
02                 (9)  conduct hearings to gather and develop data consistent with the                                    
03       purpose and powers of the subsidiary;                                                                             
04                 (10)  advocate for new capacity in the project before regulatory                                        
05       agencies;                                                                                                         
06                 (11)  make and execute agreements, contracts, and other instruments                                     
07       necessary or convenient in the exercise of the powers and functions of the subsidiary                           
08       under this section, including a contract with a person, firm, corporation, governmental                           
09       agency, or other entity;                                                                                          
10                 (12)  sue and be sued in its own name;                                                                  
11                 (13)  adopt an official seal;                                                                           
12                 (14)  adopt bylaws for the regulation of its affairs and the conduct of its                             
13       business and adopt regulations and policies in connection with the performance of its                             
14       functions and duties;                                                                                             
15                 (15)  employ fiscal consultants, engineers, attorneys, appraisers, and                                  
16       other consultants and employees that may, in the judgment of the subsidiary, be                                   
17       required and fix and pay their compensation from funds available to the subsidiary;                               
18                 (16)  procure insurance against a loss in connection with its operation;                                
19                 (17)  borrow money as provided in this chapter to carry out its                                         
20       corporate purposes and issue its obligations as evidence of borrowing;                                            
21                 (18)  include in a borrowing the amounts necessary to pay financing                                     
22       charges, to pay interest on the obligations, and to pay the interest, consultant, advisory,                       
23       and legal fees, and other expenses that are necessary or incident to the borrowing;                               
24                 (19)  receive, administer, and comply with the conditions and                                           
25       requirements of an appropriation, gift, grant, or donation of property or money;                                  
26                 (20)  do all acts and things necessary, convenient, or desirable to carry                               
27       out the powers expressly granted or necessarily implied in this section;                                          
28                 (21)  invest or reinvest, subject to its contracts with noteholders and                                 
29       bondholders, money or funds held by the subsidiary, including funds in the large-                                 
30       diameter natural gas project pipeline fund (AS 31.25.110), in obligations or other                            
31       securities or investments in which banks or trust companies in the state may legally                              
01       invest funds held in reserves or sinking funds or funds not required for immediate                                
02       disbursement, and in certificates of deposit or time deposits secured by obligations of,                          
03       or guaranteed by, the state or the United States;                                                                 
04                 (22)  enter into, as it determines to be necessary or appropriate, any                                  
05       swap or hedge, cap, or other contract providing for payments based on levels of or                                
06       changes in interest rates or indices or in the cost or price of any commodity, supply, or                         
07       expense expected to be used or incurred in connection with the acquisition,                                       
08       construction, or operation of any facility or property owned, leased, or operated by the                          
09       subsidiary, or an option with respect to any of the foregoing.                                                    
10            (e)  Except as provided in AS 31.25.100, the corporation may transfer assets to                              
11       the subsidiary. The provisions of AS 31.25.090, 31.25.130, 31.25.140, 31.25.160,                                  
12       31.25.170, 31.25.180, 31.25.190, 31.25.200, 31.25.210, 31.25.220, 31.25.230,                                      
13       31.25.240, 31.25.250, 31.25.260, 31.25.270, and 31.25.390 apply to the subsidiary                                 
14       created under this section for a large-diameter natural gas pipeline project, and                                 
15       references in those sections to                                                                                   
16                 (1)  "the corporation" shall refer to the subsidiary created under this                                 
17       section; and                                                                                                      
18                 (2)  "in-state natural gas pipeline" shall refer to a large-diameter natural                            
19       gas pipeline project as described in AS 31.25.005(4) and (5).                                                     
20            (f)  The subsidiary under this section shall employ a project coordinator, who                               
21       may not be a member of the board. The project coordinator shall be appointed by the                               
22       subsidiary board and serves at the pleasure of the subsidiary board. The subsidiary                               
23       board may engage professional and technical advisers as independent contractors. The                              
24       project coordinator may hire employees for the subsidiary and engage professional and                             
25       technical advisers as independent contractors upon approval of the subsidiary board.                              
26       Employees of the subsidiary created under this section are state employees in the                                 
27       exempt service under AS 39.25.110. The subsidiary board shall prescribe the duties                                
28       and compensation of subsidiary personnel, including the project coordinator.                                      
29            (g)  The subsidiary may not be terminated as long as it has bonds, notes, or                                 
30       other obligations outstanding. Upon termination of the subsidiary, its rights and                                 
31       property pass to the state.                                                                                       
01    * Sec. 9. AS 31.25.390(5) is amended to read:                                                                      
02                 (5)  "in-state natural gas pipeline" means a natural gas pipeline for                                   
03       transporting natural gas in the state as described in AS 31.25.005(1);                                        
04    * Sec. 10. AS 31.25.390 is amended by adding new paragraphs to read:                                             
05                 (7)  "large-diameter natural gas pipeline project" means a natural gas                                  
06       pipeline project as described in AS 31.25.005(4) and (5) that includes facilities for                             
07       treatment and liquefaction of natural gas, including any marine terminal facilities;                              
08                 (8)  "subsidiary board" means the governing board of a subsidiary                                       
09       created under AS 31.25.122.                                                                                       
10    * Sec. 11. AS 38.05.020(b) is amended to read:                                                                     
11            (b)  The commissioner may                                                                                    
12                 (1)  establish reasonable procedures and adopt reasonable regulations                                   
13       necessary to carry out this chapter and, whenever necessary, issue directives or orders                           
14       to the director to carry out specific functions and duties; regulations adopted by the                            
15       commissioner shall be adopted under AS 44.62 (Administrative Procedure Act);                                      
16       orders by the commissioner classifying land, issued after January 3, 1959, are not                                
17       required to be adopted under AS 44.62 (Administrative Procedure Act);                                             
18                 (2)  enter into agreements considered necessary to carry out the                                        
19       purposes of this chapter, including agreements with federal and state agencies;                                   
20                 (3)  review any order or action of the director;                                                        
21                 (4)  exercise the powers and do the acts necessary to carry out the                                     
22       provisions and objectives of this chapter;                                                                        
23                 (5)  notwithstanding the provisions of any other section of this chapter,                               
24       grant an extension of the time within which payments due on any exploration license,                              
25       lease, or sale of state land, minerals, or materials may be made, including payment of                            
26       rental and royalties, on a finding that compliance with the requirements is or was                                
27       prevented by reason of war, riots, or acts of God;                                                                
28                 (6)  classify tracts for agricultural uses;                                                             
29                 (7)  after consulting with the Board of Agriculture and Conservation                                    
30       (AS 03.09.010), waive, postpone, or otherwise modify the development requirements                                 
31       of a contract for the sale of agricultural land if                                                                
01                      (A)  the land is inaccessible by road; or                                                          
02                      (B)  transportation, marketing, and development costs render                                       
03            the required development uneconomic;                                                                         
04                 (8)  reconvey or relinquish land or an interest in land to the federal                                  
05       government if                                                                                                     
06                      (A)  the land is described in an amended application for an                                        
07            allotment under 43 U.S.C. 1617; and                                                                          
08                      (B)  the reconveyance or relinquishment is                                                         
09                           (i)  for the purposes provided in 43 U.S.C. 1617; and                                         
10                           (ii)  in the best interests of the state;                                                     
11                 (9)  lead and coordinate all matters relating to the state's review and                                 
12       authorization of resource development projects;                                                                   
13                 (10)  enter into commercial agreements with a duration of not more                                  
14       than two years for project services related to a North Slope natural gas project;                             
15                 (11)  in consultation with the commissioner of revenue, participate                                 
16       in the negotiation of contracts and development of terms for inclusion in                                     
17       proposed contracts associated with a North Slope natural gas project; a contract                              
18       negotiated under this paragraph to which the state is a party is not effective                                
19       unless the legislature authorizes the governor to execute the contract;                                       
20                 (12)  enter into confidentiality agreements to maintain the                                         
21       confidentiality of information related to contract negotiations and contract                                  
22       implementation associated with a North Slope natural gas project; information                                 
23       under those confidentiality agreements is not subject to AS 40.25 (Alaska Public                              
24       Records Act), except that                                                                                     
25                      (A)  the terms of a proposed contract that the commissioner                                    
26            presents to the legislature for the purpose of obtaining authorization for                               
27            the governor to execute is not confidential; and                                                         
28                      (B)  confidential information obtained under this paragraph                                    
29            shall be shared with the legislature only in committees held in executive                                
30            session or under confidentiality agreements;                                                             
31                 (13)  exercise the powers and do the acts necessary to carry out the                                
01       provisions and objectives of AS 43.90 that relate to this chapter.                                                
02    * Sec. 12. AS 38.05.020(b), as amended by sec. 11 of this Act, is amended to read:                                 
03            (b)  The commissioner may                                                                                    
04                 (1)  establish reasonable procedures and adopt reasonable regulations                                   
05       necessary to carry out this chapter and, whenever necessary, issue directives or orders                           
06       to the director to carry out specific functions and duties; regulations adopted by the                            
07       commissioner shall be adopted under AS 44.62 (Administrative Procedure Act);                                      
08       orders by the commissioner classifying land, issued after January 3, 1959, are not                                
09       required to be adopted under AS 44.62 (Administrative Procedure Act);                                             
10                 (2)  enter into agreements considered necessary to carry out the                                        
11       purposes of this chapter, including agreements with federal and state agencies;                                   
12                 (3)  review any order or action of the director;                                                        
13                 (4)  exercise the powers and do the acts necessary to carry out the                                     
14       provisions and objectives of this chapter;                                                                        
15                 (5)  notwithstanding the provisions of any other section of this chapter,                               
16       grant an extension of the time within which payments due on any exploration license,                              
17       lease, or sale of state land, minerals, or materials may be made, including payment of                            
18       rental and royalties, on a finding that compliance with the requirements is or was                                
19       prevented by reason of war, riots, or acts of God;                                                                
20                 (6)  classify tracts for agricultural uses;                                                             
21                 (7)  after consulting with the Board of Agriculture and Conservation                                    
22       (AS 03.09.010), waive, postpone, or otherwise modify the development requirements                                 
23       of a contract for the sale of agricultural land if                                                                
24                      (A)  the land is inaccessible by road; or                                                          
25                      (B)  transportation, marketing, and development costs render                                       
26            the required development uneconomic;                                                                         
27                 (8)  reconvey or relinquish land or an interest in land to the federal                                  
28       government if                                                                                                     
29                      (A)  the land is described in an amended application for an                                        
30            allotment under 43 U.S.C. 1617; and                                                                          
31                      (B)  the reconveyance or relinquishment is                                                         
01                           (i)  for the purposes provided in 43 U.S.C. 1617; and                                         
02                           (ii)  in the best interests of the state;                                                     
03                 (9)  lead and coordinate all matters relating to the state's review and                                 
04       authorization of resource development projects;                                                                   
05                 (10)  enter into commercial agreements with a duration of not more                                      
06       than two years for project services related to a North Slope natural gas project;                                 
07                 (11)  in consultation with the commissioner of revenue, participate in                                  
08       the negotiation of contracts and development of terms for inclusion in proposed                                   
09       contracts associated with a North Slope natural gas project; a contract negotiated                                
10       under this paragraph to which the state is a party is not effective unless the legislature                        
11       authorizes the governor to execute the contract;                                                                  
12                 (12)  enter into confidentiality agreements to maintain the                                             
13       confidentiality of information related to contract negotiations and contract                                      
14       implementation associated with a North Slope natural gas project; information under                               
15       those confidentiality agreements is not subject to AS 40.25 (Alaska Public Records                                
16       Act), except that                                                                                                 
17                      (A)  the terms of a proposed contract that the commissioner                                        
18            presents to the legislature for the purpose of obtaining authorization for the                               
19            governor to execute is not confidential; and                                                                 
20                      (B)  confidential information obtained under this paragraph                                        
21            shall be shared with the legislature only in committees held in executive                                    
22            session or under confidentiality agreements;                                                                 
23                 (13)  in consultation with the commissioner of revenue, take                                        
24       custody of gas delivered to the state under AS 43.55.014(b) and manage the                                    
25       project services and disposition and sale of that gas;                                                        
26                 (14)  exercise the powers and do the acts necessary to carry out the                                
27       provisions and objectives of AS 43.90 that relate to this chapter.                                                
28    * Sec. 13. AS 38.05.180(i) is amended to read:                                                                     
29            (i)  The commissioner may provide for the establishment of an exploration                                    
30       incentive credit system under which a lessee of state land drilling an exploratory well                           
31       on that land may earn credits based upon the footage drilled and the region in which                              
01       the well is situated. The commissioner may also provide for credits to be earned by                               
02       persons performing geophysical work on state land, if that work is performed during                               
03       the two seasons immediately preceding an announced lease sale and on land included                                
04       within the sale area and the geophysical information is made public following the sale.                           
