Enrolled SB 138: Relating to the limitation on the value of property taxable by a municipality; relating to the Alaska Gasline Development Corporation; relating to an in-state natural gas pipeline, an Alaska liquefied natural gas project, and associated funds; requiring state agencies and other entities to expedite reviews and actions related to natural gas pipelines and projects; making certain contracts by the Department of Natural Resources and the Department of Law not subject to the State Procurement Code; relating to the authorities and duties of the commissioner of natural resources relating to a North Slope natural gas project, oil and gas and gas only leases, and royalty gas and other gas received by the state including gas received as payment for the production tax on gas; relating to a report and recommendations by the commissioner of natural resources regarding the delivery and availability of North Slope natural gas in the state, including the identification of risks and recommendations for mitigation; relating to the tax on oil and gas production, on oil production, and on gas production; relating to the duties of the commissioner of revenue relating to a North Slope natural gas project and gas received as payment for tax; relating to confidential information and public record status of information provided to or in the custody of the Department of Natural Resources and the Department of Revenue; relating to apportionment factors of the Alaska Net Income Tax Act; amending the definition of gross value at the "point of production" for gas for purposes of the oil and gas production tax; clarifying that the exploration incentive credit, the oil or gas producer education credit, and the film production tax credit may not be taken against the gas production tax paid in gas; relating to the oil or gas producer education credit; requiring the commissioner of revenue to provide a report to the legislature on financing options for state ownership and participation in a North Slope natural gas project; requesting the governor to establish an advisory planning group to advise the governor on municipal involvement in a North Slope natural gas project; relating to the development of a plan by the Alaska Energy Authority for developing infrastructure to deliver affordable energy to areas of the state that will not have direct access to a North Slope natural gas pipeline and a recommendation of a funding source for energy infrastructure development; establishing the Alaska affordable energy fund; requiring the Department of Transportation and Public Facilities to evaluate certain bridges and infrastructure related to an Alaska liquefied natural gas project; requiring the commissioner of revenue to develop a plan and suggest legislation for municipalities, regional corporations, and residents of the state to acquire ownership interests in a North Slope natural gas pipeline project; relating to the duties of the Oil and Gas Competitiveness Review Board; making conforming amendments; and providing for an effective date.
00Enrolled SB 138 01 Relating to the limitation on the value of property taxable by a municipality; relating to the 02 Alaska Gasline Development Corporation; relating to an in-state natural gas pipeline, an 03 Alaska liquefied natural gas project, and associated funds; requiring state agencies and other 04 entities to expedite reviews and actions related to natural gas pipelines and projects; making 05 certain contracts by the Department of Natural Resources and the Department of Law not 06 subject to the State Procurement Code; relating to the authorities and duties of the 07 commissioner of natural resources relating to a North Slope natural gas project, oil and gas 08 and gas only leases, and royalty gas and other gas received by the state including gas received 09 as payment for the production tax on gas; relating to a report and recommendations by the 10 commissioner of natural resources regarding the delivery and availability of North Slope 11 natural gas in the state, including the identification of risks and recommendations for 12 mitigation; relating to the tax on oil and gas production, on oil production, and on gas
01 production; relating to the duties of the commissioner of revenue relating to a North Slope 02 natural gas project and gas received as payment for tax; relating to confidential information 03 and public record status of information provided to or in the custody of the Department of 04 Natural Resources and the Department of Revenue; relating to apportionment factors of the 05 Alaska Net Income Tax Act; amending the definition of gross value at the "point of 06 production" for gas for purposes of the oil and gas production tax; clarifying that the 07 exploration incentive credit, the oil or gas producer education credit, and the film production 08 tax credit may not be taken against the gas production tax paid in gas; relating to the oil or gas 09 producer education credit; requiring the commissioner of revenue to provide a report to the 10 legislature on financing options for state ownership and participation in a North Slope natural 11 gas project; requesting the governor to establish an advisory planning group to advise the 12 governor on municipal involvement in a North Slope natural gas project; relating to the 13 development of a plan by the Alaska Energy Authority for developing infrastructure to deliver 14 affordable energy to areas of the state that will not have direct access to a North Slope natural 15 gas pipeline and a recommendation of a funding source for energy infrastructure 16 development; establishing the Alaska affordable energy fund; requiring the Department of 17 Transportation and Public Facilities to evaluate certain bridges and infrastructure related to an 18 Alaska liquefied natural gas project; requiring the commissioner of revenue to develop a plan 19 and suggest legislation for municipalities, regional corporations, and residents of the state to 20 acquire ownership interests in a North Slope natural gas pipeline project; relating to the duties 21 of the Oil and Gas Competitiveness Review Board; making conforming amendments; and 22 providing for an effective date. 23
01 _______________ 02 * Section 1. AS 29.45.080(c) is amended to read: 03 (c) A municipality may levy and collect a tax on the full and true value of that 04 portion of taxable property taxable under AS 43.56 as assessed by the Department of 05 Revenue which value, when combined with the value of property otherwise taxable by 06 the municipality, does not exceed the product of the percentage determined in (f) of 07 this section [225 PERCENT] of the average per capita assessed full and true value of 08 property in the state multiplied by the number of residents of the taxing municipality. 09 * Sec. 2. AS 29.45.080(d) is amended to read: 10 (d) Each [BY FEBRUARY 1 OF EACH] assessment year, a taxing 11 municipality shall inform the Department of Revenue, by 12 (1) February 1, which method of taxation the municipality will use; 13 and 14 (2) May 1, the 15 (A) total value of the municipality's locally assessed 16 property tax base; and 17 (B) payment amount for the principal of and interest on 18 bonds that the municipality intends to apply in its mill rate calculation for 19 the fiscal year corresponding to the tax year for which the assessment 20 method selected by the municipality under this section will apply. 21 * Sec. 3. AS 29.45.080 is amended by adding a new subsection to read: 22 (f) The percentage in (c) of this section is based on the total tax rate 23 established by the municipality and levied each year under AS 43.56.010(b) and is as 24 follows: 25 If the tax rate determined under AS 43.56.010(b) is: The percentage is: 26 Not more than 18.0 mills 375 percent 27 More than 18.0 mills but not more than 19.0 mills 300 percent 28 More than 19.0 mills 225 percent 29 * Sec. 4. AS 29.45.090(b) is amended to read: 30 (b) A municipality, or combination of municipalities occupying the same 31 geographical area, in whole or in part, may not levy taxes
01 (1) that will result in tax revenues from all sources exceeding $1,500 a 02 year for each person residing within the municipal boundaries; or 03 (2) on [UPON] value that, when combined with the value of property 04 otherwise taxable by the municipality, exceeds the product of the percentage 05 determined in (e) of this section [225 PERCENT] of the average per capita assessed 06 full and true value of property in the state multiplied by the number of residents of the 07 taxing municipality. 08 * Sec. 5. AS 29.45.090(c) is amended to read: 09 (c) The commissioner shall apportion the lawful levy and equitably divide the 10 tax revenues on the basis of need, services performed, and other considerations in the 11 public interest if two or more municipalities occupying the same geographical area, in 12 whole or in part, attempt to levy a tax 13 (1) the combined levy of which would result in tax revenues from all 14 sources exceeding $1,500 a year for each person residing within the municipal 15 boundaries; or 16 (2) on [UPON] value that, when combined with the value of property 17 otherwise taxable by the municipality, exceeds the product of the percentage 18 determined in (e) of this section [225 PERCENT] of the average per capita assessed 19 full and true value of property in the state multiplied by the number of residents of the 20 taxing municipality. 21 * Sec. 6. AS 29.45.090 is amended by adding a new subsection to read: 22 (e) The percentage in (b) and (c) of this section is based on the total tax rate 23 established by the municipality and levied each year under AS 43.56.010(b) and is as 24 follows: 25 If the tax rate determined under AS 43.56.010(b) is: The percentage is: 26 Not more than 18.0 mills 375 percent 27 More than 18.0 mills but not more than 19.0 mills 300 percent 28 More than 19.0 mills 225 percent 29 * Sec. 7. AS 31.25.005 is amended to read: 30 Sec. 31.25.005. Purpose. The corporation shall, for the benefit of the state, to 31 the fullest extent possible,
01 (1) develop and have primary responsibility for developing natural 02 gas pipelines, an Alaska liquefied natural gas project, and other transportation 03 mechanisms to deliver natural gas in-state for the maximum benefit of the people 04 of the state; 05 (2) when developing natural gas pipelines, an Alaska liquefied 06 natural gas project, and other transportation mechanisms to deliver natural gas 07 in-state, provide economic benefits in the state and revenue to the state; 08 (3) assist the Department of Natural Resources and the 09 Department of Revenue to maximize the value of the state's royalty natural gas, 10 natural gas delivered to the state as payment of tax, and other natural gas 11 received by the state; 12 (4) advance an in-state natural gas pipeline as described in the July 1, 13 2011, project plan prepared under former AS 38.34.040 by the corporation while a 14 subsidiary of the Alaska Housing Finance Corporation, with modifications determined 15 by the corporation to be appropriate to develop, finance, construct, and operate an in- 16 state natural gas pipeline in a safe, prudent, economical, and efficient manner, for the 17 purpose of making natural gas, including propane and other hydrocarbons associated 18 with natural gas other than oil, available to Fairbanks, the Southcentral region of the 19 state, and other communities in the state at the lowest rates possible; 20 (5) advance an Alaska liquefied natural gas project by developing 21 infrastructure and providing related services, including services related to 22 transportation, liquefaction, a marine terminal, marketing, and commercial 23 support; if the corporation provides a service under this paragraph to the state, a 24 public corporation or instrumentality of the state, a political subdivision of the 25 state, or another entity of the state, the corporation may not charge a fee for the 26 service in an amount greater than the amount necessary to reimburse the 27 corporation for the cost of the service; 28 (6) [(2)] endeavor to develop natural gas pipelines and other 29 transportation mechanisms to deliver natural gas, including propane and other 30 hydrocarbons associated with natural gas other than oil, to public utility and industrial 31 customers in areas of the state to which the natural gas, including propane and other
01 hydrocarbons associated with natural gas other than oil, may be delivered at 02 commercially reasonable rates; and 03 (7) [(3)] endeavor to develop natural gas pipelines and other 04 transportation mechanisms that offer commercially reasonable rates for shippers and 05 access for shippers who produce natural gas, including propane and other 06 hydrocarbons associated with natural gas other than oil, in the state. 07 * Sec. 8. AS 31.25.010 is amended to read: 08 Sec. 31.25.010. Structure. The Alaska Gasline Development Corporation is a 09 public corporation and government instrumentality acting in the best interest of the 10 state for the purposes required by AS 31.25.005, located for administrative 11 purposes in the Department of Commerce, Community, and Economic Development, 12 but having a legal existence independent of and separate from the state. The 13 corporation may not be terminated as long as it has bonds, notes, or other obligations 14 outstanding. The corporation may dissolve when no bonds, notes, or other obligations 15 of the corporation or a subsidiary of the corporation are outstanding and the 16 corporation or a subsidiary of the corporation is no longer engaged in the 17 development, financing, construction, or operation of an in-state natural gas pipeline 18 or an Alaska liquefied natural gas project. Upon termination of the corporation, its 19 rights and property pass to the state. 20 * Sec. 9. AS 31.25.020(a) is amended to read: 21 (a) The corporation shall be governed by a board of directors consisting of 22 (1) five public members; and 23 (2) two individuals designated by the governor that are each the head 24 of a principal department of the state, except that the commissioner of natural 25 resources and the commissioner of revenue may not be designated to serve on the 26 board [UNLESS THE PROJECT FOR WHICH A LICENSE IS ISSUED UNDER 27 AS 43.90 HAS BEEN ABANDONED OR IS NO LONGER RECEIVING THE 28 INDUCEMENTS IN AS 43.90.110(a) OR THE COMMISSIONER OF NATURAL 29 RESOURCES AND THE COMMISSIONER OF REVENUE ARE NO LONGER 30 SIGNATORIES ON A VALID CONTRACT UNDER AS 43.90]. 31 * Sec. 10. AS 31.25.040 is amended by adding new subsections to read:
01 (c) To the maximum extent practicable, the board shall 02 (1) maximize the efficient use of state resources; and 03 (2) establish appropriate separation within the corporation by 04 separating personnel and functions and by other means to the extent that separation 05 may be required by contract or applicable law for the purpose of screening and 06 preventing the exchange of commercially sensitive information when developing an 07 in-state natural gas pipeline, an Alaska liquefied natural gas project, and other 08 transportation mechanisms to deliver natural gas in the state. 09 (d) The board may appoint a program director for an Alaska liquefied natural 10 gas project. The board may appoint a separate program director for an in-state natural 11 gas pipeline as described in the July 1, 2011, project plan prepared under former 12 AS 38.34.040 and defined in AS 31.25.390. A program director appointed under this 13 section shall 14 (1) serve at the pleasure of the board; and 15 (2) report to the executive director of the corporation. 16 * Sec. 11. AS 31.25.050 is amended to read: 17 Sec. 31.25.050. Legal counsel. Except as provided in (b) of this section, the 18 [THE] corporation shall retain legal counsel to advise the corporation in legal matters 19 and represent it in litigation. 20 * Sec. 12. AS 31.25.050 is amended by adding a new subsection to read: 21 (b) The attorney general shall 22 (1) be the legal counsel for the corporation for legal services related to 23 the development of contracts and agreements by the corporation that relate to an 24 Alaska liquefied natural gas project; and 25 (2) consult with the corporation when procuring outside counsel for 26 legal services for the corporation related to an Alaska liquefied natural gas project. 27 * Sec. 13. AS 31.25.080(a) is amended to read: 28 (a) In addition to other powers granted in this chapter, the corporation may 29 (1) determine the form of ownership and the operating structure of an 30 in-state natural gas pipeline developed by the corporation and may enter into 31 agreements with other persons for joint ownership, joint operation, or both of an in-
