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HB 247: "An Act relating to confidential information status and public record status of information in the possession of the Department of Revenue; relating to interest applicable to delinquent tax; relating to disclosure of oil and gas production tax credit information; relating to refunds for the gas storage facility tax credit, the liquefied natural gas storage facility tax credit, and the qualified in-state oil refinery infrastructure expenditures tax credit; relating to the minimum tax for certain oil and gas production; relating to the minimum tax calculation for monthly installment payments of estimated tax; relating to interest on monthly installment payments of estimated tax; relating to limitations for the application of tax credits; relating to oil and gas production tax credits for certain losses and expenditures; relating to limitations for nontransferable oil and gas production tax credits based on oil production and the alternative tax credit for oil and gas exploration; relating to purchase of tax credit certificates from the oil and gas tax credit fund; relating to a minimum for gross value at the point of production; relating to lease expenditures and tax credits for municipal entities; adding a definition for "qualified capital expenditure"; adding a definition for "outstanding liability to the state"; repealing oil and gas exploration incentive credits; repealing the limitation on the application of credits against tax liability for lease expenditures incurred before January 1, 2011; repealing provisions related to the monthly installment payments for estimated tax for oil and gas produced before January 1, 2014; repealing the oil and gas production tax credit for qualified capital expenditures and certain well expenditures; repealing the calculation for certain lease expenditures applicable before January 1, 2011; making conforming amendments; and providing for an effective date."

00                             HOUSE BILL NO. 247                                                                          
01 "An Act relating to confidential information status and public record status of                                         
02 information in the possession of the Department of Revenue; relating to interest                                        
03 applicable to delinquent tax; relating to disclosure of oil and gas production tax credit                               
04 information; relating to refunds for the gas storage facility tax credit, the liquefied                                 
05 natural gas storage facility tax credit, and the qualified in-state oil refinery                                        
06 infrastructure expenditures tax credit; relating to the minimum tax for certain oil and                                 
07 gas production; relating to the minimum tax calculation for monthly installment                                         
08 payments of estimated tax; relating to interest on monthly installment payments of                                      
09 estimated tax; relating to limitations for the application of tax credits; relating to oil and                          
10 gas production tax credits for certain losses and expenditures; relating to limitations for                             
11 nontransferable oil and gas production tax credits based on oil production and the                                      
12 alternative tax credit for oil and gas exploration; relating to purchase of tax credit                                  
01 certificates from the oil and gas tax credit fund; relating to a minimum for gross value at                             
02 the point of production; relating to lease expenditures and tax credits for municipal                                   
03 entities; adding a definition for "qualified capital expenditure"; adding a definition for                              
04 "outstanding liability to the state"; repealing oil and gas exploration incentive credits;                              
05 repealing the limitation on the application of credits against tax liability for lease                                  
06 expenditures incurred before January 1, 2011; repealing provisions related to the                                       
07 monthly installment payments for estimated tax for oil and gas produced before                                          
08 January 1, 2014; repealing the oil and gas production tax credit for qualified capital                                  
09 expenditures and certain well expenditures; repealing the calculation for certain lease                                 
10 expenditures applicable before January 1, 2011; making conforming amendments; and                                       
11 providing for an effective date."                                                                                       
12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
13    * Section 1. AS 38.05.036(a) is amended to read:                                                                   
14            (a)  The department may conduct audits regarding royalty and net profits under                               
15       oil and gas contracts, agreements, or leases under this chapter and regarding costs                               
16       related to exploration licenses entered into under AS 38.05.131 - 38.05.134 and                                   
17       exploration incentive credits under this chapter [OR UNDER AS 41.09]. For purposes                                
18       of audit under this section,                                                                                      
19                 (1)  the department may examine the books, papers, records, or                                          
20       memoranda of a person regarding matters related to the audit; and                                                 
21                 (2)  the records and premises where a business is conducted shall be                                    
22       open at all reasonable times for inspection by the department.                                                    
23    * Sec. 2. AS 38.05.036(b) is amended to read:                                                                      
24            (b)  The Department of Revenue may obtain from the department information                                    
25       relating to royalty and net profits payments and to exploration incentive credits under                           
26       this chapter [OR UNDER AS 41.09], whether or not that information is confidential.                                