05       Credits may not exceed 50 percent of the cost of the drilling or geophysical work.                                
06       Credits may be used during a limited period established by the commissioner and may                               
07       be assigned during that period. Credits may be applied against (1) royalty and rental                             
08       payments for oil and gas or for gas only payable to the state or (2) taxes payable under                          
09       AS 43.55.011 [AS 43.55]. A credit may not exceed 50 percent of the payment toward                             
10       which it is being applied. Amounts due the Alaska permanent fund (AS 37.13.010)                                   
11       shall be calculated before the application of credits under this subsection.                                      
12    * Sec. 14. AS 38.05.180 is amended by adding a new subsection to read:                                             
13            (hh)  Notwithstanding any other provisions of this chapter, if the commissioner                              
14       makes a written determination that a North Slope natural gas project has sufficient                               
15       financial commitment for a work plan and budget necessary to support major permits                                
16       and regulatory filings required by state and federal agencies, and sufficient                                     
17       commitment of gas by lessees, the commissioner may propose modifications to                                       
18       existing leases that relate to                                                                                    
19                 (1)  switching between taking the state's royalty gas in value and in                                   
20       kind to ensure that the state's actions do not unreasonably                                                       
21                      (A)  cause the lessee or other person to bear disproportionate                                     
22            transportation costs with respect to the state's royalty gas; or                                             
23                      (B)  interfere with long-term marketing of natural gas by the                                      
24            lessee or other person;                                                                                      
25                 (2)  providing a method for establishing a fair market value for each                                   
26       component of the state's royalty gas and using appropriate adjustments to reflect fair                            
27       market value deductions for actual and reasonable transportation and processing costs                             
28       for the state's royalty gas from the North Slope to the first destination market;                                 
29                 (3)  establishing fixed royalty rates and modifying net profit shares                                   
30       under leases subject to this subsection; a fixed royalty rate established under this                              
31       paragraph may not be less than 12.5 percent.                                                                      
01    * Sec. 15. AS 38.05.180(hh), as enacted in sec. 14 of this Act, is amended to read:                                
02            (hh)  Notwithstanding any other provisions of this chapter, if the commissioner                              
03       makes a written determination that a North Slope natural gas project has sufficient                               
04       financial commitment for a work plan and budget necessary to support major permits                                
05       and regulatory filings required by state and federal agencies, and sufficient                                     
06       commitment of gas by lessees, the commissioner may propose modifications to                                       
07       existing leases that relate to                                                                                    
08                 (1)  switching between taking the state's royalty gas in value and in                                   
09       kind to ensure that the state's actions do not unreasonably                                                       
10                      (A)  cause the lessee or other person to bear disproportionate                                     
11            transportation costs with respect to the state's royalty gas or gas delivered to                         
12            the state under AS 43.55.014(b); or                                                                      
13                      (B)  interfere with long-term marketing of natural gas by the                                      
14            lessee or other person;                                                                                      
15                 (2)  providing a method for establishing a fair market value for each                                   
16       component of the state's royalty gas and using appropriate adjustments to reflect fair                            
17       market value deductions for actual and reasonable transportation and processing costs                             
18       for the state's royalty gas from the North Slope to the first destination market;                                 
19                 (3)  establishing fixed royalty rates and modifying net profit shares                                   
20       under leases subject to this subsection; a fixed royalty rate established under this                              
21       paragraph may not be less than 12.5 percent.                                                                      
22    * Sec. 16. AS 38.05.183(a) is amended to read:                                                                     
23            (a)  The sale, exchange, or other disposal of a mineral obtained by the state as a                           
24       royalty under AS 38.05.182, [OR] the sale, exchange, or other disposal in whole or in                             
25       part of a right to receive future mineral production under a state lease under this                               
26       chapter, or the sale, exchange, or other disposal of gas delivered to the state under                         
27       AS 43.55.014(b) shall be by competitive bid and the sale, exchange, or other disposal                         
28       made to the highest responsible bidder, except that competitive bidding is not required                           
29       when the commissioner, after prior written notice to the Alaska Royalty Oil and Gas                               
30       Development Advisory Board under AS 38.06.050, determines that the best interest of                               
31       the state does not require it or that no competition exists.                                                      
01    * Sec. 17. AS 38.05.183(c) is amended to read:                                                                     
02            (c)  If the commissioner determines that a sale, exchange, or other disposal of a                            
03       mineral obtained by the state as a royalty under AS 38.05.182, [OR] of a right to                             
04       receive future mineral production under a state lease under this chapter, or of gas                           
05       delivered to the state under AS 43.55.014(b) shall be made otherwise than by                                  
06       competitive bid, and the Alaska Royalty Oil and Gas Development Advisory Board                                    
07       has been notified in writing of that determination, the commissioner shall make public                            
08       in writing the specific findings and conclusions upon which that determination is                                 
09       based.                                                                                                            
10    * Sec. 18. AS 38.05.183(d) is amended to read:                                                                     
11            (d)  Oil or gas taken in kind by the state as its royalty share or gas delivered to                      
12       the state under AS 43.55.014(b) may not be sold or otherwise disposed of for export                           
13       from the state until the commissioner determines that the [ROYALTY-IN-KIND] oil                                   
14       or gas is surplus to the present and projected intrastate domestic and industrial needs.                          
15       The commissioner shall make public, in writing, the specific findings and reasons on                              
16       which the determination is based.                                                                                 
17    * Sec. 19. AS 38.05.183(e) is amended to read:                                                                     
18            (e)  When a sale, exchange, or other disposal of oil or gas taken in kind by the                             
19       state as its royalty share, or a sale, exchange, or other disposal in whole or in part of a                       
20       right to receive future royalty oil or gas, under a state lease under this chapter is made                        
21       other than by competitive bid, or when a sale, exchange, or other disposal of gas                             
22       delivered to the state under AS 43.55.014(b) is made other than by competitive                                
23       bid, the sale, exchange, or other disposal shall be awarded by the commissioner to the                        
24       prospective buyer whose proposal offers the maximum benefits to citizens of the state.                            