01 state natural gas pipeline or an Alaska liquefied natural gas project; 02 (2) plan, finance, construct, develop, acquire, maintain, and operate a 03 pipeline system and other transportation mechanism, including pipelines, compressors, 04 storage facilities, and other related facilities, equipment, and works of public 05 improvement, in the state to facilitate production, transportation, and delivery of 06 natural gas or other related natural resources to the point of consumption or to the 07 point of distribution for consumption; 08 (3) lease or rent facilities, structures, and properties; 09 (4) exercise the power of eminent domain and file a declaration of 10 taking under AS 09.55.240 - 09.55.460 to acquire land or an interest in land that is 11 necessary for an in-state natural gas pipeline or an Alaska liquefied natural gas 12 project; the exercise of powers by the corporation under this paragraph may not 13 exceed the permissible exercise of the powers by the state; 14 (5) acquire, by purchase, lease, or gift, land, structures, real or personal 15 property, an interest in property, a right-of-way, a franchise, an easement, or other 16 interest in land, or an interest in or right to capacity in a pipeline system determined to 17 be necessary or convenient for the development, financing, construction, or operation 18 of an in-state natural gas pipeline project or an Alaska liquefied natural gas project 19 or part of an in-state natural gas pipeline project or an Alaska liquefied natural gas 20 project; 21 (6) transfer or otherwise dispose of all or part of an in-state natural gas 22 pipeline project, an Alaska liquefied natural gas project, or [DEVELOPED BY 23 THE CORPORATION OR TRANSFER OR OTHERWISE DISPOSE OF] an interest 24 in an asset of the corporation; 25 (7) elect to provide transportation of natural gas as a contract carrier, 26 common carrier, or otherwise; 27 (8) provide light, water, security, and other services for property of the 28 corporation; 29 (9) conduct hearings to gather and develop data consistent with the 30 purpose and powers of the corporation; 31 (10) advocate for new pipeline capacity before the Federal Energy
01 Regulatory Commission; 02 (11) make and execute agreements, contracts, and other instruments 03 necessary or convenient in the exercise of the powers and functions of the corporation 04 under this chapter, including a contract with a person, firm, corporation, governmental 05 agency, or other entity; 06 (12) sue and be sued in its own name; 07 (13) adopt an official seal; 08 (14) adopt bylaws for the regulation of its affairs and the conduct of its 09 business and adopt regulations and policies in connection with the performance of its 10 functions and duties; 11 (15) employ fiscal consultants, engineers, attorneys, appraisers, and 12 other consultants and employees that may, in the judgment of the corporation, be 13 required and fix and pay their compensation from funds available to the corporation; 14 (16) procure insurance against a loss in connection with its operation; 15 (17) borrow money as provided in this chapter to carry out its 16 corporate purposes and issue its obligations as evidence of borrowing; 17 (18) include in a borrowing the amounts necessary to pay financing 18 charges, to pay interest on the obligations, and to pay the interest, consultant, advisory, 19 and legal fees, and other expenses that are necessary or incident to the borrowing; 20 (19) receive, administer, and comply with the conditions and 21 requirements of an appropriation, gift, grant, or donation of property or money; 22 (20) do all acts and things necessary, convenient, or desirable to carry 23 out the powers expressly granted or necessarily implied in this chapter; 24 (21) invest or reinvest, subject to its contracts with noteholders and 25 bondholders, money or funds held by the corporation, including funds in the in-state 26 natural gas pipeline fund (AS 31.25.100) and the Alaska liquefied natural gas 27 project fund (AS 31.25.110), in obligations or other securities or investments in 28 which banks or trust companies in the state may legally invest funds held in reserves 29 or sinking funds or funds not required for immediate disbursement, and in certificates 30 of deposit or time deposits secured by obligations of, or guaranteed by, the state or the 31 United States;
01 (22) enter into, as it determines to be necessary or appropriate, any 02 swap or hedge, cap, or other contract providing for payments based on levels of or 03 changes in interest rates or indices or in the cost or price of any commodity, supply, or 04 expense expected to be used or incurred in connection with the acquisition, 05 construction, or operation of any facility or property owned, leased, or operated by the 06 corporation, or an option with respect to any of the foregoing; 07 (23) except as provided in (g) of this section, acquire an ownership 08 or participation interest in an Alaska liquefied natural gas project, natural gas 09 treatment facilities, natural gas pipeline facilities, liquefaction facilities, marine 10 terminal facilities related to the infrastructure of an Alaska liquefied natural gas 11 project, or an entity or joint venture that has an ownership interest in or is 12 engaged in the planning, financing, acquisition, maintenance, construction, and 13 operation of an Alaska liquefied natural gas project; 14 (24) after consultation with the commissioner of revenue and the 15 commissioner of natural resources, enter into contracts relating to an Alaska 16 liquefied natural gas project, including contracts for services related to 17 operation, marketing, transportation, gas treatment, marine terminal operation, 18 or liquefaction. 19 * Sec. 14. AS 31.25.080(e) is amended to read: 20 (e) If commitments to acquire firm transportation capacity for the in-state 21 natural gas pipeline are received in an open season conducted by the corporation, the 22 corporation shall, within 10 days after accepting and executing the written 23 commitments received during the open season, report the results of the open season to 24 the president of the senate and the speaker of the house of representatives and inform 25 the public of the results of the open season through publication on the Internet website 26 of the corporation and in a press release or other announcement to the media. The 27 results made public must include the name of each prospective shipper, the amount of 28 capacity allocated, and the period of the commitment. If the corporation determines 29 that the commitments received during the open season are not sufficient to permit the 30 corporation to continue the development or construction of the natural gas pipeline, 31 the corporation shall report that to the legislature within 30 days.
01 * Sec. 15. AS 31.25.080 is amended by adding a new subsection to read: 02 (g) The power in (a)(23) of this section may not be exercised by an entity or 03 subsidiary of the corporation that is advancing the development of an in-state natural 04 gas pipeline. 05 * Sec. 16. AS 31.25.090 is amended by adding a new subsection to read: 06 (i) Subject to limitations on the disclosure of confidential information in (g) 07 and (h) of this section, the corporation shall provide to the commissioner of natural 08 resources and the commissioner of revenue access to information that is related to the 09 development of contracts under AS 38.05.020(b)(10) and (11). 10 * Sec. 17. AS 31.25.100 is amended to read: 11 Sec. 31.25.100. In-state natural gas pipeline fund. The in-state natural gas 12 pipeline fund is established in the corporation and consists of money appropriated to 13 it. The corporation shall determine fund management and may contract with the 14 Department of Revenue for fund management. Unless otherwise provided by law, 15 money appropriated to the fund lapses into the general fund on the day this section is 16 repealed. Interest and other income received on money in the fund shall be separately 17 accounted for and may be appropriated to the fund. The corporation may use money 18 appropriated to the fund without further appropriation for the cost of managing the 19 fund and for the planning, financing, development, acquisition, maintenance, 20 construction, and operation of the [AN] in-state natural gas pipeline described in 21 AS 31.25.005(4) and for the purposes in AS 31.25.005(4), (6), and (7). 22 * Sec. 18. AS 31.25 is amended by adding a new section to read: 23 Sec. 31.25.110. Alaska liquefied natural gas project fund. The Alaska 24 liquefied natural gas project fund is established in the corporation and consists of 25 money appropriated to it. The corporation shall determine fund management and may 26 contract with the Department of Revenue for fund management. If money is 27 appropriated to the fund to finance the cost of an Alaska liquefied natural gas project, 28 the corporation shall create an account in the fund for that purpose and hold the money 29 appropriated for that purpose in that account. Interest and other income received on 30 money in the fund shall be separately accounted for and may be appropriated to the 31 fund. The corporation may use money appropriated to the fund without further
01 appropriation for the purpose of managing the fund, for purposes related to an Alaska 02 liquefied natural gas project, and for the purpose of transferring net revenue received 03 by the corporation related to equity interests, contracts, and other activities to the 04 appropriate fund of the state as determined by the commissioner of revenue in 05 consultation with the commissioner of natural resources. 06 * Sec. 19. AS 31.25.120 is amended to read: 07 Sec. 31.25.120. Creation of subsidiaries. The corporation may create 08 subsidiary corporations for the purpose of developing, constructing, operating, and 09 financing in-state natural gas pipeline projects or other transportation mechanisms; for 10 the purpose of aiding in the development, construction, operation, and financing of in- 11 state natural gas pipeline projects; or for the purpose of acquiring [THE STATE'S 12 ROYALTY SHARE OF NATURAL GAS,] natural gas from the North Slope, and 13 natural gas from other regions of the state, including the state's outer continental shelf, 14 and making that natural gas available to markets in the state, including the delivery of 15 natural gas, including propane and other hydrocarbons associated with natural gas 16 other than oil, to coastal communities in the state, or for export. Subject to the 17 limitations for the use of money appropriated to the in-state natural gas pipeline 18 fund (AS 31.25.100) and the Alaska liquefied natural gas project fund 19 (AS 31.25.110), the [A SUBSIDIARY CORPORATION CREATED UNDER THIS 20 SECTION MAY BE INCORPORATED UNDER AS 10.20.146 - 10.20.166. THE] 21 corporation may transfer assets of the corporation to a subsidiary created under this 22 section. A subsidiary created under this section may borrow money and issue bonds as 23 evidence of that borrowing and has all the powers of the corporation that the 24 corporation grants to it. Unless otherwise provided by the corporation, the debts, 25 liabilities, and obligations of a subsidiary corporation created under this section are not 26 the debts, liabilities, or obligations of the corporation. 27 * Sec. 20. AS 31.25.140(c) is amended to read: 28 (c) To further ensure effective budgetary decision making by the legislature, 29 the board shall 30 (1) annually review the corporation's assets, including the assets of the 31 in-state natural gas pipeline fund under AS 31.25.100 and the Alaska liquefied
01 natural gas project fund under AS 31.25.110, to determine whether assets of the 02 corporation exceed an amount required to fulfill the purposes of the corporation as 03 defined in this chapter; in making its review, the board shall determine whether, and to 04 what extent, assets in excess of the amount required to fulfill the purposes of the 05 corporation during the next fiscal year are available without 06 (A) breaching an agreement entered into by the corporation; 07 (B) materially impairing the operations or financial integrity of 08 the corporation; or 09 (C) materially affecting the ability of the corporation to fulfill 10 the purposes of the corporation as defined in this chapter; 11 (2) specifically identify in the corporation's assets the amounts that the 12 board believes are necessary to meet the requirements of (1)(C) of this subsection; and 13 (3) present to the legislature by January 10 of each year a complete 14 accounting of all assets of the corporation, including assets of the in-state natural gas 15 pipeline fund under AS 31.25.100 and the Alaska liquefied natural gas project 16 fund under AS 31.25.110, and a report of the review and determination made under 17 (1) and (2) of this subsection; the accounting shall be audited by an independent 18 outside auditor. 19 * Sec. 21. AS 31.25.390 is amended by adding a new paragraph to read: 20 (7) "Alaska liquefied natural gas project" means a natural gas project 21 as described in AS 31.25.005(5) that includes collectively, the Prudhoe Bay unit gas 22 transmission line, the Point Thomson unit gas transmission line, a gas pipeline, the gas 23 treatment plant, a liquefied natural gas plant, and a marine terminal; in this paragraph, 24 (A) "gas pipeline" 25 (i) means the main natural gas pipeline from the outlet 26 flange of the gas treatment plant on the North Slope to the inlet flange 27 of the liquefied natural gas plant located in the Southcentral region of 28 the state, which shall have offtake points along the pipeline for 29 deliveries of gas in the state; 30 (ii) does not include any gas lines downstream of any 31 offtake point between the gas treatment plant and the liquefied natural
01 gas plant; 02 (B) "gas treatment plant" means those facilities and related 03 activities required to receive natural gas from the Prudhoe Bay unit gas 04 transmission line, the Point Thomson unit gas transmission line, and other 05 facilities, treat the natural gas to pipeline specifications, dispose of or deliver 06 by-products, deliver liquid products for further transportation, and deliver 07 treated natural gas for transportation through the gas pipeline; 08 (C) "liquefied natural gas plant" means the facility for 09 liquefying natural gas and includes structures, equipment, underlying land 10 rights, other associated systems, storage, and facilities for off-loading liquefied 11 natural gas; 12 (D) "marine terminal" means the terminal and those facilities 13 required to receive liquefied natural gas from the boundary of the liquefied 14 natural gas plant for marine transportation, including auxiliary vessels used in 15 the operation of the terminal; 16 (E) "Point Thomson unit gas transmission line" means a natural 17 gas transmission line from the outlet flange of the Point Thomson unit 18 production facility to the inlet flange of the gas treatment plant; and 19 (F) "Prudhoe Bay unit gas transmission line" means a natural 20 gas transmission line from the outlet flange of the Prudhoe Bay unit central gas 21 facility to the inlet flange of the gas treatment plant. 22 * Sec. 22. AS 36.30.850(b) is amended by adding new paragraphs to read: 23 (47) contracts for professional and technical services by the 24 Department of Natural Resources to support the development of agreements and 25 contracts under AS 38.05.020(b)(10) and (11); 26 (48) contracts of the Department of Law developed with client 27 participation for legal services related to an Alaska liquefied natural gas project as that 28 project is defined in AS 31.25.390, except that, to the extent practicable, the 29 Department of Law shall use the procurement process under AS 36.30.320 with the 30 participation of the client. 31 * Sec. 23. AS 37.05 is amended by adding a new section to article 6 to read:
01 Sec. 37.05.610. Alaska affordable energy fund. (a) The Alaska affordable 02 energy fund is created as a special account in the general fund. The fund consists of 03 the amount determined and deposited in the fund under (b) of this section and interest 04 earned on the fund balance. The purpose of the fund is to provide a source from which 05 the legislature may appropriate money to develop infrastructure to deliver energy to 06 areas of the state that are not expected to have or do not have direct access to a North 07 Slope natural gas pipeline. 08 (b) The amount to be deposited in (a) of this section is 20 percent of the 09 revenue received from the state's royalty gas transported in an Alaska liquefied natural 10 gas project that remains after the payment to the Alaska permanent fund under 11 AS 37.13.010. 12 (c) The legislature may make appropriations from the Alaska affordable 13 energy fund for the purpose described in (a) of this section. 14 (d) Nothing in this section creates a dedicated fund. 15 (e) In this section, 16 (1) "Alaska liquefied natural gas project" has the meaning given in 17 AS 31.25.390; 18 (2) "North Slope natural gas pipeline" has the meaning given in 19 AS 42.06.630. 20 * Sec. 24. AS 38.05.020(b) is amended to read: 21 (b) The commissioner may 22 (1) establish reasonable procedures and adopt reasonable regulations 23 necessary to carry out this chapter and, whenever necessary, issue directives or orders 24 to the director to carry out specific functions and duties; regulations adopted by the 25 commissioner shall be adopted under AS 44.62 (Administrative Procedure Act); 26 orders by the commissioner classifying land, issued after January 3, 1959, are not 27 required to be adopted under AS 44.62 (Administrative Procedure Act); 28 (2) enter into agreements considered necessary to carry out the 29 purposes of this chapter, including agreements with federal and state agencies; 30 (3) review any order or action of the director; 31 (4) exercise the powers and do the acts necessary to carry out the