27       The Department of Revenue may use the information in carrying out its functions and                               
01       responsibilities under AS 43, and shall hold that information confidential to the extent                          
02       required by an agreement with the department or by AS 38.05.035(a)(8) [,                                          
03       AS 41.09.010(d),] or AS 43.05.230.                                                                                
04    * Sec. 3. AS 38.05.036(c) is amended to read:                                                                      
05            (c)  The department may obtain from the Department of Revenue all                                            
06       information obtained under AS 43 relating to royalty and net profits and to exploration                           
07       incentive credits. The department may use the information for purposes of carrying out                            
08       its responsibilities and functions under this chapter [AND AS 41.09]. Information                                 
09       made available to the department that was obtained under AS 43 is confidential and                                
10       subject to the provisions of AS 43.05.230.                                                                        
11    * Sec. 4. AS 38.05.036(f) is amended to read:                                                                      
12            (f)  Except as otherwise provided in this section or in connection with official                             
13       investigations or proceedings of the department, it is unlawful for a current or former                           
14       officer, employee, or agent of the state to divulge information obtained by the                                   
15       department as a result of an audit under this section that is required by an agreement                            
16       with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)] to be kept                                      
17       confidential.                                                                                                     
18    * Sec. 5. AS 38.05.036(g) is amended to read:                                                                      
19            (g)  Nothing in this section prohibits the publication of statistics in a manner                             
20       that maintains the confidentiality of information to the extent required by an                                    
21       agreement with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)].                                      
22    * Sec. 6. AS 40.25.100(a) is amended to read:                                                                      
23            (a)  Information in the possession of the Department of Revenue that discloses                               
24       the particulars of the business or affairs of a taxpayer or other person, including                               
25       information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement                              
26       under AS 38.05.020(b)(12), is not a matter of public record, except as provided in                                
27       AS 43.05.230(i) - (l) [AS 43.05.230(i) OR (k)] or for purposes of investigation and                           
28       law enforcement. The information shall be kept confidential except when its                                       
29       production is required in an official investigation, administrative adjudication under                            
30       AS 43.05.405 - 43.05.499, or court proceeding. These restrictions do not prohibit the                             
31       publication of statistics presented in a manner that prevents the identification of                               
01       particular reports and items, prohibit the publication of tax lists showing the names of                          
02       taxpayers who are delinquent and relevant information that may assist in the collection                           
03       of delinquent taxes, or prohibit the publication of records, proceedings, and decisions                           
04       under AS 43.05.405 - 43.05.499.                                                                                   
05    * Sec. 7. AS 43.05.225 is amended to read:                                                                         
06            Sec. 43.05.225. Interest. Unless otherwise provided,                                                       
07                 (1)  a delinquent tax under this title,                                                                 
08                      [(A)  BEFORE JANUARY 1, 2014, BEARS INTEREST IN                                                    
09            EACH CALENDAR QUARTER AT THE RATE OF FIVE PERCENTAGE                                                         
10            POINTS ABOVE THE ANNUAL RATE CHARGED MEMBER BANKS                                                            
11            FOR ADVANCES BY THE 12TH FEDERAL RESERVE DISTRICT AS OF                                                      
12            THE FIRST DAY OF THAT CALENDAR QUARTER, OR AT THE                                                            
13            ANNUAL RATE OF 11 PERCENT, WHICHEVER IS GREATER,                                                             
14            COMPOUNDED QUARTERLY AS OF THE LAST DAY OF THAT                                                              
15            QUARTER; OR                                                                                                  
16                      (B)  ON AND AFTER JANUARY 1, 2014,] bears interest in                                              
17            each calendar quarter at the rate of seven [THREE] percentage points above                               
18            the annual rate charged member banks for advances by the 12th Federal                                        
19            Reserve District as of the first day of that calendar quarter compounded                                 
20            quarterly as of the last day of that quarter;                                                            
21                 (2)  the interest rate is 12 percent a year for                                                         
22                      (A)  delinquent fees payable under AS 05.15.095(c); and                                            
23                      (B)  unclaimed property that is not timely paid or delivered, as                                   
24            allowed by AS 34.45.470(a).                                                                                  
25    * Sec. 8. AS 43.05.230 is amended by adding a new subsection to read:                                              
26            (l)  The name of each person claiming a credit under AS 43.55, the aggregate                                 
27       amount of credits under AS 43.55, except for the credit in AS 43.55.024(j), claimed by                            
28       the taxpayer in the calendar year, and a description of the taxpayer's activities that                            
29       generated the credits claimed are public information.                                                             
30    * Sec. 9. AS 43.20.046(e) is amended to read:                                                                      
31            (e)  The department may use available money in the oil and gas tax credit fund                               
01       established in AS 43.55.028 to make the refund applied for under (d) of this section in                           
02       whole or in part if the department finds that (1) the claimant does not have an                                   
03       outstanding liability to the state [FOR UNPAID DELINQUENT TAXES UNDER                                             
04       THIS TITLE]; and (2) after application of all available tax credits, the claimant's total                         
05       tax liability under this chapter for the calendar year in which the claim is made is zero.                        