25       The commissioner shall consider                                                                                   
26                 (1)  the cash value offered;                                                                            
27                 (2)  the projected effects of the sale, exchange, or other disposal on the                              
28       economy of the state;                                                                                             
29                 (3)  the projected benefits of refining or processing the oil or gas in the                             
30       state;                                                                                                            
31                 (4)  the ability of the prospective buyer to provide refined products or                                
01       by-products for distribution and sale in the state with price or supply benefits to the                           
02       citizens of the state; and                                                                                        
03                 (5)  the criteria listed in AS 38.06.070(a).                                                            
04    * Sec. 20. AS 38.05.965 is amended by adding new paragraphs to read:                                               
05                 (26)  "North Slope natural gas project" means a project to produce                                      
06       natural gas from state oil and gas leases that include land north of 68 degrees North                             
07       latitude for transport in a gaseous state from the North Slope;                                                 
08                 (27)  "project services" means services provided by a gas treatment                                     
09       plant, pipeline, liquefaction facility, or marine terminal, marine transportation                                 
10       services, or other services necessary to take natural gas to market.                                              
11    * Sec. 21. AS 40.25.100(a) is amended to read:                                                                     
12            (a)  Information in the possession of the Department of Revenue that discloses                               
13       the particulars of the business or affairs of a taxpayer or other person, including                           
14       information under AS 38.05.020(b)(11) that is subject to a confidentiality                                    
15       agreement under AS 38.05.020(b)(12), is not a matter of public record, except as                              
16       provided in AS 43.05.230(i) or for purposes of investigation and law enforcement. The                             
17       information shall be kept confidential except when its production is required in an                               
18       official investigation, administrative adjudication under AS 43.05.405 - 43.05.499, or                            
19       court proceeding. These restrictions do not prohibit the publication of statistics                                
20       presented in a manner that prevents the identification of particular reports and items,                           
21       prohibit the publication of tax lists showing the names of taxpayers who are delinquent                           
22       and relevant information that may assist in the collection of delinquent taxes, or                                
23       prohibit the publication of records, proceedings, and decisions under AS 43.05.405 -                              
24       43.05.499.                                                                                                        
25    * Sec. 22. AS 40.25.100, as amended by sec. 21 of this Act, is amended to read:                                    
26            (a)  Information in the possession of the Department of Revenue that discloses                               
27       the particulars of the business or affairs of a taxpayer or other person, including                               
28       information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement                              
29       under AS 38.05.020(b)(12), is not a matter of public record, except as provided in                                
30       AS 43.05.230(i) or (k) or for purposes of investigation and law enforcement. The                              
31       information shall be kept confidential except when its production is required in an                               
01       official investigation, administrative adjudication under AS 43.05.405 - 43.05.499, or                            
02       court proceeding. These restrictions do not prohibit the publication of statistics                                
03       presented in a manner that prevents the identification of particular reports and items,                           
04       prohibit the publication of tax lists showing the names of taxpayers who are delinquent                           
05       and relevant information that may assist in the collection of delinquent taxes, or                                
06       prohibit the publication of records, proceedings, and decisions under AS 43.05.405 -                              
07       43.05.499.                                                                                                        
08    * Sec. 23. AS 40.25.120(a) is amended to read:                                                                     
09            (a)  Every person has a right to inspect a public record in the state, including                             
10       public records in recorders' offices, except                                                                      
11                 (1)  records of vital statistics and adoption proceedings, which shall be                               
12       treated in the manner required by AS 18.50;                                                                       
13                 (2)  records pertaining to juveniles unless disclosure is authorized by                                 
14       law;                                                                                                              
15                 (3)  medical and related public health records;                                                         
16                 (4)  records required to be kept confidential by a federal law or                                       
17       regulation or by state law;                                                                                       
18                 (5)  to the extent the records are required to be kept confidential under                               
19       20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure                              
20       or retain federal assistance;                                                                                     
21                 (6)  records or information compiled for law enforcement purposes, but                                  
22       only to the extent that the production of the law enforcement records or information                              
23                      (A)  could reasonably be expected to interfere with enforcement                                    
24            proceedings;                                                                                                 
25                      (B)  would deprive a person of a right to a fair trial or an                                       
26            impartial adjudication;                                                                                      
27                      (C)  could reasonably be expected to constitute an unwarranted                                     
28            invasion of the personal privacy of a suspect, defendant, victim, or witness;                                
29                      (D)  could reasonably be expected to disclose the identity of a                                    
30            confidential source;                                                                                         
31                      (E)  would disclose confidential techniques and procedures for                                     
01            law enforcement investigations or prosecutions;                                                              
02                      (F)  would disclose guidelines for law enforcement                                                 
03            investigations or prosecutions if the disclosure could reasonably be expected to                             
04            risk circumvention of the law; or                                                                            
05                      (G)  could reasonably be expected to endanger the life or                                          
06            physical safety of an individual;                                                                            
07                 (7)  names, addresses, and other information identifying a person as a                                  
08       participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the                                
09       advance college tuition savings program under AS 14.40.803 - 14.40.817;                                           
10                 (8)  public records containing information that would disclose or might                                 
11       lead to the disclosure of a component in the process used to execute or adopt an                                  
12       electronic signature if the disclosure would or might cause the electronic signature to                           
13       cease being under the sole control of the person using it;                                                        
14                 (9)  reports submitted under AS 05.25.030 concerning certain                                            
15       collisions, accidents, or other casualties involving boats;                                                       
16                 (10)  records or information pertaining to a plan, program, or                                          
17       procedures for establishing, maintaining, or restoring security in the state, or to a                             
18       detailed description or evaluation of systems, facilities, or infrastructure in the state,                        
19       but only to the extent that the production of the records or information                                          
20                      (A)  could reasonably be expected to interfere with the                                            
21            implementation or enforcement of the security plan, program, or procedures;                                  
22                      (B)  would disclose confidential guidelines for investigations or                                  
23            enforcement and the disclosure could reasonably be expected to risk                                          
24            circumvention of the law; or                                                                                 
25                      (C)  could reasonably be expected to endanger the life or                                          
26            physical safety of an individual or to present a real and substantial risk to the                            
27            public health and welfare;                                                                                   
28                 (11)  the written notification regarding a proposed regulation provided                                 
29       under AS 24.20.105 to the Department of Law and the affected state agency and                                     
30       communications between the Legislative Affairs Agency, the Department of Law, and                                 
31       the affected state agency under AS 24.20.105;                                                                     
01                 (12)  records that are                                                                                  
02                      (A)  proprietary, privileged, or a trade secret in accordance with                                 
03            AS 43.90.150 or 43.90.220(e);                                                                                
04                      (B)  applications that are received under AS 43.90 until notice is                                 
05            published under AS 43.90.160;                                                                                
06                 (13)  information of the Alaska Gasline Development Corporation                                         
07       created under AS 31.25.010 or a subsidiary of the Alaska Gasline Development                                      
08       Corporation that is confidential by law or under a valid confidentiality agreement;                           
09                 (14)  information under AS 38.05.020(b)(11) that is subject to a                                    
10       confidentiality agreement under AS 38.05.020(b)(12).                                                          
11    * Sec. 24. AS 43.05.010 is amended to read:                                                                        
12            Sec. 43.05.010. Duties of commissioner. The commissioner of revenue shall                                  
13                 (1)  exercise general supervision and direct the activities of the                                      
14       Department of Revenue;                                                                                            
15                 (2)  supervise the fiscal affairs and responsibilities of the department;                               
16                 (3)  prescribe uniform rules for investigations and hearings;                                           
17                 (4)  keep a record of all departmental proceedings, record and file all                                 
18       bonds, and assume custody of returns, reports, papers, and documents of the                                       
19       department;                                                                                                       
20                 (5)  adopt a seal and affix it to each order, process, or certificate issued                            
21       by the commissioner;                                                                                              
22                 (6)  keep a record of each order, process, and certificate issued by the                                
23       commissioner, and keep the record open to public inspection at all reasonable times;                              
24                 (7)  hold hearings and investigations necessary for the administration of                               
25       state tax and revenue laws;                                                                                       
26                 (8)  except as provided in AS 43.05.405 - 43.05.499 and in                                              
27       AS 44.64.030, hear and determine appeals of a matter within the jurisdiction of the                               
28       Department of Revenue and enter orders on the appeals that are final unless reversed                              
29       or modified by the courts;                                                                                        
30                 (9)  issue subpoenas to require the attendance of witnesses and the                                     
31       production of necessary books, papers, documents, correspondence, and other things;                               
01                 (10)  order the taking of depositions before a person competent to                                      
02       administer oaths;                                                                                                 
03                 (11)  administer oaths and take acknowledgments;                                                        
04                 (12)  request the attorney general for rulings on the interpretation of the                             
05       tax and revenue laws administered by the department;                                                              
06                 (13)  call upon the attorney general to institute actions for recovery of                               
07       unpaid taxes, fees, excises, additions to tax, penalties, and interest;                                           
08                 (14)  issue warrants for the collection of unpaid tax penalties and                                     
09       interest and take all steps necessary and proper to enforce full and complete                                     
10       compliance with the tax, license, excise, and other revenue laws of the state;                                    
11                 (15)  report to the legislature before February 15 of each year the total                               
12       amount of contributions reported and the total amount of credit claimed during the                                
13       previous calendar year under AS 43.20.014, AS 43.55.019, AS 43.56.018,                                            
14       AS 43.65.018, AS 43.75.018, and AS 43.77.045;                                                                 
15                 (16)  consult with the commissioner of natural resources on                                         
16       negotiation of contracts and development of terms for inclusion in proposed                                   
17       contracts associated with a North Slope natural gas project.                                                  
18    * Sec. 25. AS 43.05.010, as amended by sec. 24 of this Act, is amended to read:                                    
19            Sec. 43.05.010. Duties of commissioner. The commissioner of revenue shall                                  
20                 (1)  exercise general supervision and direct the activities of the                                      
21       Department of Revenue;                                                                                            
22                 (2)  supervise the fiscal affairs and responsibilities of the department;                               
23                 (3)  prescribe uniform rules for investigations and hearings;                                           
24                 (4)  keep a record of all departmental proceedings, record and file all                                 
25       bonds, and assume custody of returns, reports, papers, and documents of the                                       
26       department;                                                                                                       
27                 (5)  adopt a seal and affix it to each order, process, or certificate issued                            
28       by the commissioner;                                                                                              
29                 (6)  keep a record of each order, process, and certificate issued by the                                
30       commissioner, and keep the record open to public inspection at all reasonable times;                              
31                 (7)  hold hearings and investigations necessary for the administration of                               
01       state tax and revenue laws;                                                                                       
02                 (8)  except as provided in AS 43.05.405 - 43.05.499 and in                                              
03       AS 44.64.030, hear and determine appeals of a matter within the jurisdiction of the                               
04       Department of Revenue and enter orders on the appeals that are final unless reversed                              
05       or modified by the courts;                                                                                        