01 provisions and objectives of this chapter; 02 (5) notwithstanding the provisions of any other section of this chapter, 03 grant an extension of the time within which payments due on any exploration license, 04 lease, or sale of state land, minerals, or materials may be made, including payment of 05 rental and royalties, on a finding that compliance with the requirements is or was 06 prevented by reason of war, riots, or acts of God; 07 (6) classify tracts for agricultural uses; 08 (7) after consulting with the Board of Agriculture and Conservation 09 (AS 03.09.010), waive, postpone, or otherwise modify the development requirements 10 of a contract for the sale of agricultural land if 11 (A) the land is inaccessible by road; or 12 (B) transportation, marketing, and development costs render 13 the required development uneconomic; 14 (8) reconvey or relinquish land or an interest in land to the federal 15 government if 16 (A) the land is described in an amended application for an 17 allotment under 43 U.S.C. 1617; and 18 (B) the reconveyance or relinquishment is 19 (i) for the purposes provided in 43 U.S.C. 1617; and 20 (ii) in the best interests of the state; 21 (9) lead and coordinate all matters relating to the state's review and 22 authorization of resource development projects; 23 (10) enter into commercial agreements with a duration of not more 24 than two years for project services related to a North Slope natural gas project; 25 (11) in consultation with the commissioner of revenue, participate 26 in the negotiation of agreements that include balancing, marketing, disposition of 27 natural gas, and offtake and contracts and development of terms for inclusion in 28 those proposed agreements and contracts associated with a North Slope natural 29 gas project; an agreement or contract negotiated under this paragraph to which 30 the state is a party is not effective unless the legislature authorizes the governor 31 to execute the agreement or contract;
01 (12) enter into confidentiality agreements to maintain the 02 confidentiality of information related to contract negotiations and contract 03 implementation associated with a North Slope natural gas project; information 04 under those confidentiality agreements is not subject to AS 40.25.100 - 40.25.295 05 (Alaska Public Records Act), except that 06 (A) the terms of a proposed contract that the commissioner 07 presents to the legislature for the purpose of obtaining authorization for 08 the governor to execute are not confidential and must be made available to 09 the public at least 90 days before the proposed effective date for the terms; 10 and 11 (B) the commissioner may share confidential information 12 obtained under this paragraph with members of the legislature, their 13 agents, and contractors on request under confidentiality agreements, 14 either in committees held in executive session or individually; 15 (13) consult with the Alaska Gasline Development Corporation in 16 the development of agreements or contracts under (10) or (11) of this subsection 17 for project services related to a gas treatment plant, pipeline, liquefaction facility, 18 marine terminal, or marine transportation services necessary to transport 19 natural gas to market; 20 (14) exercise the powers and do the acts necessary to carry out the 21 provisions and objectives of AS 43.90 that relate to this chapter. 22 * Sec. 25. AS 38.05.020(b), as amended by sec. 24 of this Act, is amended to read: 23 (b) The commissioner may 24 (1) establish reasonable procedures and adopt reasonable regulations 25 necessary to carry out this chapter and, whenever necessary, issue directives or orders 26 to the director to carry out specific functions and duties; regulations adopted by the 27 commissioner shall be adopted under AS 44.62 (Administrative Procedure Act); 28 orders by the commissioner classifying land, issued after January 3, 1959, are not 29 required to be adopted under AS 44.62 (Administrative Procedure Act); 30 (2) enter into agreements considered necessary to carry out the 31 purposes of this chapter, including agreements with federal and state agencies;
01 (3) review any order or action of the director; 02 (4) exercise the powers and do the acts necessary to carry out the 03 provisions and objectives of this chapter; 04 (5) notwithstanding the provisions of any other section of this chapter, 05 grant an extension of the time within which payments due on any exploration license, 06 lease, or sale of state land, minerals, or materials may be made, including payment of 07 rental and royalties, on a finding that compliance with the requirements is or was 08 prevented by reason of war, riots, or acts of God; 09 (6) classify tracts for agricultural uses; 10 (7) after consulting with the Board of Agriculture and Conservation 11 (AS 03.09.010), waive, postpone, or otherwise modify the development requirements 12 of a contract for the sale of agricultural land if 13 (A) the land is inaccessible by road; or 14 (B) transportation, marketing, and development costs render 15 the required development uneconomic; 16 (8) reconvey or relinquish land or an interest in land to the federal 17 government if 18 (A) the land is described in an amended application for an 19 allotment under 43 U.S.C. 1617; and 20 (B) the reconveyance or relinquishment is 21 (i) for the purposes provided in 43 U.S.C. 1617; and 22 (ii) in the best interests of the state; 23 (9) lead and coordinate all matters relating to the state's review and 24 authorization of resource development projects; 25 (10) enter into commercial agreements with a duration of not more 26 than two years for project services related to a North Slope natural gas project; 27 (11) in consultation with the commissioner of revenue, participate in 28 the negotiation of agreements that include balancing, marketing, disposition of natural 29 gas, and offtake and contracts and development of terms for inclusion in those 30 proposed agreements and contracts associated with a North Slope natural gas project; 31 an agreement or contract negotiated under this paragraph to which the state is a party
01 is not effective unless the legislature authorizes the governor to execute the agreement 02 or contract; 03 (12) enter into confidentiality agreements to maintain the 04 confidentiality of information related to contract negotiations and contract 05 implementation associated with a North Slope natural gas project; information under 06 those confidentiality agreements is not subject to AS 40.25.100 - 40.25.295 (Alaska 07 Public Records Act), except that 08 (A) the terms of a proposed contract that the commissioner 09 presents to the legislature for the purpose of obtaining authorization for the 10 governor to execute are not confidential and must be made available to the 11 public at least 90 days before the proposed effective date for the terms; and 12 (B) the commissioner may share confidential information 13 obtained under this paragraph with members of the legislature, their agents, 14 and contractors on request under confidentiality agreements, either in 15 committees held in executive session or individually; 16 (13) consult with the Alaska Gasline Development Corporation in the 17 development of agreements or contracts under (10) or (11) of this subsection for 18 project services related to a gas treatment plant, pipeline, liquefaction facility, marine 19 terminal, or marine transportation services necessary to transport natural gas to 20 market; 21 (14) in consultation with the commissioner of revenue, take 22 custody of gas delivered to the state under AS 43.55.014(b) and manage the 23 project services and disposition and sale of that gas; 24 (15) exercise the powers and do the acts necessary to carry out the 25 provisions and objectives of AS 43.90 that relate to this chapter. 26 * Sec. 26. AS 38.05 is amended by adding a new section to read: 27 Sec. 38.05.023. Terms in an agreement or contract related to a North 28 Slope natural gas project. (a) An agreement or contract to which the state or an 29 entity of the state is a party that is negotiated under AS 38.05.020(b)(11) must include 30 a requirement that the state or an entity of the state shall have access to data developed 31 under the agreement or contract in which the state or an entity of the state has directly
01 participated financially. Access by the state or an entity of the state to the data must be 02 on the same or substantially similar terms applicable to any other party in a North 03 Slope natural gas project. 04 (b) A proposed agreement or contract associated with a North Slope natural 05 gas project may not include a provision that changes the property tax on property that 06 was previously taxable under AS 43.56. 07 (c) A proposed agreement or contract associated with a North Slope natural gas 08 project must provide the means for allocating infrastructure costs between the state 09 and other parties in the project. The allocation must take into consideration the extent 10 to which infrastructure is used by the project and used by the public and the difference 11 between the normal expected or actual life-cycle costs for the infrastructure as used by 12 the project and the expected or actual life-cycle costs of the same infrastructure if 13 subject only to general public use. The proposed agreement or contract may not 14 require the state to pay infrastructure costs that are directly related to the project and 15 not designed for general public use in a proportionate amount that is greater than the 16 state's share of participation in the project. 17 (d) An agreement or contract to which the state or an entity of the state is a 18 party that is negotiated under AS 38.05.020(b)(11) must include principles based on 19 commercially reasonable terms for delivering natural gas to public utilities in the state 20 when the demand for natural gas by the utilities exceeds the amount of the state's 21 royalty natural gas and natural gas delivered to the state as payment of tax that is 22 available in a North Slope natural gas project. 23 * Sec. 27. AS 38.05.180(i) is amended to read: 24 (i) The commissioner may provide for the establishment of an exploration 25 incentive credit system under which a lessee of state land drilling an exploratory well 26 on that land may earn credits based on [UPON] the footage drilled and the region in 27 which the well is situated. The commissioner may also provide for credits to be earned 28 by persons performing geophysical work on state land, if that work is performed 29 during the two seasons immediately preceding an announced lease sale and on land 30 included within the sale area and the geophysical information is made public 31 following the sale. Credits may not exceed 50 percent of the cost of the drilling or
01 geophysical work. Credits may be used during a limited period established by the 02 commissioner and may be assigned during that period. Credits may be applied against 03 (1) royalty and rental payments for oil and gas or for gas only payable to the state or 04 (2) taxes payable under AS 43.55.011 [AS 43.55]. A credit may not exceed 50 percent 05 of the payment toward which it is being applied. Amounts due the Alaska permanent 06 fund (AS 37.13.010) shall be calculated before the application of credits under this 07 subsection. 08 * Sec. 28. AS 38.05.180 is amended by adding new subsections to read: 09 (hh) Notwithstanding (j) of this section, the commissioner may propose 10 modification to a lease from which a lessee has committed gas from that lease to a 11 North Slope natural gas project. A modification may be made under this subsection 12 only after the commissioner makes the written determination under (ii) of this section 13 that the lease may be modified. If a modification is made, the modification shall be in 14 effect during the initial project term that has acquired the major permits required for 15 the work plan and budget considered by the commissioner in the written determination 16 under (ii) of this section. A modification under this subsection may 17 (1) relate to switching between taking the state's royalty gas in value 18 and in kind to ensure that the lessee, the state, or another person shall bear 19 proportionate costs for treatment, transportation, and liquefaction to the state's royalty 20 gas or gas delivered to the state under AS 43.55.014, and the state's actions do not 21 unreasonably interfere with the long-term marketing of natural gas by the lessee, the 22 state, or another person; 23 (2) provide a method for establishing a fair market value for each 24 component of the state's royalty gas and appropriate adjustments to reflect fair market 25 deductions for reasonable costs for treatment, transportation, and liquefaction for the 26 state's royalty gas from the North Slope to the destination market; in this paragraph, 27 "reasonable costs for treatment, transportation, and liquefaction" may not be greater 28 than actual costs; 29 (3) modify net profit shares for oil and gas and sliding scale royalty 30 rates for gas by establishing fixed royalty rates that yield a value to the state that the 31 commissioner determines to be not less than the value the state would have received
01 under the terms of the lease before a modification under this subsection. 02 (ii) Before making a modification to a lease under (hh) of this section, the 03 commissioner shall make a written determination that the lease may be modified. The 04 determination by the commissioner must be based on a clear and convincing showing 05 by the lessee that 06 (1) the modification 07 (A) is in the best interests of the state; and 08 (B) will materially improve the likelihood of a successful North 09 Slope natural gas project; 10 (2) a North Slope natural gas project has sufficient 11 (A) financial commitment for a work plan and budget 12 necessary to support major permits and regulatory filings required by state and 13 federal agencies; and 14 (B) commitment of gas by lessees; 15 (3) the lease will produce hydrocarbons that will be transported on a 16 North Slope natural gas project during the initial project term; and 17 (4) the lessee or an affiliate of the lessee has offered to purchase, 18 dispose of, or market the state's royalty gas taken in kind and gas delivered to the state 19 under AS 43.55.014 on the same or substantially similar terms as the lessee or an 20 affiliate of the lessee sells, disposes of, or markets the lessee's gas. 21 * Sec. 29. AS 38.05.183(a) is amended to read: 22 (a) The sale, exchange, or other disposal of a mineral obtained by the state as a 23 royalty under AS 38.05.182, [OR] the sale, exchange, or other disposal in whole or in 24 part of a right to receive future mineral production under a state lease under this 25 chapter, or the sale, exchange, or other disposal of gas delivered to the state under 26 AS 43.55.014(b) shall be by competitive bid and the sale, exchange, or other disposal 27 made to the highest responsible bidder, except that competitive bidding is not required 28 when the commissioner, after prior written notice to the Alaska Royalty Oil and Gas 29 Development Advisory Board under AS 38.06.050, determines that the best interest of 30 the state does not require it or that no competition exists. 31 * Sec. 30. AS 38.05.183(c) is amended to read:
01 (c) If the commissioner determines that a sale, exchange, or other disposal of a 02 mineral obtained by the state as a royalty under AS 38.05.182, [OR] of a right to 03 receive future mineral production under a state lease under this chapter, or of gas 04 delivered to the state under AS 43.55.014(b) shall be made otherwise than by 05 competitive bid, and the Alaska Royalty Oil and Gas Development Advisory Board 06 has been notified in writing of that determination, the commissioner shall make public 07 in writing the specific findings and conclusions on [UPON] which that determination 08 is based. 09 * Sec. 31. AS 38.05.183(d) is amended to read: 10 (d) Oil or gas taken in kind by the state as its royalty share or gas delivered to 11 the state under AS 43.55.014(b) may not be sold or otherwise disposed of for export 12 from the state until the commissioner determines that the [ROYALTY-IN-KIND] oil 13 or gas is surplus to the present and projected intrastate domestic and industrial needs. 14 The commissioner shall make public, in writing, the specific findings and reasons on 15 which the determination is based. 16 * Sec. 32. AS 38.05.183(e) is amended to read: 17 (e) When a sale, exchange, or other disposal of oil or gas taken in kind by the 18 state as its royalty share, or a sale, exchange, or other disposal in whole or in part of a 19 right to receive future royalty oil or gas, under a state lease under this chapter is made 20 other than by competitive bid, or when a sale, exchange, or other disposal of gas 21 delivered to the state under AS 43.55.014(b) is made other than by competitive 22 bid, the sale, exchange, or other disposal shall be awarded by the commissioner to the 23 prospective buyer whose proposal offers the maximum benefits to citizens of the state. 24 The commissioner shall consider 25 (1) the cash value offered; 26 (2) the projected effects of the sale, exchange, or other disposal on the 27 economy of the state; 28 (3) the projected benefits of refining or processing the oil or gas in the 29 state; 30 (4) the ability of the prospective buyer to provide refined products or 31 by-products for distribution and sale in the state with price or supply benefits to the
01 citizens of the state; and 02 (5) the criteria listed in AS 38.06.070(a). 03 * Sec. 33. AS 38.05.965 is amended by adding new paragraphs to read: 04 (26) "initial project term" means the duration sufficient to support an 05 investment decision by the sponsors of a North Slope natural gas project to permit 06 realization of a competitive economic return, to enable necessary financing, and to 07 support agreements for the sale of hydrocarbons transported on a North Slope natural 08 gas project; 09 (27) "North Slope natural gas project" means a project to produce or 10 transport natural gas from state oil and gas and gas only leases that include land north 11 of 68 degrees North latitude for transport in a gaseous state from the North Slope; 12 (28) "project services" means services provided by a gas treatment 13 plant, pipeline, liquefaction facility, or marine terminal, marine transportation 14 services, or other services necessary to transport natural gas to market. 15 * Sec. 34. AS 38.34.020(a) is amended to read: 16 (a) A state agency or entity conducting a review or taking action relating to a 17 project under AS 31.25 (Alaska Gasline Development Corporation) [THE IN- 18 STATE NATURAL GAS PIPELINE PROJECT UNDER THIS CHAPTER] shall 19 expedite the review or action in a manner consistent with the timely completion of the 20 project. 21 * Sec. 35. AS 38.34.020(b) is amended to read: 22 (b) Notwithstanding any contrary provision of law, a state agency or entity 23 may not include in any project certificate, right-of-way, permit, or other authorization 24 a term or condition that is not required by law if the in-state gasline project 25 coordinator determines that the term or condition would prevent or impair, in any 26 significant respect, the expeditious construction and operation or expansion of a 27 project under AS 31.25 (Alaska Gasline Development Corporation) [THE IN- 28 STATE NATURAL GAS PIPELINE PROJECT]. 29 * Sec. 36. AS 38.34.020(c) is amended to read: 30 (c) Unless required by law, a state agency or entity may not add to, amend, or 31 abrogate any certificate, right-of-way, permit, or other authorization if the in-state