06       [IN THIS SUBSECTION, "UNPAID DELINQUENT TAX" MEANS AN AMOUNT                                                      
07       OF TAX FOR WHICH THE DEPARTMENT HAS ISSUED AN ASSESSMENT                                                          
08       THAT HAS NOT BEEN PAID AND, IF CONTESTED, HAS NOT BEEN FINALLY                                                    
09       RESOLVED IN THE TAXPAYER'S FAVOR.]                                                                                
10    * Sec. 10. AS 43.20.047(e) is amended to read:                                                                     
11            (e)  The department may use money available in the oil and gas tax credit fund                               
12       established in AS 43.55.028 to make a refund or payment under (d) of this section in                              
13       whole or in part if the department finds that                                                                     
14                 (1)  the claimant does not have an outstanding liability to the state                                   
15       [FOR UNPAID DELINQUENT TAXES UNDER THIS TITLE]; and                                                               
16                 (2)  after application of all available tax credits, the claimant's total tax                           
17       liability under this chapter for the calendar year in which the claim is made is zero. [IN                        
18       THIS SUBSECTION, "UNPAID DELINQUENT TAX" MEANS AN AMOUNT OF                                                       
19       TAX FOR WHICH THE DEPARTMENT HAS ISSUED AN ASSESSMENT THAT                                                        
20       HAS NOT BEEN PAID AND, IF CONTESTED, HAS NOT BEEN FINALLY                                                         
21       RESOLVED IN THE TAXPAYER'S FAVOR.]                                                                                
22    * Sec. 11. AS 43.20.053(e) is amended to read:                                                                     
23            (e)  The department may use money available in the oil and gas tax credit fund                               
24       established in AS 43.55.028 to make a refund or payment under (d) of this section in                              
25       whole or in part if the department finds that                                                                     
26                 (1)  the claimant does not have an outstanding liability to the state                                   
27       [FOR UNPAID DELINQUENT TAXES UNDER THIS TITLE]; and                                                               
28                 (2)  after application of all available tax credits, the claimant's total tax                           
29       liability under this chapter for the calendar year in which the claim is made is zero.                            
30    * Sec. 12. AS 43.55.011(f) is repealed and reenacted to read:                                                      
31            (f)  The levy of tax under (e) of this section for                                                           
01                 (1)  oil and gas produced before January 1, 2022, from leases or                                        
02       properties that include land north of 68 degrees North latitude, other than gas subject                           
03       to (o) of this section, may not be less than five percent of the gross value at the point                         
04       of production; and                                                                                                
05                 (2)  oil produced on and after January 1, 2022, from leases or properties                               
06       that include land north of 68 degrees North latitude, may not be less than five percent                           
07       of the gross value at the point of production.                                                                    
08    * Sec. 13. AS 43.55.020(a) is amended to read:                                                                     
09            (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                             
10       the tax as follows:                                                                                               
11                 (1)  for oil and gas produced before January 1, 2014, an installment                                    
12       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
13       as allowed by law, is due for each month of the calendar year on the last day of the                              
14       following month; except as otherwise provided under (2) of this subsection, the                                   
15       amount of the installment payment is the sum of the following amounts, less 1/12 of                               
16       the tax credits that are allowed by law to be applied against the tax levied by                                   
17       AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                              
18       not be less than zero:                                                                                            
19                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
20            produced from leases or properties in the state outside the Cook Inlet                                       
21            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
22            the greater of                                                                                               
23                           (i)  zero; or                                                                                 
24                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
25                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
26                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
27                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
28                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
29                 at the point of production of the oil and gas produced from the leases or                               
30                 properties during the month for which the installment payment is                                        
31                 calculated;                                                                                             
01                      (B)  for oil and gas produced from leases or properties subject                                    
02            to AS 43.55.011(f), the greatest of                                                                          
03                           (i)  zero;                                                                                    
04                           (ii)  zero percent, one percent, two percent, three                                           
05                 percent, or four percent, as applicable, of the gross value at the point of                             
06                 production of the oil and gas produced from the leases or properties                                    
07                 during the month for which the installment payment is calculated; or                                    
08                           (iii)  the sum of 25 percent and the tax rate calculated for                                  
09                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
10                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
11                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
12                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
13                 at the point of production of the oil and gas produced from those leases                                
14                 or properties during the month for which the installment payment is                                     
15                 calculated;                                                                                             
16                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
17            each lease or property, the greater of                                                                       
18                           (i)  zero; or                                                                                 
19                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
20                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
21                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
22                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
23                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
24                 produced from the lease or property from the gross value at the point of                                