06                 (9)  issue subpoenas to require the attendance of witnesses and the                                     
07       production of necessary books, papers, documents, correspondence, and other things;                               
08                 (10)  order the taking of depositions before a person competent to                                      
09       administer oaths;                                                                                                 
10                 (11)  administer oaths and take acknowledgments;                                                        
11                 (12)  request the attorney general for rulings on the interpretation of the                             
12       tax and revenue laws administered by the department;                                                              
13                 (13)  call upon the attorney general to institute actions for recovery of                               
14       unpaid taxes, fees, excises, additions to tax, penalties, and interest;                                           
15                 (14)  issue warrants for the collection of unpaid tax penalties and                                     
16       interest and take all steps necessary and proper to enforce full and complete                                     
17       compliance with the tax, license, excise, and other revenue laws of the state;                                    
18                 (15)  report to the legislature before February 15 of each year the total                               
19       amount of contributions reported and the total amount of credit claimed during the                                
20       previous calendar year under AS 43.20.014, AS 43.55.019, AS 43.56.018,                                            
21       AS 43.65.018, AS 43.75.018, and AS 43.77.045;                                                                     
22                 (16)  consult with the commissioner of natural resources on negotiation                                 
23       of contracts and development of terms for inclusion in proposed contracts associated                              
24       with a North Slope natural gas project;                                                                       
25                 (17)  direct the disposition of revenues received from gas delivered                                
26       to the state under AS 43.55.014(b) by entering into agreements with the                                       
27       commissioner of natural resources related to the management of the custody and                                
28       disposition of gas delivered to the state under AS 43.55.014(b).                                              
29    * Sec. 26. AS 43.05.230 is amended by adding a new subsection to read:                                             
30            (k)  The name of each person that the department has allowed to make an                                      
31       election under AS 43.55.014(a) and the amount of gas produced from each lease or                                  
01       property to which an effective election under AS 43.55.014 applies is public                                      
02       information.                                                                                                      
03    * Sec. 27. AS 43.20.144(f) is amended to read:                                                                     
04            (f)  The extraction factor of a taxpayer subject to this section is a fraction,                              
05                 (1)  the numerator of which is the sum of the following for the tax                                     
06       period:                                                                                                           
07                      (A)  the number of barrels of the taxpayer's oil (net of royalty to                                
08            an unrelated party) produced from or allocated to leases or properties of the                                
09            taxpayer in this state; and                                                                                  
10                      (B)  one-sixth of the number of Mcf of the taxpayer's gas,                                     
11            including gas subject to an election under AS 43.55.014, (net of royalty to                              
12            an unrelated party) produced from or allocated to leases or properties of the                                
13            taxpayer in this state, excluding reinjected gas; and                                                        
14                 (2)  the denominator of which is the sum of the following for the tax                                   
15       period:                                                                                                           
16                      (A)  the number of barrels of oil of the taxpayer's consolidated                                   
17            business (net of royalty to an unrelated party) produced from or allocated to                                
18            leases or properties of the taxpayer's consolidated business everywhere; and                                 
19                      (B)  one-sixth of the number of Mcf of gas, including gas                                      
20            subject to an election under AS 43.55.014, of the taxpayer's consolidated                                
21            business (net of royalty to an unrelated party) produced from or allocated to                                
22            leases or properties of the taxpayer's consolidated business everywhere,                                     
23            excluding reinjected gas.                                                                                    
24    * Sec. 28. AS 43.55.011(e) is amended to read:                                                                     
25            (e)  There is levied on the producer of oil or gas a tax for all oil and gas                                 
26       produced each calendar year from each lease or property in the state, less any oil and                            
27       gas the ownership or right to which is exempt from taxation or constitutes a                                      
28       landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as                          
29       otherwise provided under (f), (j), (k), (o), and (p) of this section, for oil and gas                         
30       produced                                                                                                      
31                 (1)  before January 1, 2014, the tax is equal to the sum of                                             
01                      (A)  the annual production tax value of the taxable oil and gas                                    
02            as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and                                         
03                      (B)  the sum, over all months of the calendar year, of the tax                                     
04            amounts determined under (g) of this section;                                                                
05                 (2)  on and after January 1, 2014, and before January 1, 2022, the tax                              
06       is equal to the annual production tax value of the taxable oil and gas as calculated                              
07       under AS 43.55.160(a)(1) multiplied by 35 percent;                                                            
08                 (3)  on and after January 1, 2022, the tax for                                                      
09                      (A)  oil is equal to the annual production tax value of the                                    
10            taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent;                                
11                      (B)  gas is equal to 10.5 percent of the gross value at the                                    
12            point of production of the taxable gas; if the gross value at the point of                               
13            production of gas produced from a lease or property is less than zero, that                              
14            gross value at the point of production is considered zero for purposes of                                
15            this subparagraph.                                                                                       
16    * Sec. 29. AS 43.55.011(f) is amended to read:                                                                     
17            (f)  The levy of tax under (e) of this section for                                                       
18                 (1)  oil and gas produced before January 1, 2022, from leases or                                
19       properties that include land north of 68 degrees North latitude, other than [OIL                              
20       AND GAS PRODUCTION SUBJECT TO (i) OF THIS SECTION AND] gas subject                                                
21       to (o) of this section, may not be less than                                                                      
22                      (A) [(1)]  four percent of the gross value at the point of                                     
23            production when the average price per barrel for Alaska North Slope crude oil                                
24            for sale on the United States West Coast during the calendar year for which the                              
25            tax is due is more than $25;                                                                                 
26                      (B) [(2)]  three percent of the gross value at the point of                                    
27            production when the average price per barrel for Alaska North Slope crude oil                                
28            for sale on the United States West Coast during the calendar year for which the                              
29            tax is due is over $20 but not over $25;                                                                     
30                      (C) [(3)]  two percent of the gross value at the point of                                      
31            production when the average price per barrel for Alaska North Slope crude oil                                
01            for sale on the United States West Coast during the calendar year for which the                              
02            tax is due is over $17.50 but not over $20;                                                                  
03                      (D) [(4)]  one percent of the gross value at the point of                                      
04            production when the average price per barrel for Alaska North Slope crude oil                                
05            for sale on the United States West Coast during the calendar year for which the                              
06            tax is due is over $15 but not over $17.50; or                                                               
07                      (E) [(5)]  zero percent of the gross value at the point of                                     
08            production when the average price per barrel for Alaska North Slope crude oil                                
09            for sale on the United States West Coast during the calendar year for which the                              
10            tax is due is $15 or less; and                                                                           
11                 (2)  oil produced on and after January 1, 2022, from leases or                                      
12       properties that include land north of 68 degrees North latitude, may not be less                              
13       than                                                                                                          
14                      (A)  four percent of the gross value at the point of                                           
15            production when the average price per barrel for Alaska North Slope                                      
16            crude oil for sale on the United States West Coast during the calendar                                   
17            year for which the tax is due is more than $25;                                                          
18                      (B)  three percent of the gross value at the point of                                          
19            production when the average price per barrel for Alaska North Slope                                      
20            crude oil for sale on the United States West Coast during the calendar                                   
21            year for which the tax is due is over $20 but not over $25;                                              
22                      (C)  two percent of the gross value at the point of production                                 
23            when the average price per barrel for Alaska North Slope crude oil for                                   
24            sale on the United States West Coast during the calendar year for which                                  
25            the tax is due is over $17.50 but not over $20;                                                          
26                      (D)  one percent of the gross value at the point of production                                 
27            when the average price per barrel for Alaska North Slope crude oil for                                   
28            sale on the United States West Coast during the calendar year for which                                  
29            the tax is due is over $15 but not over $17.50; or                                                       
30                      (E)  zero percent of the gross value at the point of                                           
31            production when the average price per barrel for Alaska North Slope                                      
01            crude oil for sale on the United States West Coast during the calendar                                   
02            year for which the tax is due is $15 or less.                                                            
03    * Sec. 30. AS 43.55 is amended by adding a new section to read:                                                    
04            Sec. 43.55.014. Payment in gas of tax for gas. (a) For gas produced on and                                 
05       after January 1, 2022, from oil and gas leases that have been modified under                                      
06       AS 38.05.180(hh), other than gas described in (e) of this section, the department may                             
07       allow a producer to make an irrevocable election, under regulations adopted by the                                
08       department, to pay in gas the production tax levied by this section in lieu of the tax                            
09       otherwise levied for the gas by AS 43.55.011(e).                                                                  
10            (b)  A production tax levied by this section is equal to 10.5 percent of the gas                             
11       otherwise taxable under AS 43.55.011(e)(3) produced from each lease or property to                                
12       which an effective election under (a) of this section applies, when and as that gas is                            
13       produced. The producer shall pay the tax in gas by delivering that 10.5 percent of the                            
14       gas to the state at the point of production.                                                                      
15            (c)  The Department of Natural Resources shall manage under                                                  
16       AS 38.05.020(b)(13) the custody and disposition of gas delivered to the state under (b)                           
17       of this section.                                                                                                  
18            (d)  If a deficiency in a tax levied by this section is assessed, or if a provision                          
19       of this title providing for interest or a penalty based on a percentage of a tax liability or                     
20       tax deficiency applies to gas for which a tax is levied by this section, the amount of the                        
21       deficiency and the tax amount on which the interest or penalty percentage is calculated                           
22       is treated for the purpose only of that calculation as having been levied by                                      
23       AS 43.55.011(e) rather than this section.                                                                         
24            (e)  This section does not apply to gas                                                                      
25                 (1)  flared, released, or allowed to escape upstream of the point of                                    
26       production of gas; or                                                                                             
27                 (2)  used in the operation of a lease or property in the state for drilling                             
28       for or producing oil or gas, or for repressuring a reservoir.                                                     
29    * Sec. 31. AS 43.55.019(a) is amended to read:                                                                     
30            (a)  A producer of oil or gas is allowed a credit against the tax levied by                              
31       AS 43.55.011(e) [DUE UNDER THIS CHAPTER] for cash contributions accepted for                                  
01                 (1)  direct instruction, research, and educational support purposes,                                    
02       including library and museum acquisitions, and contributions to endowment, by an                                  
03       Alaska university foundation or by a nonprofit, public or private, Alaska two-year or                             
04       four-year college accredited by a regional accreditation association;                                             
05                 (2)  secondary school level vocational education courses, programs, and                                 
06       facilities by a school district in the state;                                                                     
07                 (3)  vocational education courses, programs, and facilities by a state-                                 
08       operated vocational technical education and training school;                                                      
09                 (4)  a facility or an annual intercollegiate sports tournament by a                                     
10       nonprofit, public or private, Alaska two-year or four-year college accredited by a                                
11       regional accreditation association;                                                                               
12                 (5)  Alaska Native cultural or heritage programs and educational                                        
13       support, including mentoring and tutoring, provided by a nonprofit agency for public                              
14       school staff and for students who are in grades kindergarten through 12 in the state;                             
15                 (6)  education, research, rehabilitation, and facilities by an institution                              
16       that is located in the state and that qualifies as a coastal ecosystem learning center                            
17       under the Coastal America Partnership established by the federal government; and                                  
18                 (7)  the Alaska higher education investment fund under AS 37.14.750.                                    