01 gasline project coordinator determines that the action would prevent or impair, in any 02 significant respect, the expeditious construction, operation, or expansion of a project 03 under AS 31.25 (Alaska Gasline Development Corporation) [THE IN-STATE 04 NATURAL GAS PIPELINE PROJECT]. 05 * Sec. 37. AS 40.25.100(a) is amended to read: 06 (a) Information in the possession of the Department of Revenue that discloses 07 the particulars of the business or affairs of a taxpayer or other person, including 08 information under AS 38.05.020(b)(11) that is subject to a confidentiality 09 agreement under AS 38.05.020(b)(12), is not a matter of public record, except as 10 provided in AS 43.05.230(i) or for purposes of investigation and law enforcement. The 11 information shall be kept confidential except when its production is required in an 12 official investigation, administrative adjudication under AS 43.05.405 - 43.05.499, or 13 court proceeding. These restrictions do not prohibit the publication of statistics 14 presented in a manner that prevents the identification of particular reports and items, 15 prohibit the publication of tax lists showing the names of taxpayers who are delinquent 16 and relevant information that may assist in the collection of delinquent taxes, or 17 prohibit the publication of records, proceedings, and decisions under AS 43.05.405 - 18 43.05.499. 19 * Sec. 38. AS 40.25.100(a), as amended by sec. 37 of this Act, is amended to read: 20 (a) Information in the possession of the Department of Revenue that discloses 21 the particulars of the business or affairs of a taxpayer or other person, including 22 information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement 23 under AS 38.05.020(b)(12), is not a matter of public record, except as provided in 24 AS 43.05.230(i) or (k) or for purposes of investigation and law enforcement. The 25 information shall be kept confidential except when its production is required in an 26 official investigation, administrative adjudication under AS 43.05.405 - 43.05.499, or 27 court proceeding. These restrictions do not prohibit the publication of statistics 28 presented in a manner that prevents the identification of particular reports and items, 29 prohibit the publication of tax lists showing the names of taxpayers who are delinquent 30 and relevant information that may assist in the collection of delinquent taxes, or 31 prohibit the publication of records, proceedings, and decisions under AS 43.05.405 -
01 43.05.499. 02 * Sec. 39. AS 40.25.120(a) is amended to read: 03 (a) Every person has a right to inspect a public record in the state, including 04 public records in recorders' offices, except 05 (1) records of vital statistics and adoption proceedings, which shall be 06 treated in the manner required by AS 18.50; 07 (2) records pertaining to juveniles unless disclosure is authorized by 08 law; 09 (3) medical and related public health records; 10 (4) records required to be kept confidential by a federal law or 11 regulation or by state law; 12 (5) to the extent the records are required to be kept confidential under 13 20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure 14 or retain federal assistance; 15 (6) records or information compiled for law enforcement purposes, but 16 only to the extent that the production of the law enforcement records or information 17 (A) could reasonably be expected to interfere with enforcement 18 proceedings; 19 (B) would deprive a person of a right to a fair trial or an 20 impartial adjudication; 21 (C) could reasonably be expected to constitute an unwarranted 22 invasion of the personal privacy of a suspect, defendant, victim, or witness; 23 (D) could reasonably be expected to disclose the identity of a 24 confidential source; 25 (E) would disclose confidential techniques and procedures for 26 law enforcement investigations or prosecutions; 27 (F) would disclose guidelines for law enforcement 28 investigations or prosecutions if the disclosure could reasonably be expected to 29 risk circumvention of the law; or 30 (G) could reasonably be expected to endanger the life or 31 physical safety of an individual;
01 (7) names, addresses, and other information identifying a person as a 02 participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the 03 advance college tuition savings program under AS 14.40.803 - 14.40.817; 04 (8) public records containing information that would disclose or might 05 lead to the disclosure of a component in the process used to execute or adopt an 06 electronic signature if the disclosure would or might cause the electronic signature to 07 cease being under the sole control of the person using it; 08 (9) reports submitted under AS 05.25.030 concerning certain 09 collisions, accidents, or other casualties involving boats; 10 (10) records or information pertaining to a plan, program, or 11 procedures for establishing, maintaining, or restoring security in the state, or to a 12 detailed description or evaluation of systems, facilities, or infrastructure in the state, 13 but only to the extent that the production of the records or information 14 (A) could reasonably be expected to interfere with the 15 implementation or enforcement of the security plan, program, or procedures; 16 (B) would disclose confidential guidelines for investigations or 17 enforcement and the disclosure could reasonably be expected to risk 18 circumvention of the law; or 19 (C) could reasonably be expected to endanger the life or 20 physical safety of an individual or to present a real and substantial risk to the 21 public health and welfare; 22 (11) the written notification regarding a proposed regulation provided 23 under AS 24.20.105 to the Department of Law and the affected state agency and 24 communications between the Legislative Affairs Agency, the Department of Law, and 25 the affected state agency under AS 24.20.105; 26 (12) records that are 27 (A) proprietary, privileged, or a trade secret in accordance with 28 AS 43.90.150 or 43.90.220(e); 29 (B) applications that are received under AS 43.90 until notice is 30 published under AS 43.90.160; 31 (13) information of the Alaska Gasline Development Corporation
01 created under AS 31.25.010 or a subsidiary of the Alaska Gasline Development 02 Corporation that is confidential by law or under a valid confidentiality agreement; 03 (14) information under AS 38.05.020(b)(11) that is subject to a 04 confidentiality agreement under AS 38.05.020(b)(12). 05 * Sec. 40. AS 43.05.010 is amended to read: 06 Sec. 43.05.010. Duties of commissioner. The commissioner of revenue shall 07 (1) exercise general supervision and direct the activities of the 08 Department of Revenue; 09 (2) supervise the fiscal affairs and responsibilities of the department; 10 (3) prescribe uniform rules for investigations and hearings; 11 (4) keep a record of all departmental proceedings, record and file all 12 bonds, and assume custody of returns, reports, papers, and documents of the 13 department; 14 (5) adopt a seal and affix it to each order, process, or certificate issued 15 by the commissioner; 16 (6) keep a record of each order, process, and certificate issued by the 17 commissioner, and keep the record open to public inspection at all reasonable times; 18 (7) hold hearings and investigations necessary for the administration of 19 state tax and revenue laws; 20 (8) except as provided in AS 43.05.405 - 43.05.499 and in 21 AS 44.64.030, hear and determine appeals of a matter within the jurisdiction of the 22 Department of Revenue and enter orders on the appeals that are final unless reversed 23 or modified by the courts; 24 (9) issue subpoenas to require the attendance of witnesses and the 25 production of necessary books, papers, documents, correspondence, and other things; 26 (10) order the taking of depositions before a person competent to 27 administer oaths; 28 (11) administer oaths and take acknowledgments; 29 (12) request the attorney general for rulings on the interpretation of the 30 tax and revenue laws administered by the department; 31 (13) call upon the attorney general to institute actions for recovery of
01 unpaid taxes, fees, excises, additions to tax, penalties, and interest; 02 (14) issue warrants for the collection of unpaid tax penalties and 03 interest and take all steps necessary and proper to enforce full and complete 04 compliance with the tax, license, excise, and other revenue laws of the state; 05 (15) report to the legislature before February 15 of each year the total 06 amount of contributions reported and the total amount of credit claimed during the 07 previous calendar year under AS 43.20.014, AS 43.55.019, AS 43.56.018, 08 AS 43.65.018, AS 43.75.018, and AS 43.77.045; 09 (16) consult with the commissioner of natural resources on 10 negotiation of contracts and development of terms for inclusion in proposed 11 contracts associated with a North Slope natural gas project. 12 * Sec. 41. AS 43.05.010, as amended by sec. 40 of this Act, is amended to read: 13 Sec. 43.05.010. Duties of commissioner. The commissioner of revenue shall 14 (1) exercise general supervision and direct the activities of the 15 Department of Revenue; 16 (2) supervise the fiscal affairs and responsibilities of the department; 17 (3) prescribe uniform rules for investigations and hearings; 18 (4) keep a record of all departmental proceedings, record and file all 19 bonds, and assume custody of returns, reports, papers, and documents of the 20 department; 21 (5) adopt a seal and affix it to each order, process, or certificate issued 22 by the commissioner; 23 (6) keep a record of each order, process, and certificate issued by the 24 commissioner, and keep the record open to public inspection at all reasonable times; 25 (7) hold hearings and investigations necessary for the administration of 26 state tax and revenue laws; 27 (8) except as provided in AS 43.05.405 - 43.05.499 and in 28 AS 44.64.030, hear and determine appeals of a matter within the jurisdiction of the 29 Department of Revenue and enter orders on the appeals that are final unless reversed 30 or modified by the courts; 31 (9) issue subpoenas to require the attendance of witnesses and the
01 production of necessary books, papers, documents, correspondence, and other things; 02 (10) order the taking of depositions before a person competent to 03 administer oaths; 04 (11) administer oaths and take acknowledgments; 05 (12) request the attorney general for rulings on the interpretation of the 06 tax and revenue laws administered by the department; 07 (13) call upon the attorney general to institute actions for recovery of 08 unpaid taxes, fees, excises, additions to tax, penalties, and interest; 09 (14) issue warrants for the collection of unpaid tax penalties and 10 interest and take all steps necessary and proper to enforce full and complete 11 compliance with the tax, license, excise, and other revenue laws of the state; 12 (15) report to the legislature before February 15 of each year the total 13 amount of contributions reported and the total amount of credit claimed during the 14 previous calendar year under AS 43.20.014, AS 43.55.019, AS 43.56.018, 15 AS 43.65.018, AS 43.75.018, and AS 43.77.045; 16 (16) consult with the commissioner of natural resources on negotiation 17 of contracts and development of terms for inclusion in proposed contracts associated 18 with a North Slope natural gas project; 19 (17) direct the disposition of revenue received from gas delivered 20 to the state under AS 43.55.014(b) by entering into agreements with the 21 commissioner of natural resources related to the management of the custody and 22 disposition of gas delivered to the state under AS 43.55.014(b). 23 * Sec. 42. AS 43.05.230 is amended by adding a new subsection to read: 24 (k) The name of each person that the department has allowed to make an 25 election under AS 43.55.014(a) and the amount of gas produced from each lease or 26 property to which an effective election under AS 43.55.014 applies is public 27 information. 28 * Sec. 43. AS 43.20.144(d) is amended to read: 29 (d) The sales factor of a taxpayer subject to this section is a fraction, 30 (1) the numerator of which is the sum of the following for the tax 31 period:
01 (A) the tariffs allowed and received by or for the taxpayer for 02 transporting oil or gas by pipeline in this state, regardless of whether the tariffs 03 are paid by third parties or by entities within the taxpayer's consolidated 04 business; and 05 (B) the total sales of the taxpayer in this state, determined in 06 accordance with AS 43.19 (Multistate Tax Compact), but excluding 07 (i) those sales already included in the tariffs described 08 in (A) of this paragraph; 09 (ii) constructive sales or deemed sales of natural gas 10 delivered to the state as payment of tax under an election made by 11 the taxpayer under AS 43.55.014; 12 (iii) fees, allowed and received, that are paid 13 between entities within the consolidated business of the taxpayer 14 for transporting the taxpayer's natural gas; and 15 (2) the denominator of which is the sum of the following for the tax 16 period: 17 (A) the tariffs allowed and received by or for the taxpayer's 18 consolidated business for transporting oil or gas by pipeline everywhere, 19 regardless of whether the tariffs are paid by third parties or by entities within 20 the taxpayer's consolidated business; and 21 (B) the total sales of the taxpayer's consolidated business 22 everywhere, determined in accordance with AS 43.19 (Multistate Tax 23 Compact), but excluding 24 (i) those sales already included in the tariffs described 25 in (A) of this paragraph; 26 (ii) constructive sales or deemed sales of natural gas 27 delivered to the state as payment of tax under an election made by 28 the taxpayer under AS 43.55.014 or delivered in another tax 29 jurisdiction under a law comparable to AS 43.55.014; 30 (iii) fees, allowed and received, that are paid 31 between entities within the consolidated business of the taxpayer
01 for transporting the taxpayer's natural gas. 02 * Sec. 44. AS 43.20.144(f) is amended to read: 03 (f) The extraction factor of a taxpayer subject to this section is a fraction, 04 (1) the numerator of which is the sum of the following for the tax 05 period: 06 (A) the number of barrels of the taxpayer's oil (net of royalty to 07 an unrelated party) produced from or allocated to leases or properties of the 08 taxpayer in this state; and 09 (B) one-sixth of the number of Mcf of the taxpayer's gas, 10 excluding reinjected gas but including gas subject to an election under 11 AS 43.55.014, (net of royalty to an unrelated party) produced from or allocated 12 to leases or properties of the taxpayer in this state [, EXCLUDING 13 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, excluding 20 reinjected gas but including gas subject to an election under AS 43.55.014, 21 of the taxpayer's consolidated business (net of royalty to an unrelated party) 22 produced from or allocated to leases or properties of the taxpayer's 23 consolidated business everywhere [, EXCLUDING REINJECTED GAS]. 24 * Sec. 45. 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 13 percent of the gross value at the point 12 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. 46. 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. 47. 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, other than gas described in (e) of this section, the department 06 shall allow a producer to make an election, under regulations adopted by the 07 department, to pay in gas the production tax levied by this section in lieu of the tax 08 otherwise levied for the gas by AS 43.55.011(e). An election under this subsection 09 applies only to gas produced from oil and gas leases modified under AS 38.05.180(hh) 10 from which the commissioner of natural resources has determined to take royalty gas 11 in kind under AS 38.05.182. 12 (b) A production tax levied by this section is equal to 13 percent of the gas 13 otherwise taxable under AS 43.55.011(e)(3) produced from each oil and gas lease to 14 which an effective election under (a) of this section applies, when and as that gas is 15 produced. The producer shall pay the tax in gas by delivering that 13 percent of the 16 gas to the state at the point of production. 17 (c) The Department of Natural Resources shall manage under 18 AS 38.05.020(b)(14) the custody and disposition of gas delivered to the state under (b) 19 of this section. 20 (d) An assessment under AS 43.05.245 against a producer for an 21 underpayment of a tax levied by this section may be made in terms of an amount of 22 gas or an amount of money, as determined under regulations adopted by the 23 department. If the assessment is made in terms of money, the amount for a month of 24 production for an oil and gas lease subject to an effective election under (a) of this 25 section is the product of the number of units of gas by which the producer's delivery to 26 the state was less than the amount required by (b) of this section, multiplied by the 27 average gross value at the point of production for each unit of the gas produced by the 28 producer from the lease during the month other than gas that was not subject to tax or 29 gas that was delivered to the state under (b) of this section. The department may allow 30 a credit or refund under AS 43.05.275 for an overpayment of a tax levied by this 31 section that may be issued in the form of gas or money, as determined under