25                 production of the oil or gas, respectively, produced from the lease or                                  
26                 property during the month for which the installment payment is                                          
27                 calculated;                                                                                             
28                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
29                           (i)  the sum of 25 percent and the tax rate calculated for                                    
30                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
31                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
01                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
02                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
03                 at the point of production of the oil and gas produced from the leases or                               
04                 properties during the month for which the installment payment is                                        
05                 calculated, but not less than zero; or                                                                  
06                           (ii)  four percent of the gross value at the point of                                         
07                 production of the oil and gas produced from the leases or properties                                    
08                 during the month, but not less than zero;                                                               
09                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
10       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
11       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
12       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
13       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
14       amount of taxable gas produced during the month for the amount of taxable gas                                     
15       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
16       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
17       amount of taxable oil produced during the calendar year;                                                          
18                 (3)  an installment payment of the estimated tax levied by                                              
19       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
20       on the last day of the following month; the amount of the installment payment is the                              
21       sum of                                                                                                            
22                      (A)  the applicable tax rate for oil provided under                                                
23            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
24            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
25            during the month; and                                                                                        
26                      (B)  the applicable tax rate for gas provided under                                                
27            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
28            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
29            during the month;                                                                                            
30                 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                       
31       applied as allowed by law, that exceeds the total of the amounts due as installment                               
01       payments of estimated tax is due on March 31 of the year following the calendar year                              
02       of production;                                                                                                    
03                 (5)  for oil and gas produced on and after January 1, 2014, and before                                  
04       January 1, 2022, an installment payment of the estimated tax levied by                                            
05       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
06       month of the calendar year on the last day of the following month; except as otherwise                            
07       provided under (6) of this subsection, the amount of the installment payment is the                               
08       sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be                          
09       applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                           
10       of the installment payment may not be less than zero:                                                             
11                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
12            produced from leases or properties in the state outside the Cook Inlet                                       
13            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
14            the greater of                                                                                               
15                           (i)  zero; or                                                                                 
16                           (ii)  35 percent multiplied by the remainder obtained by                                      
17                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
18                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
19                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
20                 at the point of production of the oil and gas produced from the leases or                               
21                 properties during the month for which the installment payment is                                        
22                 calculated;                                                                                             
23                      (B)  for oil and gas produced from leases or properties subject                                    
24            to AS 43.55.011(f), the greatest of                                                                          
25                           (i)  zero;                                                                                    
26                           (ii)  five [ZERO PERCENT, ONE PERCENT, TWO                                                
27                 PERCENT, THREE PERCENT, OR FOUR] percent [, AS                                                          
28                 APPLICABLE,] of the gross value at the point of production of the oil                                   
29                 and gas produced from the leases or properties during the month for                                     
30                 which the installment payment is calculated; or                                                         
31                           (iii)  35 percent multiplied by the remainder obtained by                                     
01                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
02                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
03                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
04                 at the point of production of the oil and gas produced from those leases                                
05                 or properties during the month for which the installment payment is                                     
06                 calculated, except that, for the purposes of this calculation, a reduction                              
07                 from the gross value at the point of production may apply for oil and                                   
08                 gas subject to AS 43.55.160(f) or (g);                                                                  
09                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
10            each lease or property, the greater of                                                                       
11                           (i)  zero; or                                                                                 
12                           (ii)  35 percent multiplied by the remainder obtained by                                      
13                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
14                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
15                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
16                 produced from the lease or property from the gross value at the point of                                
17                 production of the oil or gas, respectively, produced from the lease or                                  
18                 property during the month for which the installment payment is                                          