19    * Sec. 32. AS 43.55.019(e) is amended to read:                                                                     
20            (e)  The credit under this section may not reduce a person's tax liability under                             
21       AS 43.55.011(e) [THIS CHAPTER] to below zero for any tax year. An unused credit                               
22       or portion of a credit not used under this section for a tax year may not be sold, traded,                        
23       transferred, or applied in a subsequent tax year.                                                                 
24    * Sec. 33. AS 43.55.020(a) is amended to read:                                                                     
25            (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                             
26       the tax as follows:                                                                                               
27                 (1)  for oil and gas produced before January 1, 2014, an installment                                
28       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
29       as allowed by law, is due for each month of the calendar year on the last day of the                              
30       following month; except as otherwise provided under (2) of this subsection, the                                   
31       amount of the installment payment is the sum of the following amounts, less 1/12 of                               
01       the tax credits that are allowed by law to be applied against the tax levied by                                   
02       AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                              
03       not be less than zero:                                                                                            
04                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
05            produced from leases or properties in the state outside the Cook Inlet                                       
06            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
07            the greater of                                                                                               
08                           (i)  zero; or                                                                                 
09                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
10                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
11                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
12                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
13                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
14                 at the point of production of the oil and gas produced from the leases or                               
15                 properties during the month for which the installment payment is                                        
16                 calculated;                                                                                             
17                      (B)  for oil and gas produced from leases or properties subject                                    
18            to AS 43.55.011(f), the greatest of                                                                          
19                           (i)  zero;                                                                                    
20                           (ii)  zero percent, one percent, two percent, three                                           
21                 percent, or four percent, as applicable, of the gross value at the point of                             
22                 production of the oil and gas produced from the leases or properties                                    
23                 during the month for which the installment payment is calculated; or                                    
24                           (iii)  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 those leases                                
30                 or properties during the month for which the installment payment is                                     
31                 calculated;                                                                                             
01                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
02            each lease or property, the greater of                                                                       
03                           (i)  zero; or                                                                                 
04                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
05                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
06                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
07                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
08                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
09                 produced from the lease or property from the gross value at the point of                                
10                 production of the oil or gas, respectively, produced from the lease or                                  
11                 property during the month for which the installment payment is                                          
12                 calculated;                                                                                             
13                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
14                           (i)  the sum of 25 percent and the tax rate calculated for                                    
15                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
16                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
17                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
18                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
19                 at the point of production of the oil and gas produced from the leases or                               
20                 properties during the month for which the installment payment is                                        
21                 calculated, but not less than zero; or                                                                  
22                           (ii)  four percent of the gross value at the point of                                         
23                 production of the oil and gas produced from the leases or properties                                    
24                 during the month, but not less than zero;                                                               
25                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
26       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
27       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
28       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
29       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
30       amount of taxable gas produced during the month for the amount of taxable gas                                     
31       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
01       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
02       amount of taxable oil produced during the calendar year;                                                          
03                 (3)  an installment payment of the estimated tax levied by                                              
04       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
05       on the last day of the following month; the amount of the installment payment is the                              
06       sum of                                                                                                            
07                      (A)  the applicable tax rate for oil provided under                                                
08            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
09            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
10            during the month; and                                                                                        
11                      (B)  the applicable tax rate for gas provided under                                                
12            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
13            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
14            during the month;                                                                                            
15                 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                       
16       applied as allowed by law, that exceeds the total of the amounts due as installment                               
17       payments of estimated tax is due on March 31 of the year following the calendar year                              
18       of production;                                                                                                    
19                 (5)  for oil and gas produced on and after January 1, 2014, and before                          
20       January 1, 2022, an installment payment of the estimated tax levied by                                        
21       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
22       month of the calendar year on the last day of the following month; except as otherwise                            
23       provided under (6) of this subsection, the amount of the installment payment is the                               
24       sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be                          
25       applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                           
26       of the installment payment may not be less than zero:                                                             
27                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
28            produced from leases or properties in the state outside the Cook Inlet                                       
29            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
30            the greater of                                                                                               
31                           (i)  zero; or                                                                                 
01                           (ii)  35 percent multiplied by the remainder obtained by                                      
02                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
03                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
04                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
05                 at the point of production of the oil and gas produced from the leases or                               
06                 properties during the month for which the installment payment is                                        
07                 calculated;                                                                                             
08                      (B)  for oil and gas produced from leases or properties subject                                    
09            to AS 43.55.011(f), the greatest of                                                                          
10                           (i)  zero;                                                                                    
11                           (ii)  zero percent, one percent, two percent, three                                           
12                 percent, or four percent, as applicable, of the gross value at the point of                             
13                 production of the oil and gas produced from the leases or properties                                    
14                 during the month for which the installment payment is calculated; or                                    
15                           (iii)  35 percent multiplied by the remainder obtained by                                     
16                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
17                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
18                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
19                 at the point of production of the oil and gas produced from those leases                                
20                 or properties during the month for which the installment payment is                                     
21                 calculated, except that, for the purposes of this calculation, a reduction                              
22                 from the gross value at the point of production may apply for oil and                                   
23                 gas subject to AS 43.55.160(f) or (g);                                                                  
24                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
25            each lease or property, the greater of                                                                       
26                           (i)  zero; or                                                                                 
27                           (ii)  35 percent multiplied by the remainder obtained by                                      
28                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
29                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
30                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
31                 produced from the lease or property from the gross value at the point of                                
01                 production of the oil or gas, respectively, produced from the lease or                                  
02                 property during the month for which the installment payment is                                          
03                 calculated;                                                                                             
04                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
05                           (i)  35 percent multiplied by the remainder obtained by                                       
06                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
07                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
08                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
09                 at the point of production of the oil and gas produced from the leases or                               
10                 properties during the month for which the installment payment is                                        
11                 calculated, but not less than zero; or                                                                  
12                           (ii)  four percent of the gross value at the point of                                         
13                 production of the oil and gas produced from the leases or properties                                    
14                 during the month, but not less than zero;                                                               
15                 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                
16       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
17       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
18       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
19       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
20       amount of taxable gas produced during the month for the amount of taxable gas                                     
21       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
22       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
23       amount of taxable oil produced during the calendar year;                                                      
24                 (7)  for oil and gas produced on or after January 1, 2022, an                                       
25       installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax                            
26       credits applied as allowed by law, is due for each month of the calendar year on                              
27       the last day of the following month; the amount of the installment payment is the                             
28       sum of the following amounts, less 1/12 of the tax credits that are allowed by law                            
29       to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but                            
30       the amount of the installment payment may not be less than zero:                                              
31                      (A)  for oil produced from leases or properties that include                                   
01            land north of 68 degrees North latitude, the greatest of                                                 
02                           (i)  zero;                                                                                
03                           (ii)  zero percent, one percent, two percent, three                                       
04                 percent, or four percent, as applicable, of the gross value at the                                  
05                 point of production of the oil produced from the leases or                                          
06                 properties during the month for which the installment payment is                                    
07                 calculated; or                                                                                      
08                           (iii)  35 percent multiplied by the remainder obtained                                    
09                 by subtracting 1/12 of the producer's adjusted lease expenditures                                   
10                 for the calendar year of production under AS 43.55.165 and                                          
11                 43.55.170 that are deductible for the oil under AS 43.55.160(h)(1)                                  
12                 from the gross value at the point of production of the oil produced                                 
13                 from those leases or properties during the month for which the                                      
14                 installment payment is calculated, except that, for the purposes of                                 
15                 this calculation, a reduction from the gross value at the point of                                  
16                 production may apply for oil subject to AS 43.55.160(f) or                                          
17                 43.55.160(f) and (g);                                                                               
18                      (B)  for oil produced before or during the last calendar year                                  
19            under AS 43.55.024(b) for which the producer could take a tax credit                                     
20            under AS 43.55.024(a), from leases or properties in the state outside the                                
21            Cook Inlet sedimentary basin, no part of which is north of 68 degrees                                    
22            North latitude, other than leases or properties subject to AS 43.55.011(p),                              
23            the greater of                                                                                           
24                           (i)  zero; or                                                                             
25                           (ii)  35 percent multiplied by the remainder obtained                                     
26                 by subtracting 1/12 of the producer's adjusted lease expenditures                                   
27                 for the calendar year of production under AS 43.55.165 and                                          
28                 43.55.170 that are deductible for the oil under AS 43.55.160(h)(2)                                  
29                 from the gross value at the point of production of the oil produced                                 
30                 from the leases or properties during the month for which the                                        
31                 installment payment is calculated;                                                                  
01                      (C)  for oil and gas produced from leases or properties                                        
02            subject to AS 43.55.011(p), except as otherwise provided under (8) of this                               
03            subsection, the sum of                                                                                   
04                           (i)  35 percent multiplied by the remainder obtained                                      
05                 by subtracting 1/12 of the producer's adjusted lease expenditures                                   
06                 for the calendar year of production under AS 43.55.165 and                                          
07                 43.55.170 that are deductible for the oil under AS 43.55.160(h)(3)                                  
08                 from the gross value at the point of production of the oil produced                                 
09                 from the leases or properties during the month for which the                                        
10                 installment payment is calculated, but not less than zero; and                                      
11                           (ii)  10.5 percent of the gross value at the point of                                     
12                 production of the gas produced from the leases or properties                                        
13                 during the month, but not less than zero;                                                           
14                      (D)  for oil produced from leases or properties in the state,                                  
15            no part of which is north of 68 degrees North latitude, other than leases or                             
16            properties subject to (B) or (C) of this paragraph, the greater of                                       
17                           (i)  zero; or                                                                             
18                           (ii)  35 percent multiplied by the remainder obtained                                     
19                 by subtracting 1/12 of the producer's adjusted lease expenditures                                   
20                 for the calendar year of production under AS 43.55.165 and                                          
21                 43.55.170 that are deductible for the oil under AS 43.55.160(h)(4)                                  
22                 from the gross value at the point of production of the oil produced                                 
23                 from the leases or properties during the month for which the                                        
24                 installment payment is calculated;                                                                  
25                      (E)  for gas produced from each lease or property in the                                       
26            state, other than a lease or property subject to AS 43.55.011(p), 10.5                                   
27            percent of the gross value at the point of production of the gas produced                                
28            from the lease or property during the month for which the installment                                    
29            payment is calculated, but not less than zero;                                                           
30                 (8)  an amount calculated under (7)(C) of this subsection may not                                   
31       exceed four percent of the gross value at the point of production of the oil and gas                          
01       produced from leases or properties subject to AS 43.55.011(p) during the month                                
02       for which the installment payment is calculated;                                                              
03                 (9)  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and                              
04       (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the                            
05       point of production is determined under AS 43.55.011(f)(1) or (2) but substituting                            
06       the phrase "month for which the installment payment is calculated" in                                         
07       AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is                                 
08       due."                                                                                                     
09    * Sec. 34. AS 43.55.020(g) is amended to read:                                                                     
10            (g)  Notwithstanding any contrary provision of AS 43.05.225,                                                 
11                 (1)  before January 1, 2014, an unpaid amount of an installment                                         
12       payment required under (a)(1) - (3) of this section that is not paid when due bears                               
13       interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal                              
14       Revenue Code), as amended, compounded daily, from the date the installment                                        
15       payment is due until March 31 following the calendar year of production, and (B) as                               
16       provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued                            
17       under (A) of this paragraph that remains unpaid after that March 31 is treated as an                              
18       addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax                          
19       due under (a)(4) of this section that is not paid when due bears interest as provided for                         
20       a delinquent tax under AS 43.05.225;                                                                              
21                 (2)  on and after January 1, 2014, an unpaid amount of an installment                                   
22       payment required under (a)(3), (5), [OR] (6), or (7) of this section that is not paid                         
23       when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C.                              