01 regulations adopted by the department. If the credit or refund is allowed in terms of 02 money, the amount of the credit or refund for a month of production for an oil and gas 03 lease subject to an effective election under (a) of this section is the product of the 04 number of units of gas by which the producer's delivery to the state was more than the 05 amount required under (b) of this section, multiplied by the average gross value at the 06 point of production for each unit of the gas produced by the producer from the lease 07 during the month other than gas that was not subject to tax or gas that was delivered to 08 the state under (b) of this section. Interest that is determined as a percentage of the 09 amount of a tax underpayment or overpayment and a penalty that is a percentage of 10 the amount of a tax underpayment are calculated as a percentage of the amount of 11 money determined in this subsection. An amount of gas that was less than the amount 12 required to be delivered to the state under (b) of this section or an amount of gas that 13 was more than the amount required to be delivered to the state under (b) of this section 14 that is adjusted as provided by a gas balancing agreement to which the state is a party 15 under AS 38.05.020(b)(11) is not subject to assessment under AS 43.05.245 or a credit 16 or refund under AS 43.05.275. In this subsection, "unit" means a unit of measurement 17 for gas identified by the department under regulations adopted by the department and 18 may be expressed as 1,000 cubic feet, 1,000,000 British thermal units, or another 19 appropriate unit of measurement specified by the department under regulations 20 adopted by the department. 21 (e) This section does not apply to gas that, under AS 43.55.020(e), is 22 considered as gas produced from a lease or property for the purpose of AS 43.55.011 - 23 43.55.180. 24 * Sec. 48. AS 43.55.019(a) is amended to read: 25 (a) A producer of oil or gas is allowed a credit against the tax levied by 26 AS 43.55.011(e) [DUE UNDER THIS CHAPTER] for cash contributions accepted for 27 (1) direct instruction, research, and educational support purposes, 28 including library and museum acquisitions, and contributions to endowment, by an 29 Alaska university foundation or by a nonprofit, public or private, Alaska two-year or 30 four-year college accredited by a regional accreditation association; 31 (2) secondary school level vocational education courses, programs, and
01 facilities by a school district in the state; 02 (3) vocational education courses, programs, equipment, and facilities 03 by a state-operated vocational technical education and training school, a nonprofit 04 regional training center recognized by the Department of Labor and Workforce 05 Development, and an apprenticeship program in the state that is registered with 06 the United States Department of Labor under 29 U.S.C. 50 - 50b (National 07 Apprenticeship Act); 08 (4) a facility or an annual intercollegiate sports tournament by a 09 nonprofit, public or private, Alaska two-year or four-year college accredited by a 10 regional accreditation association; 11 (5) Alaska Native cultural or heritage programs and educational 12 support, including mentoring and tutoring, provided by a nonprofit agency for public 13 school staff and for students who are in grades kindergarten through 12 in the state; 14 (6) education, research, rehabilitation, and facilities by an institution 15 that is located in the state and that qualifies as a coastal ecosystem learning center 16 under the Coastal America Partnership established by the federal government; and 17 (7) the Alaska higher education investment fund under AS 37.14.750. 18 * Sec. 49. AS 43.55.019(a), as amended by sec. 21, ch. 92, SLA 2010, sec. 14, ch. 7, 19 FSSLA 2011, sec. 17, ch. 74, SLA 2012, and sec. 48 of this Act, is amended to read: 20 (a) A producer of oil or gas is allowed a credit against the tax levied by 21 AS 43.55.011(e) for cash contributions accepted 22 (1) for direct instruction, research, and educational support purposes, 23 including library and museum acquisitions, and contributions to endowment, by an 24 Alaska university foundation or by a nonprofit, public or private, Alaska two-year or 25 four-year college accredited by a regional accreditation association; 26 (2) for secondary school level vocational education courses, programs, 27 and facilities by a school district in the state; 28 (3) for vocational education courses, programs, equipment, and 29 facilities by 30 (A) a [STATE-OPERATED] vocational technical education 31 and training school in the state that offers programs approved by the
01 United States Department of Veterans Affairs and the Alaska Commission 02 on Postsecondary Education; 03 (B) a nonprofit regional training center recognized by the 04 Department of Labor and Workforce Development; or 05 (C) an apprenticeship program in the state that is 06 registered with the United States Department of Labor under 29 U.S.C. 50 07 - 50b (National Apprenticeship Act); and 08 (4) for the Alaska higher education investment fund under 09 AS 37.14.750. 10 * Sec. 50. AS 43.55.019(e) is amended to read: 11 (e) The credit under this section may not reduce a person's tax liability under 12 AS 43.55.011(e) [THIS CHAPTER] to below zero for any tax year. An unused credit 13 or portion of a credit not used under this section for a tax year may not be sold, traded, 14 transferred, or applied in a subsequent tax year. 15 * Sec. 51. AS 43.55.020(a) is amended to read: 16 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 17 the tax as follows: 18 (1) for oil and gas produced before January 1, 2014, an installment 19 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 20 as allowed by law, is due for each month of the calendar year on the last day of the 21 following month; except as otherwise provided under (2) of this subsection, the 22 amount of the installment payment is the sum of the following amounts, less 1/12 of 23 the tax credits that are allowed by law to be applied against the tax levied by 24 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 25 not be less than zero: 26 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 27 produced from leases or properties in the state outside the Cook Inlet 28 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 29 the greater of 30 (i) zero; or 31 (ii) the sum of 25 percent and the tax rate calculated for
01 the month under AS 43.55.011(g) multiplied by the remainder obtained 02 by 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) the sum of 25 percent and the tax rate calculated for 16 the month under AS 43.55.011(g) multiplied by the remainder obtained 17 by subtracting 1/12 of the producer's adjusted lease expenditures for the 18 calendar year of production under AS 43.55.165 and 43.55.170 that are 19 deductible for the oil and gas under AS 43.55.160 from the gross value 20 at the point of production of the oil and gas produced from those leases 21 or properties during the month for which the installment payment is 22 calculated; 23 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 24 each lease or property, the greater of 25 (i) zero; or 26 (ii) the sum of 25 percent and the tax rate calculated for 27 the month under AS 43.55.011(g) multiplied by the remainder obtained 28 by 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) the sum of 25 percent and the tax rate calculated for 06 the month under AS 43.55.011(g) multiplied by the remainder obtained 07 by subtracting 1/12 of the producer's adjusted lease expenditures for the 08 calendar year of production under AS 43.55.165 and 43.55.170 that are 09 deductible for the oil and gas under AS 43.55.160 from the gross value 10 at the point of production of the oil and gas produced from the leases or 11 properties during the month for which the installment payment is 12 calculated, but not less than zero; or 13 (ii) four percent of the gross value at the point of 14 production of the oil and gas produced from the leases or properties 15 during the month, but not less than zero; 16 (2) an amount calculated under (1)(C) of this subsection for oil or gas 17 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 18 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 19 applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but 20 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 21 amount of taxable gas produced during the month for the amount of taxable gas 22 produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or 23 (2)(A), as applicable, the amount of taxable oil produced during the month for the 24 amount of taxable oil produced during the calendar year; 25 (3) an installment payment of the estimated tax levied by 26 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 27 on the last day of the following month; the amount of the installment payment is the 28 sum of 29 (A) the applicable tax rate for oil provided under 30 AS 43.55.011(i), multiplied by the gross value at the point of production of the 31 oil taxable under AS 43.55.011(i) and produced from the lease or property
01 during the month; and 02 (B) the applicable tax rate for gas provided under 03 AS 43.55.011(i), multiplied by the gross value at the point of production of the 04 gas taxable under AS 43.55.011(i) and produced from the lease or property 05 during the month; 06 (4) any amount of tax levied by AS 43.55.011, net of any credits 07 applied as allowed by law, that exceeds the total of the amounts due as installment 08 payments of estimated tax is due on March 31 of the year following the calendar year 09 of production; 10 (5) for oil and gas produced on and after January 1, 2014, and before 11 January 1, 2022, an installment payment of the estimated tax levied by 12 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 13 month of the calendar year on the last day of the following month; except as otherwise 14 provided under (6) of this subsection, the amount of the installment payment is the 15 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 16 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 17 of the installment payment may not be less than zero: 18 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 19 produced from leases or properties in the state outside the Cook Inlet 20 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 21 the greater of 22 (i) zero; or 23 (ii) 35 percent multiplied by the remainder obtained by 24 subtracting 1/12 of the producer's adjusted lease expenditures for the 25 calendar year of production under AS 43.55.165 and 43.55.170 that are 26 deductible for the oil and gas under AS 43.55.160 from the gross value 27 at the point of production of the oil and gas produced from the leases or 28 properties during the month for which the installment payment is 29 calculated; 30 (B) for oil and gas produced from leases or properties subject 31 to AS 43.55.011(f), the greatest of
01 (i) zero; 02 (ii) zero percent, one percent, two percent, three 03 percent, or four percent, as applicable, of the gross value at the point of 04 production of the oil and gas produced from the leases or properties 05 during the month for which the installment payment is calculated; or 06 (iii) 35 percent multiplied by the remainder obtained by 07 subtracting 1/12 of the producer's adjusted lease expenditures for the 08 calendar year of production under AS 43.55.165 and 43.55.170 that are 09 deductible for the oil and gas under AS 43.55.160 from the gross value 10 at the point of production of the oil and gas produced from those leases 11 or properties during the month for which the installment payment is 12 calculated, except that, for the purposes of this calculation, a reduction 13 from the gross value at the point of production may apply for oil and 14 gas subject to AS 43.55.160(f) or (g); 15 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 16 each lease or property, the greater of 17 (i) zero; or 18 (ii) 35 percent multiplied by the remainder obtained by 19 subtracting 1/12 of the producer's adjusted lease expenditures for the 20 calendar year of production under AS 43.55.165 and 43.55.170 that are 21 deductible under AS 43.55.160 for the oil or gas, respectively, 22 produced from the lease or property from the gross value at the point of 23 production of the oil or gas, respectively, produced from the lease or 24 property during the month for which the installment payment is 25 calculated; 26 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 27 (i) 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 for the oil and gas under AS 43.55.160 from the gross value 31 at the point of production of the oil and gas produced from the leases or
01 properties during the month for which the installment payment is 02 calculated, but not less than zero; or 03 (ii) four percent of the gross value at the point of 04 production of the oil and gas produced from the leases or properties 05 during the month, but not less than zero; 06 (6) an amount calculated under (5)(C) of this subsection for oil or gas 07 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 08 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 09 applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but 10 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 11 amount of taxable gas produced during the month for the amount of taxable gas 12 produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or 13 (2)(A), as applicable, the amount of taxable oil produced during the month for the 14 amount of taxable oil produced during the calendar year; 15 (7) for oil and gas produced on or after January 1, 2022, an 16 installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax 17 credits applied as allowed by law, is due for each month of the calendar year on 18 the last day of the following month; the amount of the installment payment is the 19 sum of the following amounts, less 1/12 of the tax credits that are allowed by law 20 to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but 21 the amount of the installment payment may not be less than zero: 22 (A) for oil produced from leases or properties that include 23 land north of 68 degrees North latitude, the greatest of 24 (i) zero; 25 (ii) zero percent, one percent, two percent, three 26 percent, or four percent, as applicable, of the gross value at the 27 point of production of the oil produced from the leases or 28 properties during the month for which the installment payment is 29 calculated; or 30 (iii) 35 percent multiplied by the remainder obtained 31 by subtracting 1/12 of the producer's adjusted lease expenditures
01 for the calendar year of production under AS 43.55.165 and 02 43.55.170 that are deductible for the oil under AS 43.55.160(h)(1) 03 from the gross value at the point of production of the oil produced 04 from those leases or properties during the month for which the 05 installment payment is calculated, except that, for the purposes of 06 this calculation, a reduction from the gross value at the point of 07 production may apply for oil subject to AS 43.55.160(f) or 08 43.55.160(f) and (g); 09 (B) for oil produced before or during the last calendar year 10 under AS 43.55.024(b) for which the producer could take a tax credit 11 under AS 43.55.024(a), from leases or properties in the state outside the 12 Cook Inlet sedimentary basin, no part of which is north of 68 degrees 13 North latitude, other than leases or properties subject to AS 43.55.011(p), 14 the greater of 15 (i) zero; or 16 (ii) 35 percent multiplied by the remainder obtained 17 by subtracting 1/12 of the producer's adjusted lease expenditures 18 for the calendar year of production under AS 43.55.165 and 19 43.55.170 that are deductible for the oil under AS 43.55.160(h)(2) 20 from the gross value at the point of production of the oil produced 21 from the leases or properties during the month for which the 22 installment payment is calculated; 23 (C) for oil and gas produced from leases or properties 24 subject to AS 43.55.011(p), except as otherwise provided under (8) of this 25 subsection, the sum of 26 (i) 35 percent multiplied by the remainder obtained 27 by subtracting 1/12 of the producer's adjusted lease expenditures 28 for the calendar year of production under AS 43.55.165 and 29 43.55.170 that are deductible for the oil under AS 43.55.160(h)(3) 30 from the gross value at the point of production of the oil produced 31 from the leases or properties during the month for which the