19                 calculated;                                                                                             
20                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
21                           (i)  35 percent multiplied by the remainder obtained by                                       
22                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
23                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
24                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
25                 at the point of production of the oil and gas produced from the leases or                               
26                 properties during the month for which the installment payment is                                        
27                 calculated, but not less than zero; or                                                                  
28                           (ii)  four percent of the gross value at the point of                                         
29                 production of the oil and gas produced from the leases or properties                                    
30                 during the month, but not less than zero;                                                               
31                 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                
01       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
02       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
03       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
04       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
05       amount of taxable gas produced during the month for the amount of taxable gas                                     
06       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
07       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
08       amount of taxable oil produced during the calendar year;                                                          
09                 (7)  for oil and gas produced on or after January 1, 2022, an installment                               
10       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
11       as allowed by law, is due for each month of the calendar year on the last day of the                              
12       following month; the amount of the installment payment is the sum of the following                                
13       amounts, less 1/12 of the tax credits that are allowed by law to be applied against the                           
14       tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment                            
15       payment may not be less than zero:                                                                                
16                      (A)  for oil produced from leases or properties that include land                                  
17            north of 68 degrees North latitude, the greatest of                                                          
18                           (i)  zero;                                                                                    
19                           (ii)  five [ZERO PERCENT, ONE PERCENT, TWO                                                
20                 PERCENT, THREE PERCENT, OR FOUR] percent [, AS                                                          
21                 APPLICABLE,] of the gross value at the point of production of the oil                                   
22                 produced from the leases or properties during the month for which the                                   
23                 installment payment is calculated; or                                                                   
24                           (iii)  35 percent multiplied by the remainder obtained by                                     
25                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
26                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
27                 deductible for the oil under AS 43.55.160(h)(1) from the gross value at                                 
28                 the point of production of the oil produced from those leases or                                        
29                 properties during the month for which the installment payment is                                        
30                 calculated, except that, for the purposes of this calculation, a reduction                              
31                 from the gross value at the point of production may apply for oil                                       
01                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
02                      (B)  for oil produced before or during the last calendar year                                      
03            under AS 43.55.024(b) for which the producer could take a tax credit under                                   
04            AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                               
05            sedimentary basin, no part of which is north of 68 degrees North latitude, other                             
06            than leases or properties subject to AS 43.55.011(p), the greater of                                         
07                           (i)  zero; or                                                                                 
08                           (ii)  35 percent multiplied by the remainder obtained by                                      
09                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
10                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
11                 deductible for the oil under AS 43.55.160(h)(2) from the gross value at                                 
12                 the point of production of the oil produced from the leases or properties                               
13                 during the month for which the installment payment is calculated;                                       
14                      (C)  for oil and gas produced from leases or properties subject                                    
15            to AS 43.55.011(p), except as otherwise provided under (8) of this subsection,                               
16            the sum of                                                                                                   
17                           (i)  35 percent multiplied by the remainder obtained by                                       
18                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
19                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
20                 deductible for the oil under AS 43.55.160(h)(3) from the gross value at                                 
21                 the point of production of the oil produced from the leases or properties                               
22                 during the month for which the installment payment is calculated, but                                   
23                 not less than zero; and                                                                                 
24                           (ii)  13 percent of the gross value at the point of                                           
25                 production of the gas produced from the leases or properties during the                                 
26                 month, but not less than zero;                                                                          
27                      (D)  for oil produced from leases or properties in the state, no                                   
28            part of which is north of 68 degrees North latitude, other than leases or                                    
29            properties subject to (B) or (C) of this paragraph, the greater of                                           
30                           (i)  zero; or                                                                                 
31                           (ii)  35 percent multiplied by the remainder obtained by                                      
01                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
02                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
03                 deductible for the oil under AS 43.55.160(h)(4) from the gross value at                                 
04                 the point of production of the oil produced from the leases or properties                               
05                 during the month for which the installment payment is calculated;                                       
06                      (E)  for gas produced from each lease or property in the state,                                    
07            other than a lease or property subject to AS 43.55.011(p), 13 percent of the                                 