24       6621 (Internal Revenue Code), as amended, compounded daily, from the date the                                     
25       installment payment is due until March 31 following the calendar year of production,                              
26       and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31;                                  
27       interest accrued under (A) of this paragraph that remains unpaid after that March 31 is                           
28       treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid                          
29       amount of tax due under (a)(4) of this section that is not paid when due bears interest                           
30       as provided for a delinquent tax under AS 43.05.225.                                                              
31    * Sec. 35. AS 43.55.020(h) is amended to read:                                                                     
01            (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                 
02                 (1)  an overpayment of an installment payment required under (a)(1),                                
03       (2), (3), (5), (6), or (7) [(a)(1) - (3), (5) OR (6)] of this section bears interest at the rate              
04       provided for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as                                      
05       amended, compounded daily, from the later of the date the installment payment is due                              
06       or the date the overpayment is made, until the earlier of                                                         
07                      (A)  the date it is refunded or is applied to an underpayment; or                                  
08                      (B)  March 31 following the calendar year of production;                                           
09                 (2)  except as provided under (1) of this subsection, interest with                                     
10       respect to an overpayment is allowed only on any net overpayment of the payments                                  
11       required under (a) of this section that remains after the later of March 31 following the                         
12       calendar year of production or the date that the statement required under                                         
13       AS 43.55.030(a) is filed;                                                                                         
14                 (3)  interest is allowed under (2) of this subsection only from a date that                             
15       is 90 days after the later of March 31 following the calendar year of production or the                           
16       date that the statement required under AS 43.55.030(a) is filed; interest is not allowed                          
17       if the overpayment was refunded within the 90-day period;                                                         
18                 (4)  interest under (2) and (3) of this subsection is paid at the rate and in                           
19       the manner provided in AS 43.05.225(1).                                                                           
20    * Sec. 36. AS 43.55.020(l) is amended to read:                                                                     
21            (l)  For oil and gas produced on [ON] and after January 1, 2014, and before                          
22       January 1, 2022, in making settlement with the royalty owner for oil and gas that is                          
23       taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on                                 
24       taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in                               
25       value at the time the tax becomes due to the amount of the tax paid. If the total                                 
26       deductions of installment payments of estimated tax for a calendar year exceed the                                
27       actual tax for that calendar year, the producer shall, before April 1 of the following                            
28       year, refund the excess to the royalty owner. Unless otherwise agreed between the                                 
29       producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on                               
30       taxable royalty oil and gas for a calendar year, other than oil and gas the ownership or                          
31       right to which constitutes a landowner's royalty interest, is considered to be the gross                          
01       value at the point of production of the taxable royalty oil and gas produced during the                           
02       calendar year multiplied by a figure that is a quotient, in which                                                 
03                 (1)  the numerator is the producer's total tax liability under                                          
04       AS 43.55.011(e)(2) [AS 43.55.011(e)] for the calendar year of production; and                                 
05                 (2)  the denominator is the total gross value at the point of production                                
06       of the oil and gas taxable under AS 43.55.011(e) produced by the producer from all                                
07       leases and properties in the state during the calendar year.                                                      
08    * Sec. 37. AS 43.55.020 is amended by adding a new subsection to read:                                             
09            (m)  For oil and gas produced on and after January 1, 2022, in making                                        
10       settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011,                             
11       the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or                             
12       may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes                             
13       due to the amount of the tax paid. If the total deductions of installment payments of                             
14       estimated tax for a calendar year exceed the actual tax for that calendar year, the                               
15       producer shall, before April 1 of the following year, refund the excess to the royalty                            
16       owner. In making settlement with the royalty owner for gas that is taxable under                                  
17       AS 43.55.014, the producer may deduct the amount of the gas paid as in kind tax on                                
18       taxable royalty gas or may deduct the gross value at the point of production of the gas                           
19       paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the                                   
20       producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on                               
21       taxable royalty oil for a calendar year, other than oil the ownership or right to which                           
22       constitutes a landowner's royalty interest, is considered to be the gross value at the                            
23       point of production of the taxable royalty oil produced during the calendar year                                  
24       multiplied by a figure that is a quotient, in which                                                               
25                 (1)  the numerator is the producer's total tax liability under                                          
26       AS 43.55.011(e)(3)(A) for the calendar year of production; and                                                    
27                 (2)  the denominator is the total gross value at the point of production                                
28       of the oil taxable under AS 43.55.011(e) produced by the producer from all leases and                             
29       properties in the state during the calendar year.                                                                 
30    * Sec. 38. AS 43.55.030(a) is amended to read:                                                                     
31            (a)  A producer that produces oil or gas from a lease or property in the state                               
01       during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                               
02       for that oil or gas, shall file with the department on March 31 of the following year a                           
03       statement, under oath, in a form prescribed by the department, giving, with other                                 
04       information required, the following:                                                                              
05                 (1)  a description of each lease or property from which oil or gas was                                  
06       produced, by name, legal description, lease number, or accounting codes assigned by                               
07       the department;                                                                                                   
08                 (2)  the names of the producer and, if different, the person paying the                                 
09       tax, if any;                                                                                                      
10                 (3)  the gross amount of oil and the gross amount of gas produced from                                  
11       each lease or property, separately identifying the gross amount of gas produced                               
12       from each lease or property to which an effective election under AS 43.55.014(a)                              
13       applies, the amount of gas delivered to the state under AS 43.55.014(b), and the                              
14       percentage of the gross amount of oil and gas owned by the producer;                                              
15                 (4)  the gross value at the point of production of the oil and of the gas                               
16       produced from each lease or property owned by the producer and the costs of                                       
17       transportation of the oil and gas;                                                                                
18                 (5)  the name of the first purchaser and the price received for the oil and                             
19       for the gas, unless relieved from this requirement in whole or in part by the                                     
20       department;                                                                                                       
21                 (6)  the producer's qualified capital expenditures, as defined in                                       
22       AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other                               
23       payments or credits under AS 43.55.170;                                                                           
24                 (7)  the production tax values of the oil and gas under AS 43.55.160(a)                             
25       or of the oil under AS 43.55.160(h), as applicable [AS 43.55.160];                                            
26                 (8)  any claims for tax credits to be applied; and                                                      
27                 (9)  calculations showing the amounts, if any, that were or are due                                     
28       under AS 43.55.020(a) and interest on any underpayment or overpayment.                                            
29    * Sec. 39. AS 43.55.160(a) is amended to read:                                                                     
30            (a)  For oil and gas produced before January 1, 2022, except [EXCEPT] as                                 
31       provided in (b), (f), and (g) of this section, for the purposes of                                                
01                 (1)  AS 43.55.011(e)(1) and (2) [AS 43.55.011(e)], the annual                                       
02       production tax value of taxable oil, gas, or oil and gas produced during a calendar year                          
03       in a category for which a separate annual production tax value is required to be                                  
04       calculated under this paragraph is the gross value at the point of production of that oil,                        
05       gas, or oil and gas taxable under AS 43.55.011(e), less the producer's lease                                      
06       expenditures under AS 43.55.165 for the calendar year applicable to the oil, gas, or oil                          
07       and gas in that category produced by the producer during the calendar year, as                                    
08       adjusted under AS 43.55.170; a separate annual production tax value shall be                                      
09       calculated for                                                                                                    
10                      (A)  oil and gas produced from leases or properties in the state                                   
11            that include land north of 68 degrees North latitude, other than gas produced                                
12            before 2022 and used in the state;                                                                           
13                      (B)  oil and gas produced from leases or properties in the state                                   
14            outside the Cook Inlet sedimentary basin, no part of which is north of 68                                    
15            degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a)                             
16            and (b); this subparagraph does not apply to                                                                 
17                           (i)  gas produced before 2022 and used in the state; or                                       
18                           (ii)  oil and gas subject to AS 43.55.011(p);                                                 
19                      (C)  oil produced before 2022 from each lease or property in the                                   
20            Cook Inlet sedimentary basin;                                                                                
21                      (D)  gas produced before 2022 from each lease or property in                                       
22            the Cook Inlet sedimentary basin;                                                                            
23                      (E)  gas produced before 2022 from each lease or property in                                       
24            the state outside the Cook Inlet sedimentary basin and used in the state, other                              
25            than gas subject to AS 43.55.011(p);                                                                         
26                      (F)  oil and gas subject to AS 43.55.011(p) produced from                                          
27            leases or properties in the state;                                                                           
28                      (G)  oil and gas produced from leases or properties in the state                                   
29            no part of which is north of 68 degrees North latitude, other than oil or gas                                
30            described in (B), (C), (D), (E), or (F) of this paragraph;                                                   
31                 (2)  AS 43.55.011(g), for oil and gas produced before January 1, 2014,                                  
01       the monthly production tax value of the taxable                                                                   
02                      (A)  oil and gas produced during a month from leases or                                            
03            properties in the state that include land north of 68 degrees North latitude is the                          
04            gross value at the point of production of the oil and gas taxable under                                      
05            AS 43.55.011(e) and produced by the producer from those leases or properties,                                
06            less 1/12 of the producer's lease expenditures under AS 43.55.165 for the                                    
07            calendar year applicable to the oil and gas produced by the producer from                                    
08            those leases or properties, as adjusted under AS 43.55.170; this subparagraph                                
09            does not apply to gas subject to AS 43.55.011(o);                                                            
10                      (B)  oil and gas produced during a month from leases or                                            
11            properties in the state outside the Cook Inlet sedimentary basin, no part of                                 
12            which is north of 68 degrees North latitude, is the gross value at the point of                              
13            production of the oil and gas taxable under AS 43.55.011(e) and produced by                                  
14            the producer from those leases or properties, less 1/12 of the producer's lease                              
15            expenditures under AS 43.55.165 for the calendar year applicable to the oil and                              
16            gas produced by the producer from those leases or properties, as adjusted under                              
17            AS 43.55.170; this subparagraph does not apply to gas subject to                                             
18            AS 43.55.011(o);                                                                                             
19                      (C)  oil produced during a month from a lease or property in the                                   
20            Cook Inlet sedimentary basin is the gross value at the point of production of                                
21            the oil taxable under AS 43.55.011(e) and produced by the producer from that                                 
22            lease or property, less 1/12 of the producer's lease expenditures under                                      
23            AS 43.55.165 for the calendar year applicable to the oil produced by the                                     
24            producer from that lease or property, as adjusted under AS 43.55.170;                                        
25                      (D)  gas produced during a month from a lease or property in                                       
26            the Cook Inlet sedimentary basin is the gross value at the point of production                               
27            of the gas taxable under AS 43.55.011(e) and produced by the producer from                                   
28            that lease or property, less 1/12 of the producer's lease expenditures under                                 
29            AS 43.55.165 for the calendar year applicable to the gas produced by the                                     
30            producer from that lease or property, as adjusted under AS 43.55.170;                                        
31                      (E)  gas produced during a month from a lease or property                                          
01            outside the Cook Inlet sedimentary basin and used in the state is the gross                                  
02            value at the point of production of that gas taxable under AS 43.55.011(e) and                               
03            produced by the producer from that lease or property, less 1/12 of the                                       
04            producer's lease expenditures under AS 43.55.165 for the calendar year                                       
05            applicable to that gas produced by the producer from that lease or property, as                              
06            adjusted under AS 43.55.170.                                                                                 
07    * Sec. 40. AS 43.55.160(e) is amended to read:                                                                     
08            (e)  Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that                                   
09       would otherwise be deductible by a producer in a calendar year but whose deduction                                
10       would cause an annual production tax value calculated under (a)(1) or (h) of this                             
11       section of taxable oil or gas produced during the calendar year to be less than zero                              
12       may be used to establish a carried-forward annual loss under AS 43.55.023(b).                                     