01 installment payment is calculated, but not less than zero; and 02 (ii) 13 percent of the gross value at the point of 03 production of the gas produced from the leases or properties 04 during the month, but not less than zero; 05 (D) for oil produced from leases or properties in the state, 06 no part of which is north of 68 degrees North latitude, other than leases or 07 properties subject to (B) or (C) of this paragraph, the greater of 08 (i) zero; or 09 (ii) 35 percent multiplied by the remainder obtained 10 by subtracting 1/12 of the producer's adjusted lease expenditures 11 for the calendar year of production under AS 43.55.165 and 12 43.55.170 that are deductible for the oil under AS 43.55.160(h)(4) 13 from the gross value at the point of production of the oil produced 14 from the leases or properties during the month for which the 15 installment payment is calculated; 16 (E) for gas produced from each lease or property in the 17 state, other than a lease or property subject to AS 43.55.011(p), 13 percent 18 of the gross value at the point of production of the gas produced from the 19 lease or property during the month for which the installment payment is 20 calculated, but not less than zero; 21 (8) an amount calculated under (7)(C) of this subsection may not 22 exceed four percent of the gross value at the point of production of the oil and gas 23 produced from leases or properties subject to AS 43.55.011(p) during the month 24 for which the installment payment is calculated; 25 (9) for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and 26 (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the 27 point of production is determined under AS 43.55.011(f)(1) or (2) but substituting 28 the phrase "month for which the installment payment is calculated" in 29 AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is 30 due." [.] 31 * Sec. 52. AS 43.55.020(g) is amended to read:
01 (g) Notwithstanding any contrary provision of AS 43.05.225, 02 (1) before January 1, 2014, an unpaid amount of an installment 03 payment required under (a)(1) - (3) of this section that is not paid when due bears 04 interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621 (Internal 05 Revenue Code), as amended, compounded daily, from the date the installment 06 payment is due until March 31 following the calendar year of production, and (B) as 07 provided for a delinquent tax under AS 43.05.225 after that March 31; interest accrued 08 under (A) of this paragraph that remains unpaid after that March 31 is treated as an 09 addition to tax that bears interest under (B) of this paragraph; an unpaid amount of tax 10 due under (a)(4) of this section that is not paid when due bears interest as provided for 11 a delinquent tax under AS 43.05.225; 12 (2) on and after January 1, 2014, an unpaid amount of an installment 13 payment required under (a)(3), (5), [OR] (6), or (7) of this section that is not paid 14 when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C. 15 6621 (Internal Revenue Code), as amended, compounded daily, from the date the 16 installment payment is due until March 31 following the calendar year of production, 17 and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31; 18 interest accrued under (A) of this paragraph that remains unpaid after that March 31 is 19 treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid 20 amount of tax due under (a)(4) of this section that is not paid when due bears interest 21 as provided for a delinquent tax under AS 43.05.225. 22 * Sec. 53. AS 43.55.020(h) is amended to read: 23 (h) Notwithstanding any contrary provision of AS 43.05.280, 24 (1) an overpayment of an installment payment required under (a)(1), 25 (2), (3), (5), (6), or (7) [(a)(1) - (3), (5) OR (6)] of this section bears interest at the rate 26 provided for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as 27 amended, compounded daily, from the later of the date the installment payment is due 28 or the date the overpayment is made, until the earlier of 29 (A) the date it is refunded or is applied to an underpayment; or 30 (B) March 31 following the calendar year of production; 31 (2) except as provided under (1) of this subsection, interest with
01 respect to an overpayment is allowed only on any net overpayment of the payments 02 required under (a) of this section that remains after the later of March 31 following the 03 calendar year of production or the date that the statement required under 04 AS 43.55.030(a) is filed; 05 (3) interest is allowed under (2) of this subsection only from a date that 06 is 90 days after the later of March 31 following the calendar year of production or the 07 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 08 if the overpayment was refunded within the 90-day period; 09 (4) interest under (2) and (3) of this subsection is paid at the rate and in 10 the manner provided in AS 43.05.225(1). 11 * Sec. 54. AS 43.55.020(l) is amended to read: 12 (l) For oil and gas produced on [ON] and after January 1, 2014, and before 13 January 1, 2022, in making settlement with the royalty owner for oil and gas that is 14 taxable under AS 43.55.011, the producer may deduct the amount of the tax paid on 15 taxable royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in 16 value at the time the tax becomes due to the amount of the tax paid. If the total 17 deductions of installment payments of estimated tax for a calendar year exceed the 18 actual tax for that calendar year, the producer shall, before April 1 of the following 19 year, refund the excess to the royalty owner. 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 and gas for a calendar year, other than oil and gas the ownership or 22 right to which constitutes a landowner's royalty interest, is considered to be the gross 23 value at the point of production of the taxable royalty oil and gas produced during the 24 calendar year 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)(2) [AS 43.55.011(e)] 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 and gas taxable under AS 43.55.011(e) produced by the producer from all 29 leases and properties in the state during the calendar year. 30 * Sec. 55. AS 43.55.020 is amended by adding a new subsection to read: 31 (m) For oil and gas produced on and after January 1, 2022, in making
01 settlement with the royalty owner for oil and gas that is taxable under AS 43.55.011, 02 the producer may deduct the amount of the tax paid on taxable royalty oil and gas, or 03 may deduct taxable royalty oil or gas equivalent in value at the time the tax becomes 04 due to the amount of the tax paid. If the total deductions of installment payments of 05 estimated tax for a calendar year exceed the actual tax for that calendar year, the 06 producer shall, before April 1 of the following year, refund the excess to the royalty 07 owner. In making settlement with the royalty owner for gas that is taxable under 08 AS 43.55.014, the producer may deduct the amount of the gas paid as in-kind tax on 09 taxable royalty gas or may deduct the gross value at the point of production of the gas 10 paid as in-kind tax on taxable royalty gas. Unless otherwise agreed between the 11 producer and the royalty owner, the amount of the tax paid under AS 43.55.011(e) on 12 taxable royalty oil for a calendar year, other than oil the ownership or right to which 13 constitutes a landowner's royalty interest, is considered to be the gross value at the 14 point of production of the taxable royalty oil produced during the calendar year 15 multiplied by a figure that is a quotient, in which 16 (1) the numerator is the producer's total tax liability under 17 AS 43.55.011(e)(3)(A) for the calendar year of production; and 18 (2) the denominator is the total gross value at the point of production 19 of the oil taxable under AS 43.55.011(e) produced by the producer from all leases and 20 properties in the state during the calendar year. 21 * Sec. 56. AS 43.55.030(a) is amended to read: 22 (a) A producer that produces oil or gas from a lease or property in the state 23 during a calendar year, whether or not any tax payment is due under AS 43.55.020(a) 24 for that oil or gas, shall file with the department on March 31 of the following year a 25 statement, under oath, in a form prescribed by the department, giving, with other 26 information required, the following: 27 (1) a description of each lease or property from which oil or gas was 28 produced, by name, legal description, lease number, or accounting codes assigned by 29 the department; 30 (2) the names of the producer and, if different, the person paying the 31 tax, if any;
01 (3) the gross amount of oil and the gross amount of gas produced from 02 each lease or property, separately identifying the gross amount of gas produced 03 from each oil and gas lease to which an effective election under AS 43.55.014(a) 04 applies, the amount of gas delivered to the state under AS 43.55.014(b), and the 05 percentage of the gross amount of oil and gas owned by the producer; 06 (4) the gross value at the point of production of the oil and of the gas 07 produced from each lease or property owned by the producer and the costs of 08 transportation of the oil and gas; 09 (5) the name of the first purchaser and the price received for the oil and 10 for the gas, unless relieved from this requirement in whole or in part by the 11 department; 12 (6) the producer's qualified capital expenditures, as defined in 13 AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other 14 payments or credits under AS 43.55.170; 15 (7) the production tax values of the oil and gas under AS 43.55.160(a) 16 or of the oil under AS 43.55.160(h), as applicable [AS 43.55.160]; 17 (8) any claims for tax credits to be applied; and 18 (9) calculations showing the amounts, if any, that were or are due 19 under AS 43.55.020(a) and interest on any underpayment or overpayment. 20 * Sec. 57. AS 43.55.160(a) is amended to read: 21 (a) For oil and gas produced before January 1, 2022, except [EXCEPT] as 22 provided in (b), (f), and (g) of this section, for the purposes of 23 (1) AS 43.55.011(e)(1) and (2) [AS 43.55.011(e)], the annual 24 production tax value of taxable oil, gas, or oil and gas produced during a calendar year 25 in a category for which a separate annual production tax value is required to be 26 calculated under this paragraph is the gross value at the point of production of that oil, 27 gas, or oil and gas taxable under AS 43.55.011(e), less the producer's lease 28 expenditures under AS 43.55.165 for the calendar year applicable to the oil, gas, or oil 29 and gas in that category produced by the producer during the calendar year, as 30 adjusted under AS 43.55.170; a separate annual production tax value shall be 31 calculated for
01 (A) oil and gas produced from leases or properties in the state 02 that include land north of 68 degrees North latitude, other than gas produced 03 before 2022 and used in the state; 04 (B) oil and gas produced from leases or properties in the state 05 outside the Cook Inlet sedimentary basin, no part of which is north of 68 06 degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a) 07 and (b); this subparagraph does not apply to 08 (i) gas produced before 2022 and used in the state; or 09 (ii) oil and gas subject to AS 43.55.011(p); 10 (C) oil produced before 2022 from each lease or property in the 11 Cook Inlet sedimentary basin; 12 (D) gas produced before 2022 from each lease or property in 13 the Cook Inlet sedimentary basin; 14 (E) gas produced before 2022 from each lease or property in 15 the state outside the Cook Inlet sedimentary basin and used in the state, other 16 than gas subject to AS 43.55.011(p); 17 (F) oil and gas subject to AS 43.55.011(p) produced from 18 leases or properties in the state; 19 (G) oil and gas produced from leases or properties in the state 20 no part of which is north of 68 degrees North latitude, other than oil or gas 21 described in (B), (C), (D), (E), or (F) of this paragraph; 22 (2) AS 43.55.011(g), for oil and gas produced before January 1, 2014, 23 the monthly production tax value of the taxable 24 (A) oil and gas produced during a month from leases or 25 properties in the state that include land north of 68 degrees North latitude is the 26 gross value at the point of production of the oil and gas taxable under 27 AS 43.55.011(e) and produced by the producer from those leases or properties, 28 less 1/12 of the producer's lease expenditures under AS 43.55.165 for the 29 calendar year applicable to the oil and gas produced by the producer from 30 those leases or properties, as adjusted under AS 43.55.170; this subparagraph 31 does not apply to gas subject to AS 43.55.011(o);
01 (B) oil and gas produced during a month from leases or 02 properties in the state outside the Cook Inlet sedimentary basin, no part of 03 which is north of 68 degrees North latitude, is the gross value at the point of 04 production of the oil and gas taxable under AS 43.55.011(e) and produced by 05 the producer from those leases or properties, less 1/12 of the producer's lease 06 expenditures under AS 43.55.165 for the calendar year applicable to the oil and 07 gas produced by the producer from those leases or properties, as adjusted under 08 AS 43.55.170; this subparagraph does not apply to gas subject to 09 AS 43.55.011(o); 10 (C) oil produced during a month from a lease or property in the 11 Cook Inlet sedimentary basin is the gross value at the point of production of 12 the oil taxable under AS 43.55.011(e) and produced by the producer from that 13 lease or property, less 1/12 of the producer's lease expenditures under 14 AS 43.55.165 for the calendar year applicable to the oil produced by the 15 producer from that lease or property, as adjusted under AS 43.55.170; 16 (D) gas produced during a month from a lease or property in 17 the Cook Inlet sedimentary basin is the gross value at the point of production 18 of the gas taxable under AS 43.55.011(e) and produced by the producer from 19 that lease or property, less 1/12 of the producer's lease expenditures under 20 AS 43.55.165 for the calendar year applicable to the gas produced by the 21 producer from that lease or property, as adjusted under AS 43.55.170; 22 (E) gas produced during a month from a lease or property 23 outside the Cook Inlet sedimentary basin and used in the state is the gross 24 value at the point of production of that gas taxable under AS 43.55.011(e) and 25 produced by the producer from that lease or property, less 1/12 of the 26 producer's lease expenditures under AS 43.55.165 for the calendar year 27 applicable to that gas produced by the producer from that lease or property, as 28 adjusted under AS 43.55.170. 29 * Sec. 58. AS 43.55.160(e) is amended to read: 30 (e) Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that 31 would otherwise be deductible by a producer in a calendar year but whose deduction
01 would cause an annual production tax value calculated under (a)(1) or (h) of this 02 section of taxable oil or gas produced during the calendar year to be less than zero 03 may be used to establish a carried-forward annual loss under AS 43.55.023(b). 04 However, the department shall provide by regulation a method to ensure that, for a 05 period for which a producer's tax liability is limited by AS 43.55.011(j), (k), (o), or 06 (p), any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that would 07 otherwise be deductible by a producer for that period but whose deduction would 08 cause a production tax value calculated under (a)(1)(C), (D), (E), or (F), or (h)(3) of 09 this section to be less than zero are accounted for as though the adjusted lease 10 expenditures had first been used as deductions in calculating the production tax values 11 of oil or gas subject to any of the limitations under AS 43.55.011(j), (k), (o), or (p) that 12 have positive production tax values so as to reduce the tax liability calculated without 13 regard to the limitation to the maximum amount provided for under the applicable 14 provision of AS 43.55.011(j), (k), (o), or (p). Only the amount of those adjusted lease 15 expenditures remaining after the accounting provided for under this subsection may be 16 used to establish a carried-forward annual loss under AS 43.55.023(b). In this 17 subsection, "producer" includes "explorer." 18 * Sec. 59. AS 43.55.160(f) is amended to read: 19 (f) On and after January 1, 2014, in the calculation of an annual production tax 20 value of a producer under (a)(1)(A) or (h)(1) [(a)(1)] of this section, the gross value at 21 the point of production of oil or gas produced from a lease or property north of 68 22 degrees North latitude meeting one or more of the following criteria is reduced by 20 23 percent: (1) the oil or gas is produced from a lease or property that does not contain a 24 lease that was within a unit on January 1, 2003; (2) the oil or gas is produced from a 25 participating area established after December 31, 2011, that is within a unit formed 26 under AS 38.05.180(p) before January 1, 2003, if the participating area does not 27 contain a reservoir that had previously been in a participating area established before 28 December 31, 2011; (3) the oil or gas is produced from acreage that was added to an 29 existing participating area by the Department of Natural Resources on and after 30 January 1, 2014, and the producer demonstrates to the department that the volume of 31 oil or gas produced is from acreage added to an existing participating area. This
01 subsection does not apply to gas produced before 2022 that is used in the state or to 02 gas produced on and after January 1, 2022. A reduction under this subsection may 03 not reduce the gross value at the point of production below zero. In this subsection, 04 "participating area" means a reservoir or portion of a reservoir producing or 05 contributing to production as approved by the Department of Natural Resources. 06 * Sec. 60. AS 43.55.160(g) is amended to read: 07 (g) On and after January 1, 2014, in addition to the reduction under (f) of this 08 section, in the calculation of an annual production tax value of a producer under 09 (a)(1)(A) or (h)(1) [(a)(1)] of this section, the gross value at the point of production of 10 oil or gas produced from a lease or property north of 68 degrees North latitude that 11 does not contain a lease that was within a unit on January 1, 2003, is reduced by 10 12 percent if the oil or gas is produced from a unit made up solely of leases that have a 13 royalty share of more than 12.5 percent in amount or value of the production removed 14 or sold from the lease as determined under AS 38.05.180(f). This subsection does not 15 apply if the royalty obligation for one or more of the leases in the unit has been 16 reduced to 12.5 percent or less under AS 38.05.180(j) for all or part of the calendar 17 year for which the annual production tax value is calculated. This subsection does not 18 apply to gas produced before 2022 that is used in the state or to gas produced on and 19 after January 1, 2022. A reduction under this subsection may not reduce the gross 20 value at the point of production below zero. 21 * Sec. 61. AS 43.55.160 is amended by adding a new subsection to read: 22 (h) For oil produced on and after January 1, 2022, except as provided in (b), 23 (f), and (g) of this section, for the purposes of AS 43.55.011(e)(3), the annual 24 production tax value of oil taxable under AS 43.55.011(e) produced by a producer 25 during a calendar year 26 (1) from leases or properties in the state that include land north of 68 27 degrees North latitude is the gross value at the point of production of that oil, less the 28 producer's lease expenditures under AS 43.55.165 for the calendar year incurred to 29 explore for, develop, or produce oil and gas deposits located in the state north of 68 30 degrees North latitude or located in leases or properties in the state that include land 31 north of 68 degrees North latitude, as adjusted under AS 43.55.170;
01 (2) before or during the last calendar year under AS 43.55.024(b) for 02 which the producer could take a tax credit under AS 43.55.024(a), from leases or 03 properties in the state outside the Cook Inlet sedimentary basin, no part of which is 04 north of 68 degrees North latitude, other than leases or properties subject to 05 AS 43.55.011(p), 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 and gas deposits located in the state outside the 08 Cook Inlet sedimentary basin and south of 68 degrees North latitude, other than oil 09 and gas deposits located in a lease or property that includes land north of 68 degrees 10 North latitude or that is subject to AS 43.55.011(p) or, before January 1, 2027, from 11 which commercial production has not begun, as adjusted under AS 43.55.170; 12 (3) from leases or properties subject to AS 43.55.011(p) is the gross 13 value at the point of production of that oil, less the producer's lease expenditures under 14 AS 43.55.165 for the calendar year incurred to explore for, develop, or produce oil and 15 gas deposits located in leases or properties subject to AS 43.55.011(p) or, before 16 January 1, 2027, located in leases or properties in the state outside the Cook Inlet 17 sedimentary basin, no part of which is north of 68 degrees North latitude from which 18 commercial production has not begun, as adjusted under AS 43.55.170; 19 (4) from leases or properties in the state no part of which is north of 68 20 degrees North latitude, other than leases or properties subject to (2) or (3) of this 21 subsection, is the gross value at the point of production of that oil less the producer's 22 lease expenditures under AS 43.55.165 for the calendar year incurred to explore for, 23 develop, or produce oil and gas deposits located in the state south of 68 degrees North 24 latitude, other than oil and gas deposits located in a lease or property in the state that 25 includes land north of 68 degrees North latitude, and excluding lease expenditures that 26 are deductible under (2) or (3) of this subsection or would be deductible under (2) or 27 (3) of this subsection if not prohibited by (b) of this section, as adjusted under 28 AS 43.55.170. 29 * Sec. 62. AS 43.55.165(e) is amended to read: 30 (e) For purposes of this section, lease expenditures do not include 31 (1) depreciation, depletion, or amortization;
01 (2) oil or gas royalty payments, production payments, lease profit 02 shares, or other payments or distributions of a share of oil or gas production, profit, or 03 revenue, except that a producer's lease expenditures applicable to oil and gas produced 04 from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net 05 profit paid to the state under that lease; 06 (3) taxes based on or measured by net income; 07 (4) interest or other financing charges or costs of raising equity or debt 08 capital; 09 (5) acquisition costs for a lease or property or exploration license; 10 (6) costs arising from fraud, wilful misconduct, gross negligence, 11 violation of law, or failure to comply with an obligation under a lease, permit, or 12 license issued by the state or federal government; 13 (7) fines or penalties imposed by law; 14 (8) costs of arbitration, litigation, or other dispute resolution activities 15 that involve the state or concern the rights or obligations among owners of interests in, 16 or rights to production from, one or more leases or properties or a unit; 17 (9) costs incurred in organizing a partnership, joint venture, or other 18 business entity or arrangement; 19 (10) amounts paid to indemnify the state; the exclusion provided by 20 this paragraph does not apply to the costs of obtaining insurance or a surety bond from 21 a third-party insurer or surety; 22 (11) surcharges levied under AS 43.55.201 or 43.55.300; 23 (12) an expenditure otherwise deductible under (b) of this section that 24 is a result of an internal transfer, a transaction with an affiliate, or a transaction 25 between related parties, or is otherwise not an arm's length transaction, unless the 26 producer establishes to the satisfaction of the department that the amount of the 27 expenditure does not exceed the fair market value of the expenditure; 28 (13) an expenditure incurred to purchase an interest in any corporation, 29 partnership, limited liability company, business trust, or any other business entity, 30 whether or not the transaction is treated as an asset sale for federal income tax 31 purposes;
01 (14) a tax levied under AS 43.55.011 or 43.55.014; 02 (15) costs incurred for dismantlement, removal, surrender, or 03 abandonment of a facility, pipeline, well pad, platform, or other structure, or for the 04 restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in 05 conjunction with dismantlement, removal, surrender, or abandonment; a cost is not 06 excluded under this paragraph if the dismantlement, removal, surrender, or 07 abandonment for which the cost is incurred is undertaken for the purpose of replacing, 08 renovating, or improving the facility, pipeline, well pad, platform, or other structure; 09 (16) costs incurred for containment, control, cleanup, or removal in 10 connection with any unpermitted release of oil or a hazardous substance and any 11 liability for damages imposed on the producer or explorer for that unpermitted release; 12 this paragraph does not apply to the cost of developing and maintaining an oil 13 discharge prevention and contingency plan under AS 46.04.030; 14 (17) costs incurred to satisfy a work commitment under an exploration 15 license under AS 38.05.132; 16 (18) that portion of expenditures, that would otherwise be qualified 17 capital expenditures, as defined in AS 43.55.023, incurred during a calendar year that 18 are less than the product of $0.30 multiplied by the total taxable production from each 19 lease or property, in BTU equivalent barrels, during that calendar year, except that, 20 when a portion of a calendar year is subject to this provision, the expenditures and 21 volumes shall be prorated within that calendar year; 22 (19) costs incurred for repair, replacement, or deferred maintenance of 23 a facility, a pipeline, a structure, or equipment, other than a well, that results in or is 24 undertaken in response to a failure, problem, or event that results in an unscheduled 25 interruption of, or reduction in the rate of, oil or gas production; or costs incurred for 26 repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or 27 equipment, other than a well, that is undertaken in response to, or is otherwise 28 associated with, an unpermitted release of a hazardous substance or of gas; however, 29 costs under this paragraph that would otherwise constitute lease expenditures under (a) 30 and (b) of this section may be treated as lease expenditures if the department 31 determines that the repair or replacement is solely necessitated by an act of war, by an
01 unanticipated grave natural disaster or other natural phenomenon of an exceptional, 02 inevitable, and irresistible character, the effects of which could not have been 03 prevented or avoided by the exercise of due care or foresight, or by an intentional or 04 negligent act or omission of a third party, other than a party or its agents in privity of 05 contract with, or employed by, the producer or an operator acting for the producer, but 06 only if the producer or operator, as applicable, exercised due care in operating and 07 maintaining the facility, pipeline, structure, or equipment, and took reasonable 08 precautions against the act or omission of the third party and against the consequences 09 of the act or omission; in this paragraph, 10 (A) "costs incurred for repair, replacement, or deferred 11 maintenance of a facility, a pipeline, a structure, or equipment" includes costs 12 to dismantle and remove the facility, pipeline, structure, or equipment that is 13 being replaced; 14 (B) "hazardous substance" has the meaning given in 15 AS 46.03.826; 16 (C) "replacement" includes renovation or improvement; 17 (20) costs incurred to construct, acquire, or operate a refinery or crude 18 oil topping plant, regardless of whether the products of the refinery or topping plant 19 are used in oil or gas exploration, development, or production operations; however, if 20 a producer owns a refinery or crude oil topping plant that is located on or near the 21 premises of the producer's lease or property in the state and that processes the 22 producer's oil produced from that lease or property into a product that the producer 23 uses in the operation of the lease or property in drilling for or producing oil or gas, the 24 producer's lease expenditures include the amount calculated by subtracting from the 25 fair market value of the product used the prevailing value, as determined under 26 AS 43.55.020(f), of the oil that is processed; 27 (21) costs of lobbying, public relations, public relations advertising, or 28 policy advocacy. 29 * Sec. 63. AS 43.55.900(10) is amended to read: 30 (10) "gas processing plant" means a facility that 31 (A) extracts and recovers liquid hydrocarbons from a gaseous
01 mixture of hydrocarbons by gas processing; and 02 (B) is located upstream of the inlet of any pipeline 03 transporting gas to a gas treatment plant and upstream of the inlet of any gas 04 pipeline system transporting gas to a market; 05 * Sec. 64. AS 43.55.900(20) is amended to read: 06 (20) "point of production" means 07 (A) for oil, the automatic custody transfer meter or device 08 through which the oil enters into the facilities of a carrier pipeline or other 09 transportation carrier in a condition of pipeline quality; in the absence of an 10 automatic custody transfer meter or device, "point of production" means the 11 mechanism or device to measure the quantity of oil that has been approved by 12 the department for that purpose, through which the oil is tendered and accepted 13 in a condition of pipeline quality into the facilities of a carrier pipeline or other 14 transportation carrier or into a field topping plant; 15 (B) for gas [, OTHER THAN GAS DESCRIBED IN (C) OF 16 THIS PARAGRAPH,] that is 17 (i) not subjected to or recovered by mechanical 18 separation or run through a gas processing plant, the farthest upstream 19 of the following locations: the first point where the gas is accurately 20 metered, the inlet of any pipeline transporting the gas to a gas 21 treatment plant, or the inlet of any gas pipeline system 22 transporting the gas to a market; 23 (ii) subjected to or recovered by mechanical separation 24 but not run through a gas processing plant, the farthest upstream of 25 the following locations: the first point where the gas is accurately 26 metered after completion of mechanical separation, the inlet of any 27 pipeline transporting the gas after completion of mechanical 28 separation to a gas treatment plant, or the inlet of any gas pipeline 29 system transporting the gas after completion of mechanical 30 separation to a market; 31 (iii) run through a gas processing plant, the farthest
01 upstream of the following locations: the first point where the gas is 02 accurately metered downstream of the gas processing plant, the inlet 03 of any pipeline downstream of the gas processing plant 04 transporting the gas to a gas treatment plant, or the inlet of any gas 05 pipeline system downstream of the gas processing plant 06 transporting the gas to a market [; 07 (C) FOR GAS RUN THROUGH AN INTEGRATED GAS 08 PROCESSING PLANT AND GAS TREATMENT FACILITY THAT DOES 09 NOT ACCURATELY METER THE GAS AFTER THE GAS PROCESSING 10 AND BEFORE THE GAS TREATMENT, THE FIRST POINT WHERE GAS 11 PROCESSING IS COMPLETED OR WHERE GAS TREATMENT BEGINS, 12 WHICHEVER IS FURTHER UPSTREAM]; 13 * Sec. 65. AS 43.55.900 is amended by adding a new paragraph to read: 14 (25) "gas treatment plant" means a facility that performs gas treatment, 15 regardless of whether the facility also performs gas processing. 16 * Sec. 66. AS 43.56.010(c) is amended to read: 17 (c) If the total value of assessed property of a municipality taxing under 18 AS 29.45.080(c) exceeds the product of the percentage, as determined in 19 AS 29.45.080(f), [225 PERCENT] of the average per capita assessed full and true 20 value of property in the state, to be determined by the department and reported to each 21 municipality by January 15 of each year, multiplied by the number of residents of the 22 taxing municipality, the department shall designate the portion of the tax base against 23 which the local tax may be applied. 24 * Sec. 67. AS 43.90.900(18) is amended to read: 25 (18) "point of production" has the meaning given in AS 43.55.900 as 26 that section read on June 8, 2007; 27 * Sec. 68. AS 43.98.030(c) is amended to read: 28 (c) A taxpayer acquiring a transferable tax credit certificate may use the credit 29 or a portion of the credit to offset taxes imposed under AS 21.09.210, AS 21.66.110, 30 AS 43.20, AS 43.55.011 [AS 43.55], AS 43.56, AS 43.65, AS 43.75, and AS 43.77. 31 Except as provided in (e) of this section, any portion of the credit not used may be
01 used at a later period or transferred under (b) of this section. 02 * Sec. 69. AS 43.98.050 is amended to read: 03 Sec. 43.98.050. Duties. The duties of the board include the following: 04 (1) establish and maintain a salient collection of information related to 05 oil and gas exploration, development, and production in the state and related to tax 06 structures, rates, and credits in other regions with oil and gas resources; 07 (2) review historical, current, and potential levels of investment in the 08 state's oil and gas sector; 09 (3) identify factors that affect investment in oil and gas exploration, 10 development, and production in the state, including tax structure, rates, and credits; 11 royalty requirements; infrastructure; workforce availability; and regulatory 12 requirements; 13 (4) review the competitive position of the state to attract and maintain 14 investment in the oil and gas sector in the state as compared to the competitive 15 position of other regions with oil and gas resources; 16 (5) in order to facilitate the work of the board, establish procedures to 17 accept and keep confidential information that is beneficial to the work of the board, 18 including the creation of a secure data room and confidentiality agreements to be 19 signed by individuals having access to confidential information; 20 (6) make written findings and recommendations to the Alaska State 21 Legislature before 22 (A) January 31, 2015, or as soon thereafter as practicable, 23 regarding 24 (i) changes to the state's regulatory environment and 25 permitting structure that would be conducive to encouraging increased 26 investment while protecting the interests of the people of the state and 27 the environment; 28 (ii) the status of the oil and gas industry labor pool in 29 the state and the effectiveness of workforce development efforts by the 30 state; 31 (iii) the status of the oil-and-gas-related infrastructure
01 of the state, including a description of infrastructure deficiencies; and 02 (iv) the competitiveness of the state's fiscal oil and gas 03 tax regime when compared to other regions of the world; 04 (B) January 15, 2017, regarding 05 (i) the state's tax structure and rates on oil and gas 06 produced south of 68 degrees North latitude; 07 (ii) a tax structure that takes into account the unique 08 economic circumstances for each oil and gas producing area south 09 of 68 degrees North latitude; 10 (iii) a reduction in the gross value at the point of 11 production for oil and gas produced south of 68 degrees North 12 latitude that is similar to the reduction in gross value at the point of 13 production in AS 43.55.160(f) and (g); 14 (iv) other incentives for oil and gas production south 15 of 68 degrees North latitude; 16 (C) January 31, 2021, or as soon thereafter as practicable, 17 regarding 18 (i) changes to the state's fiscal regime that would be 19 conducive to increased and ongoing long-term investment in and 20 development of the state's oil and gas resources; 21 (ii) alternative means for increasing the state's ability to 22 attract and maintain investment in and development of the state's oil 23 and gas resources; and 24 (iii) a review of the current effectiveness and future 25 value of any provisions of the state's oil and gas tax laws that are 26 expiring in the next five years. 27 * Sec. 70. Section 1(b), ch. 11, SLA 2013, is amended to read: 28 (b) It is the intent of the legislature that 29 (1) the Alaska Gasline Development Corporation, in its new placement 30 as an independent public corporation of the state, shall be treated for all purposes as 31 the transfer of a corporation within the state and not as the creation of a new entity by