13       However, the department shall provide by regulation a method to ensure that, for a                                
14       period for which a producer's tax liability is limited by AS 43.55.011(j), (k), (o), or                           
15       (p), any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that would                                  
16       otherwise be deductible by a producer for that period but whose deduction would                                   
17       cause a production tax value calculated under (a)(1)(C), (D), (E), or (F) of this section                         
18       to be less than zero are accounted for as though the adjusted lease expenditures had                              
19       first been used as deductions in calculating the production tax values of oil or gas                              
20       subject to any of the limitations under AS 43.55.011(j), (k), (o), or (p) that have                               
21       positive production tax values so as to reduce the tax liability calculated without                               
22       regard to the limitation to the maximum amount provided for under the applicable                                  
23       provision of AS 43.55.011(j), (k), (o), or (p). Only the amount of those adjusted lease                           
24       expenditures remaining after the accounting provided for under this subsection may be                             
25       used to establish a carried-forward annual loss under AS 43.55.023(b). In this                                    
26       subsection, "producer" includes "explorer."                                                                       
27    * Sec. 41. AS 43.55.160(f) is amended to read:                                                                     
28            (f)  On and after January 1, 2014, in the calculation of an annual production tax                            
29       value of a producer under (a)(1)(A) or (h)(1) [(a)(1)] of this section, the gross value at                    
30       the point of production of oil or gas produced from a lease or property north of 68                               
31       degrees North latitude meeting one or more of the following criteria is reduced by 20                             
01       percent: (1) the oil or gas is produced from a lease or property that does not contain a                          
02       lease that was within a unit on January 1, 2003; (2) the oil or gas is produced from a                            
03       participating area established after December 31, 2011, that is within a unit formed                              
04       under AS 38.05.180(p) before January 1, 2003, if the participating area does not                                  
05       contain a reservoir that had previously been in a participating area established before                           
06       December 31, 2011; (3) the oil or gas is produced from acreage that was added to an                               
07       existing participating area by the Department of Natural Resources on and after                                   
08       January 1, 2014, and the producer demonstrates to the department that the volume of                               
09       oil or gas produced is from acreage added to an existing participating area. This                                 
10       subsection does not apply to gas produced before 2022 that is used in the state or to                         
11       gas produced on and after January 1, 2022. A reduction under this subsection may                              
12       not reduce the gross value at the point of production below zero. In this subsection,                             
13       "participating area" means a reservoir or portion of a reservoir producing or                                     
14       contributing to production as approved by the Department of Natural Resources.                                    
15    * Sec. 42. AS 43.55.160(g) is amended to read:                                                                     
16            (g)  On and after January 1, 2014, in addition to the reduction under (f) of this                            
17       section, in the calculation of an annual production tax value of a producer under                                 
18       (a)(1)(A) or (h)(1) [(a)(1)] of this section, the gross value at the point of production of                   
19       oil or gas produced from a lease or property north of 68 degrees North latitude that                          
20       does not contain a lease that was within a unit on January 1, 2003, is reduced by 10                              
21       percent if the oil or gas is produced from a unit made up solely of leases that have a                            
22       royalty share of more than 12.5 percent in amount or value of the production removed                              
23       or sold from the lease as determined under AS 38.05.180(f). This subsection does not                              
24       apply if the royalty obligation for one or more of the leases in the unit has been                                
25       reduced to 12.5 percent or less under AS 38.05.180(j) for all or part of the calendar                             
26       year for which the annual production tax value is calculated. This subsection does not                            
27       apply to gas produced before 2022 that is used in the state or to gas produced on and                         
28       after January 1, 2022. A reduction under this subsection may not reduce the gross                             
29       value at the point of production below zero.                                                                      
30    * Sec. 43. AS 43.55.160 is amended by adding a new subsection to read:                                             
31            (h)  For oil produced on and after January 1, 2022, except as provided in (b),                               
01       (f), and (g) of this section, for the purposes of AS 43.55.011(e)(3), the annual                                  
02       production tax value of oil taxable under AS 43.55.011(e) produced by a producer                                  
03       during a calendar year                                                                                            
04                 (1)  from leases or properties in the state that include land north of 68                               
05       degrees North latitude is the gross value at the point of production of that oil, less the                        
06       producer's lease expenditures under AS 43.55.165 for the calendar year incurred to                                
07       explore for, develop, or produce oil or gas deposits located in the state north of 68                             
08       degrees North latitude or located in leases or properties in the state that include land                          
09       north of 68 degrees North latitude, as adjusted under AS 43.55.170;                                               
10                 (2)  before or during the last calendar year under AS 43.55.024(b) for                                  
11       which the producer could take a tax credit under AS 43.55.024(a), from leases or                                  
12       properties in the state outside the Cook Inlet sedimentary basin, no part of which is                             
13       north of 68 degrees North latitude, other than leases or properties subject to                                    
14       AS 43.55.011(p), is the gross value at the point of production of that oil, less the                              
15       producer's lease expenditures under AS 43.55.165 for the calendar year incurred to                                
16       explore for, develop, or produce oil or gas deposits located in the state outside the                             
17       Cook Inlet sedimentary basin and south of 68 degrees North latitude, other than oil or                            
18       gas deposits located in a lease or property that includes land north of 68 degrees North                          
19       latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from which                             
20       commercial production has not begun, as adjusted under AS 43.55.170;                                              
21                 (3)  from leases or properties subject to AS 43.55.011(p) is the gross                                  
22       value at the point of production of that oil, less the producer's lease expenditures under                        
23       AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil or                            
24       gas deposits located in leases or properties subject to AS 43.55.011(p) or, before                                
25       January 1, 2027, located in leases or properties in the state outside the Cook Inlet                              
26       sedimentary basin, no part of which is north of 68 degrees North latitude from which                              
27       commercial production has not begun, as adjusted under AS 43.55.170;                                              
28                 (4)  from leases or properties in the state no part of which is north of 68                             
29       degrees North latitude, other than leases or properties subject to (2) or (3) of this                             
30       subsection, is the gross value at the point of production of that oil less the producer's                         
31       lease expenditures under AS 43.55.165 for the calendar year incurred to explore for,                              
01       develop, or produce oil or gas deposits located in the state south of 68 degrees North                            
02       latitude, other than oil or gas deposits located in a lease or property in the state that                         
03       includes land north of 68 degrees North latitude, and excluding lease expenditures that                           
04       are deductible under (2) or (3) of this subsection or would be deductible under (2) or                            
05       (3) of this subsection if not prohibited by (b) of this section, as adjusted under                                
06       AS 43.55.170.                                                                                                     
07    * Sec. 44. AS 43.55.165(e) is amended to read:                                                                     
08            (e)  For purposes of this section, lease expenditures do not include                                         
09                 (1)  depreciation, depletion, or amortization;                                                          
10                 (2)  oil or gas royalty payments, production payments, lease profit                                     
11       shares, or other payments or distributions of a share of oil or gas production, profit, or                        
12       revenue, except that a producer's lease expenditures applicable to oil and gas produced                           
13       from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net                             
14       profit paid to the state under that lease;                                                                        
15                 (3)  taxes based on or measured by net income;                                                          
16                 (4)  interest or other financing charges or costs of raising equity or debt                             
17       capital;                                                                                                          
18                 (5)  acquisition costs for a lease or property or exploration license;                                  
19                 (6)  costs arising from fraud, wilful misconduct, gross negligence,                                     
20       violation of law, or failure to comply with an obligation under a lease, permit, or                               
21       license issued by the state or federal government;                                                                
22                 (7)  fines or penalties imposed by law;                                                                 
23                 (8)  costs of arbitration, litigation, or other dispute resolution activities                           
24       that involve the state or concern the rights or obligations among owners of interests in,                         
25       or rights to production from, one or more leases or properties or a unit;                                         
26                 (9)  costs incurred in organizing a partnership, joint venture, or other                                
27       business entity or arrangement;                                                                                   
28                 (10)  amounts paid to indemnify the state; the exclusion provided by                                    
29       this paragraph does not apply to the costs of obtaining insurance or a surety bond from                           
30       a third-party insurer or surety;                                                                                  
31                 (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                
01                 (12)  an expenditure otherwise deductible under (b) of this section that                                
02       is a result of an internal transfer, a transaction with an affiliate, or a transaction                            
03       between related parties, or is otherwise not an arm's length transaction, unless the                              
04       producer establishes to the satisfaction of the department that the amount of the                                 
05       expenditure does not exceed the fair market value of the expenditure;                                             
06                 (13)  an expenditure incurred to purchase an interest in any corporation,                               
07       partnership, limited liability company, business trust, or any other business entity,                             
08       whether or not the transaction is treated as an asset sale for federal income tax                                 
09       purposes;                                                                                                         
10                 (14)  a tax levied under AS 43.55.011 or 43.55.014;                                                 
11                 (15)  costs incurred for dismantlement, removal, surrender, or                                          
12       abandonment of a facility, pipeline, well pad, platform, or other structure, or for the                           
13       restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in                       
14       conjunction with dismantlement, removal, surrender, or abandonment; a cost is not                                 
15       excluded under this paragraph if the dismantlement, removal, surrender, or                                        
16       abandonment for which the cost is incurred is undertaken for the purpose of replacing,                            
17       renovating, or improving the facility, pipeline, well pad, platform, or other structure;                          
18                 (16)  costs incurred for containment, control, cleanup, or removal in                                   
19       connection with any unpermitted release of oil or a hazardous substance and any                                   
20       liability for damages imposed on the producer or explorer for that unpermitted release;                           
21       this paragraph does not apply to the cost of developing and maintaining an oil                                    
22       discharge prevention and contingency plan under AS 46.04.030;                                                     
23                 (17)  costs incurred to satisfy a work commitment under an exploration                                  
24       license under AS 38.05.132;                                                                                       
25                 (18)  that portion of expenditures, that would otherwise be qualified                                   
26       capital expenditures, as defined in AS 43.55.023, incurred during a calendar year that                            
27       are less than the product of $0.30 multiplied by the total taxable production from each                           