01 the State of Alaska; 02 (2) the Board of Directors of the Alaska Gasline Development 03 Corporation commit to governing the Alaska Gasline Development Corporation so as 04 to affect positively as many Alaskans as possible, including those in rural and coastal 05 communities, and to extend opportunities for all Alaskans to benefit from the natural 06 gas resources of the state, including propane and associated gas-related hydrocarbons 07 other than oil; 08 (3) to the maximum extent permitted by law, in developing a natural 09 gas pipeline, the Alaska Gasline Development Corporation shall procure services, 10 labor, products, and natural resources from qualified businesses located in the state, 11 including organizations owned by Alaska Natives and municipal organizations directly 12 affected by the project, if those persons are competitive; 13 (4) the Alaska Gasline Development Corporation in its participation 14 in an Alaska liquefied natural gas project as defined in AS 31.25.390 or a natural 15 gas pipeline shall, to the maximum extent permitted by law, 16 (A) hire qualified residents from throughout the state for 17 management, engineering, construction, operations, maintenance, and other 18 positions for a natural gas pipeline project; 19 (B) establish hiring facilities in the state or use existing hiring 20 facilities in the state; and 21 (C) use, as far as practicable, the job centers and associated 22 services operated by the Department of Labor and Workforce Development 23 and an Internet-based labor exchange system operated by the state; and 24 (5) the Alaska Gasline Development Corporation and its subsidiaries 25 shall wind up and dissolve when no bonds, notes, or other obligations are outstanding 26 and the Alaska Gasline Development Corporation or a subsidiary of the Alaska 27 Gasline Development Corporation is no longer engaged in the development, financing, 28 construction, or operation of an in-state natural gas pipeline. 29 * Sec. 71. AS 31.25.080(f) is repealed. 30 * Sec. 72. The uncodified law of the State of Alaska is amended by adding a new section to 31 read:
01 INFRASTRUCTURE. (a) The Department of Transportation and Public Facilities 02 shall, in consultation with the Alaska Gasline Development Corporation, evaluate the design 03 and construction of a new, separate bridge across the Yukon River that would accommodate 04 both vehicular traffic and a gas pipeline resulting from an Alaska liquefied natural gas project. 05 (b) The Department of Transportation and Public Facilities shall, in consultation with 06 the Alaska Gasline Development Corporation and the Department of Natural Resources, 07 evaluate existing bridges and infrastructure and bridges and infrastructure constructed to 08 accommodate a gas pipeline resulting from an Alaska liquefied natural gas project and 09 determine whether the bridge or infrastructure could also be constructed for transportation 10 uses, including vehicular traffic. 11 * Sec. 73. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 REPORT AND RECOMMENDATIONS BY THE COMMISSIONER OF 14 NATURAL RESOURCES ON THE DELIVERY AND AVAILABILITY OF NORTH 15 SLOPE NATURAL GAS IN THE STATE; IDENTIFICATION OF RISKS AND 16 RECOMMENDATIONS FOR MITIGATION. (a) The commissioner of natural resources in 17 consultation with the Alaska Gasline Development Corporation shall prepare and make 18 available to the legislature a report on a plan and alternatives to make North Slope natural gas 19 available for delivery and use in the state. The report must address 20 (1) the means by which North Slope natural gas may be delivered for use in 21 the state; 22 (2) the anticipated benefits, risks, and liabilities to the state associated with the 23 sale by the state to utilities and other customers in the state of natural gas received by the state 24 as royalty in kind or as payment of tax; 25 (3) the effect and consequences, including the fiscal effect and liability to third 26 parties, of the state's transport of a reduced amount of natural gas south of an in-state delivery 27 point or underutilizing capacity in a liquefied natural gas plant; 28 (4) the costs, benefits, and risks associated with building a pipeline with a 29 mainline diameter larger than 42 inches, including the effect of the increased diameter on 30 compression, fuel, and other costs; the anticipated allocation of the cost of an increased 31 diameter among project participants and the options for and effects of the state or participants
01 in the project funding the increased diameter; a quantification of the potential benefits from 02 the increased diameter that may include increased exploration activity by parties and 03 nonparties to the project and increased royalties and taxes from additional production 04 transported in the increased capacity; and whether natural gas transported in the additional 05 capacity is likely to be produced from federal or state land; and 06 (5) other issues the commissioner of natural resources determines are relevant 07 to the delivery and use of North Slope natural gas in the state and should be considered by the 08 legislature. 09 (b) In conjunction with the report in (a) of this section, the commissioner of natural 10 resources shall recommend the means for eliminating or minimizing the risks and liabilities 11 identified in the report. 12 (c) The commissioner of natural resources shall make the report and 13 recommendations required by this section available to the legislature on or before the date a 14 firm transportation services agreement in a North Slope natural gas project to which the state 15 is a party is submitted to the legislature for approval. 16 (d) In this section, "North Slope natural gas project" has the meaning given in 17 AS 38.05.965, as amended by sec. 33 of this Act. 18 * Sec. 74. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 REQUESTING THE GOVERNOR TO ESTABLISH AN ADVISORY PLANNING 21 GROUP. (a) The legislature requests the governor to establish an advisory planning group 22 under AS 44.19.145 to advise the governor on municipal involvement in a North Slope 23 natural gas project. Members of the advisory planning group may include representatives of 24 municipalities, the commissioner of natural resources, the commissioner of revenue, 25 representatives of oil and gas and gas only lessees on the North Slope, and representatives of 26 other persons expected to be directly involved in the development of a North Slope natural 27 gas project. 28 (b) The advisory planning group shall review available information, hold public 29 meetings, and provide annual reports by December 15 of each year to the governor that 30 include 31 (1) the potential impact and benefits of new infrastructure for North Slope
01 natural gas development, whether designed to provide natural gas for in-state sale or for 02 export, or both, on communities in the state, including consideration of tax structure under 03 AS 29.45 and AS 43.56, and consideration of other payments before construction of new 04 infrastructure associated with North Slope natural gas development; 05 (2) recommendations for changes to the oil and gas exploration, production, 06 and pipeline transportation property taxes under AS 43.56 related to infrastructure for 07 commercialization of natural gas that would facilitate development of a major natural gas 08 project and mitigate financial impacts to communities affected by development of a North 09 Slope natural gas project; 10 (3) recommendations for changes to AS 29.45.080 related to the 11 commercialization of natural gas that would facilitate development of a North Slope natural 12 gas project and mitigate financial impacts to communities affected by a North Slope natural 13 gas project; 14 (4) recommendations for legislative or other options to minimize the financial 15 impact to communities in proximity to North Slope natural gas project infrastructure during 16 construction of a natural gas pipeline and associated infrastructure; and 17 (5) recommendations on the impact and benefits to communities not in 18 proximity to a North Slope natural gas project. 19 (c) In this section, "North Slope natural gas project" has the meaning given in 20 AS 38.05.965, as amended by sec. 33 of this Act. 21 * Sec. 75. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 PLAN AND RECOMMENDATIONS TO THE LEGISLATURE ON 24 INFRASTRUCTURE NEEDED TO DELIVER AFFORDABLE ENERGY TO AREAS IN 25 THE STATE THAT DO NOT HAVE DIRECT ACCESS TO A NORTH SLOPE NATURAL 26 GAS PIPELINE. (a) The Alaska Energy Authority, in consultation with the Alaska Gasline 27 Development Corporation, the Alaska Industrial Development and Export Authority, and the 28 Department of Revenue, shall, after considering the state energy policy under AS 44.99.115 29 and sec. 1, ch. 82, SLA 2010, develop a plan for developing infrastructure to deliver more 30 affordable energy to areas of the state that are not expected to have direct access to a North 31 Slope natural gas pipeline. The plan must identify ownership options, different energy
01 sources, including fossil fuels, hydro projects, tidal, and other alternative energy sources, and 02 describe and recommend the means for generating, delivering, receiving, and storing energy 03 in the most cost-efficient manner. For those citizens for whom there is no economically viable 04 infrastructure available, the plan must recommend the means for directly underwriting the 05 energy costs of the citizens to make their energy costs more affordable. The Alaska Energy 06 Authority may consider the development of regional energy systems that can receive and store 07 bulk fuel in quantity and distribute that fuel as needed within the region. 08 (b) The Alaska Energy Authority, in consultation with the Department of Revenue, 09 shall recommend a plan for funding the design, development, and construction of the required 10 infrastructure and may identify a source of rent, royalty, income, or tax received by the state 11 that may be appropriated by the legislature to implement the plan. 12 (c) The Alaska Energy Authority shall provide the plan and suggested legislation for 13 the design, development, construction, and financing of the required infrastructure to the 14 legislature before January 1, 2017. 15 * Sec. 76. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 DEVELOPMENT OF A PLAN FOR MUNICIPALITIES, REGIONAL 18 CORPORATIONS, AND RESIDENTS TO PARTICIPATE IN THE OWNERSHIP OF A 19 NORTH SLOPE NATURAL GAS PIPELINE; IDENTIFICATION OF AND REPORT ON 20 FINANCING OPTIONS FOR STATE OWNERSHIP AND PARTICIPATION IN A 21 NORTH SLOPE NATURAL GAS PROJECT. (a) The commissioner of revenue shall identify 22 and report to the legislature on a range of financing options for state acquisition of an 23 ownership interest and participation in a North Slope natural gas project. The report must 24 include a description of the risk associated with each option and the effect of each option on 25 the bonding capacity and bond rating of the state. In this subsection, "North Slope natural gas 26 project" has the meaning given in AS 38.05.965, as amended by sec. 33 of this Act. 27 (b) The commissioner shall make an interim draft of the report described in (a) of this 28 section available to the legislature on the first day of the First Regular Session of the Twenty- 29 Ninth Alaska State Legislature, and a final report at the time the commissioner of natural 30 resources submits the first agreement or contract to the legislature for approval under 31 AS 38.05.020(b)(11), enacted by sec. 24 of this Act.
01 (c) At the time the commissioner of natural resources submits the first agreement or 02 contract to the legislature for approval under AS 38.05.020(b)(11), enacted by sec. 24 of this 03 Act, the commissioner of revenue shall present a plan and suggested legislation to allow a 04 municipality, regional corporation, or resident of the state to participate as a co-owner in a 05 North Slope natural gas pipeline. The plan must include the recommendations and analysis by 06 the commissioner as to 07 (1) the means by which a municipality, regional corporation, or resident may 08 invest in the North Slope natural gas pipeline; for a resident, the means may include providing 09 an option to designate an amount of a permanent fund dividend to be deducted for the 10 investment; 11 (2) whether the ownership interest in a North Slope natural gas pipeline should 12 be acquired from the portion of a North Slope natural gas pipeline acquired by the state, 13 through the purchase of stock in a publicly traded corporation that invests in a North Slope 14 natural gas pipeline, or some other means; 15 (3) the means for providing notice to a municipality, regional corporation, or 16 resident receiving an ownership interest that explains the type of ownership interest and the 17 rights and obligations related to that ownership interest; 18 (4) whether the ownership interest received by a municipality, regional 19 corporation, or resident may be transferred or assigned to another person and the means for 20 transferring the interest; 21 (5) the means by which the proportional share of a dividend or other income 22 may be distributed to a municipality, regional corporation, resident, or transferee of an interest 23 if the municipality, regional corporation, or resident receives an ownership interest acquired 24 by the state in a North Slope natural gas pipeline and the state receives a dividend or other 25 income from its ownership interest, and whether the payment should be subject to interest if 26 not timely distributed; 27 (6) the means by which the commissioner may identify a publicly traded 28 corporation that has an ownership interest in a North Slope natural gas pipeline that is subject 29 to investment by a municipality, regional corporation, or resident under the proposed plan; 30 (7) the means by which an individual may qualify as a resident for purposes of 31 investing in an ownership interest;
01 (8) whether the ownership interest held by a municipality, regional 02 corporation, or resident would be subject to project assessments; 03 (9) how cash calls for the project and the expansion of the project would be 04 managed; 05 (10) the income tax consequences to the holder of an ownership interest, 06 including the timing and recognition of income related to the ownership interest, including 07 differentiating income related to the ownership interest from the receipt of dividends or other 08 distributions; 09 (11) the risk that the receipt of a benefit from the project by a person other 10 than the state would make income received from the project by the state subject to federal 11 income tax; and 12 (12) constitutional issues that may be implicated by restricting ownership 13 interests under the plan to residents and municipalities in the state. 14 (d) In this section, 15 (1) "municipality" has the meaning given in AS 01.10.060; 16 (2) "North Slope natural gas pipeline" means a natural gas pipeline project that 17 transports natural gas produced in the state north of 68 degrees North latitude to a market in 18 the state or to tidewater for export from the state including a facility in the state for liquefying 19 natural gas for transport; 20 (3) "regional corporation" means a regional corporation organized under 43 21 U.S.C. 1606(a), as amended. 22 * Sec. 77. The uncodified law of the State of Alaska is amended by adding a new section to 23 read: 24 LEGISLATIVE BRIEFINGS. Before the first flow of gas in a North Slope natural gas 25 project developed under the authority of this Act, the parties to the project shall, at least once 26 every four months, provide briefings to interested legislators, legislative staff, and legislative 27 consultants on the progress of a North Slope natural gas project developed under the authority 28 of this Act. A briefing under this section must be accompanied by a written report provided by 29 the Department of Natural Resources of the amount of money the state may be obligated to 30 pay a third party under an agreement or contract under AS 38.05.020(b)(10) or (11) if a North 31 Slope natural gas project is terminated before the first flow of gas in the project.
01 * Sec. 78. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 APPLICABILITY. Sections 1 - 6 and 66 apply to tax years beginning after 04 December 31, 2014. 05 * Sec. 79. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 TRANSITION: REGULATIONS. The Department of Revenue and the Department of 08 Natural Resources may adopt regulations to implement this Act. The regulations take effect 09 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 10 provisions of this Act being implemented. 11 * Sec. 80. Sections 7 - 24, 27, 33 - 37, 39, 40, 48, 50, 67 - 77, and 79 of this Act take effect 12 immediately under AS 01.10.070(c). 13 * Sec. 81. Sections 1 - 6, 66, and 78 take effect July 1, 2014. 14 * Sec. 82. Section 49 of this Act takes effect January 1, 2021. 15 * Sec. 83. Except as provided in secs. 80 - 82 of this Act, this Act takes effect January 1, 16 2015.