28       lease or property, in BTU equivalent barrels, during that calendar year, except that,                             
29       when a portion of a calendar year is subject to this provision, the expenditures and                              
30       volumes shall be prorated within that calendar year;                                                              
31                 (19)  costs incurred for repair, replacement, or deferred maintenance of                                
01       a facility, a pipeline, a structure, or equipment, other than a well, that results in or is                       
02       undertaken in response to a failure, problem, or event that results in an unscheduled                             
03       interruption of, or reduction in the rate of, oil or gas production; or costs incurred for                        
04       repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or                           
05       equipment, other than a well, that is undertaken in response to, or is otherwise                                  
06       associated with, an unpermitted release of a hazardous substance or of gas; however,                              
07       costs under this paragraph that would otherwise constitute lease expenditures under (a)                           
08       and (b) of this section may be treated as lease expenditures if the department                                    
09       determines that the repair or replacement is solely necessitated by an act of war, by an                          
10       unanticipated grave natural disaster or other natural phenomenon of an exceptional,                               
11       inevitable, and irresistible character, the effects of which could not have been                                  
12       prevented or avoided by the exercise of due care or foresight, or by an intentional or                            
13       negligent act or omission of a third party, other than a party or its agents in privity of                        
14       contract with, or employed by, the producer or an operator acting for the producer, but                           
15       only if the producer or operator, as applicable, exercised due care in operating and                              
16       maintaining the facility, pipeline, structure, or equipment, and took reasonable                                  
17       precautions against the act or omission of the third party and against the consequences                           
18       of the act or omission; in this paragraph,                                                                        
19                      (A)  "costs incurred for repair, replacement, or deferred                                          
20            maintenance of a facility, a pipeline, a structure, or equipment" includes costs                             
21            to dismantle and remove the facility, pipeline, structure, or equipment that is                              
22            being replaced;                                                                                              
23                      (B)  "hazardous substance" has the meaning given in                                                
24            AS 46.03.826;                                                                                                
25                      (C)  "replacement" includes renovation or improvement;                                             
26                 (20)  costs incurred to construct, acquire, or operate a refinery or crude                              
27       oil topping plant, regardless of whether the products of the refinery or topping plant                            
28       are used in oil or gas exploration, development, or production operations; however, if                            
29       a producer owns a refinery or crude oil topping plant that is located on or near the                              
30       premises of the producer's lease or property in the state and that processes the                                  
31       producer's oil produced from that lease or property into a product that the producer                              
01       uses in the operation of the lease or property in drilling for or producing oil or gas, the                       
02       producer's lease expenditures include the amount calculated by subtracting from the                               
03       fair market value of the product used the prevailing value, as determined under                                   
04       AS 43.55.020(f), of the oil that is processed;                                                                    
05                 (21)  costs of lobbying, public relations, public relations advertising, or                             
06       policy advocacy.                                                                                                  
07    * Sec. 45. AS 43.55.900(10) is amended to read:                                                                    
08                 (10)  "gas processing plant" means a facility that                                                      
09                      (A)  extracts and recovers liquid hydrocarbons from a gaseous                                      
10            mixture of hydrocarbons by gas processing; and                                                               
11                      (B)  is located upstream of the inlet of any pipeline                                      
12            transporting gas to a gas treatment plant and upstream of the inlet of any gas                       
13            pipeline system transporting gas to a market;                                                                
14    * Sec. 46. AS 43.55.900(20) is amended to read:                                                                    
15                 (20)  "point of production" means                                                                       
16                      (A)  for oil, the automatic custody transfer meter or device                                       
17            through which the oil enters into the facilities of a carrier pipeline or other                              
18            transportation carrier in a condition of pipeline quality; in the absence of an                              
19            automatic custody transfer meter or device, "point of production" means the                                  
20            mechanism or device to measure the quantity of oil that has been approved by                                 
21            the department for that purpose, through which the oil is tendered and accepted                              
22            in a condition of pipeline quality into the facilities of a carrier pipeline or other                        
23            transportation carrier or into a field topping plant;                                                        
24                      (B)  for gas [, OTHER THAN GAS DESCRIBED IN (C) OF                                                 
25            THIS PARAGRAPH,] that is                                                                                     
26                           (i)  not subjected to or recovered by mechanical                                              
27                 separation or run through a gas processing plant, the furthest                                      
28                 upstream of the first point where the gas is accurately metered, the                            
29                 inlet of any pipeline transporting the gas to a gas treatment plant,                              
30                 or the inlet of any gas pipeline system transporting gas to a market;                               
31                           (ii)  subjected to or recovered by mechanical separation                                      
01                 but not run through a gas processing plant, the furthest upstream of                                
02                 the first point where the gas is accurately metered after completion of                             
03                 mechanical separation, the inlet of any pipeline transporting the gas                             
04                 to a gas treatment plant, or the inlet of any gas pipeline system                                   
05                 transporting gas to a market;                                                                       
06                           (iii)  run through a gas processing plant, the furthest                                   
07                 upstream of the first point where the gas is accurately metered                                     
08                 downstream of the plant, the inlet of any pipeline transporting the                                 
09                 gas to a gas treatment plant, or the inlet of any gas pipeline system                               
10                 transporting gas to a market;                                                                       
11                      [(C)  FOR GAS RUN THROUGH AN INTEGRATED GAS                                                        
12            PROCESSING PLANT AND GAS TREATMENT FACILITY THAT DOES                                                        
13            NOT ACCURATELY METER THE GAS AFTER THE GAS PROCESSING                                                        
14            AND BEFORE THE GAS TREATMENT, THE FIRST POINT WHERE GAS                                                      
15            PROCESSING IS COMPLETED OR WHERE GAS TREATMENT BEGINS,                                                       
16            WHICHEVER IS FURTHER UPSTREAM;]                                                                            
17    * Sec. 47. AS 43.55.900 is amended by adding a new paragraph to read:                                              
18                 (25)  "gas treatment plant" means a facility that performs gas treatment,                               
19       regardless of whether the facility also performs gas processing.                                                  
20    * Sec. 48. AS 43.98.030(c) is amended to read:                                                                     
21            (c)  A taxpayer acquiring a transferable tax credit certificate may use the credit                           
22       or a portion of the credit to offset taxes imposed under AS 21.09.210, AS 21.66.110,                              
23       AS 43.20, AS 43.55.011 [AS 43.55], AS 43.56, AS 43.65, AS 43.75, and AS 43.77.                                
24       Except as provided in (e) of this section, any portion of the credit not used may be                              
25       used at a later period or transferred under (b) of this section.                                                  
26    * Sec. 49. The uncodified law of the State of Alaska is amended by adding a new section to                         
27 read:                                                                                                                   
28       DEVELOPMENT OF A PLAN FOR RESIDENTS TO PARTICIPATE IN THE                                                         
29 OWNERSHIP OF A NORTH SLOPE NATURAL GAS PIPELINE. (a) At the time the                                                    
30 commissioner of natural resources submits the first contract to the legislature for approval                            
31 under AS 38.05.020(b)(11), enacted by sec. 11 of this Act, the commissioner of revenue shall                            
01 present a plan and suggested legislation to allow a resident of the state to participate as a co-                       
02 owner in a North Slope natural gas pipeline. The plan must include the recommendations of                               
03 the commissioner as to                                                                                                  
04            (1)  the means by which a resident may invest in the North Slope natural gas                                 
05 pipeline that may include providing an option for a resident to designate an amount of a                                
06 permanent fund dividend to be deducted for the investment;                                                              
07            (2)  whether the ownership interest in a North Slope natural gas pipeline should                             
08 be acquired from the portion of a North Slope natural gas pipeline acquired by the state,                               
09 through the purchase of stock in a publicly traded corporation that invests in a North Slope                            
10 natural gas pipeline, or some other means;                                                                              
11            (3)  the means for providing notice to a resident receiving an ownership                                     
12 interest that explains the type of ownership interest and the rights and obligations related to                         
13 that ownership interest;                                                                                                
14            (4)  whether the ownership interest received by a resident may be transferred or                             
15 assigned to another person and the means for transferring the interest;                                                 
16            (5)  the means by which the proportional share of a dividend or other income                                 
17 may be distributed to a resident or transferee of an interest if a resident receives an ownership                       
18 interest acquired by the state in a North Slope natural gas pipeline and the state receives a                           
19 dividend or other income from its ownership interest, and whether the payment should be                                 
20 subject to interest if not timely distributed;                                                                          
21            (6)  the means by which the commissioner may identify a publicly traded                                      
22 corporation that has an ownership interest in a North Slope natural gas pipeline that is subject                        
23 to investment by an individual under the proposed plan; and                                                             
24            (7)  the means by which an individual may qualify as a resident for purposes of                              
25 investing in an ownership interest.                                                                                     
26       (b)  In this section, "North Slope natural gas pipeline" means a natural gas pipeline                             
27 project that transports natural gas produced in the state north of 68 degrees North latitude to a                       
28 market in the state or to tidewater for export from the state including a facility in the state for                     
29 liquefying natural gas for transport.                                                                                   
30    * Sec. 50. The uncodified law of the State of Alaska is amended by adding a new section to                         
31 read:                                                                                                                   
01       TRANSITION: REGULATIONS. The Department of Revenue and the Department of                                          
02 Natural Resources may adopt regulations to implement this Act. The regulations take effect                              
03 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the                                 
04 provisions of this Act being implemented.                                                                               
05    * Sec. 51. The uncodified law of the State of Alaska is amended by adding a new section to                         
06 read:                                                                                                                   
07       REVISOR'S INSTRUCTION. The revisor of statutes is instructed to change the catch                                  
08 line of AS 38.05.183 from "Sale of royalty" to "Sale of royalty and of gas delivered to the                             
09 state under AS 43.55.014(b)."                                                                                           
10    * Sec. 52. Sections 1 - 11, 13, 14, 20, 21, 23, 24, 31, 32, and 48 - 50 of this Act take effect                    
11 immediately under AS 01.10.070(c).                                                                                      
12    * Sec. 53. Except as provided in sec. 52 of this Act, this Act takes effect January 1, 2015.