08            gross value at the point of production of the gas produced from the lease or                                 
09            property during the month for which the installment payment is calculated, but                               
10            not less than zero;                                                                                          
11                 (8)  an amount calculated under (7)(C) of this subsection may not                                       
12       exceed four percent of the gross value at the point of production of the oil and gas                              
13       produced from leases or properties subject to AS 43.55.011(p) during the month for                                
14       which the installment payment is calculated;                                                                      
15                 (9)  for purposes of the calculation under [(1)(B)(ii),] (5)(B)(ii) [,] and                             
16       (7)(A)(ii) of this subsection, the [APPLICABLE] percentage of the gross value at the                              
17       point of production is determined under AS 43.55.011(f)(1) or (2) but substituting the                            
18       phrase "month for which the installment payment is calculated" in AS 43.55.011(f)(1)                              
19       and (2) for the phrase "calendar year for which the tax is due."                                                  
20    * Sec. 14. AS 43.55.020(g) is repealed and reenacted to read:                                                      
21            (g)  Notwithstanding any contrary provision of AS 43.05.225, an unpaid                                       
22       amount of an installment payment required under (a)(3), (5), (6), or (7) of this section                          
23       that is not paid when due bears interest (1) at the rate provided for an underpayment                             
24       under 26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from                                  
25       the date the installment payment is due until March 31 following the calendar year of                             
26       production; and (2) as provided for a delinquent tax under AS 43.05.225 after that                                
27       March 31, interest accrued under (1) of this subsection that remains unpaid after that                            
28       March 31 is treated as an addition to tax that bears interest under (2) of this subsection,                       
29       an unpaid amount of tax due under (a)(4) of this section that is not paid when due                                
30       bears interest as provided for a delinquent tax under AS 43.05.225.                                               
31    * Sec. 15. AS 43.55.020(h) is amended to read:                                                                     
01            (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                 
02                 (1)  an overpayment of an installment payment required under (a)(3)                                 
03       [(a)(1), (2), (3)], (5), (6), or (7) of this section bears interest at the rate provided for an                   
04       overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended,                                             
05       compounded daily, from the later of the date the installment payment is due or the date                           
06       the overpayment is made, until the earlier of                                                                     
07                      (A)  the date it is refunded or is applied to an underpayment; or                                  
08                      (B)  March 31 following the calendar year of production;                                           
09                 (2)  except as provided under (1) of this subsection, interest with                                     
10       respect to an overpayment is allowed only on any net overpayment of the payments                                  
11       required under (a) of this section that remains after the later of March 31 following the                         
12       calendar year of production or the date that the statement required under                                         
13       AS 43.55.030(a) is filed;                                                                                         
14                 (3)  interest is allowed under (2) of this subsection only from a date that                             
15       is 90 days after the later of March 31 following the calendar year of production or the                           
16       date that the statement required under AS 43.55.030(a) is filed; interest is not allowed                          
17       if the overpayment was refunded within the 90-day period;                                                         
18                 (4)  interest under (2) and (3) of this subsection is paid at the rate and in                           
19       the manner provided in AS 43.05.225(1).                                                                           
20    * Sec. 16. AS 43.55.020(i) is amended to read:                                                                     
21            (i)  Notwithstanding any contrary provision of AS 43.05.225 or (g) or (h) of                                 
22       this section, if the amount of a tax payment, including an installment payment, due                               
23       under (a)(3) - (5) [(a)(1) - (4)] of this section is affected by the retroactive application                  
24       of a regulation adopted under this chapter, the department shall determine whether the                            
25       retroactive application of the regulation caused an underpayment or an overpayment of                             
26       the amount due and adjust the interest due on the affected payment as follows:                                    
27                 (1)  if an underpayment of the amount due occurred, the department                                      
28       shall waive interest that would otherwise accrue for the underpayment before the first                            
29       day of the second month following the month in which the regulation became                                        
30       effective, if                                                                                                     
31                      (A)  the department determines that the producer's                                                 
01            underpayment resulted because the regulation was not in effect when the                                      
02            payment was due; and                                                                                         
03                      (B)  the producer demonstrates that it made a good faith                                           
04            estimate of its tax obligation in light of the regulations then in effect when the                           
05            payment was due and paid the estimated tax;                                                                  
06                 (2)  if an overpayment of the amount due occurred and the department                                    
07       determines that the producer's overpayment resulted because the regulation was not in                             
08       effect when the payment was due, the obligation for a refund for the overpayment does                             
09       not begin to accrue interest earlier than the following, as applicable:                                           
10                      (A)  except as otherwise provided under (B) of this paragraph,                                     
11            the first day of the second month following the month in which the regulation                                
12            became effective;                                                                                            
13                      (B)  90 days after an amended statement under AS 43.55.030(a)                                      
14            and an application to request a refund of production tax paid is filed, if the                               
15            overpayment was for a period for which an amended statement under                                            
16            AS 43.55.030(a) was required to be filed before the regulation became                                        
17            effective.                                                                                                   
18    * Sec. 17. AS 43.55 is amended by adding a new section to read:                                                    
19            Sec. 43.55.022. Limitations on tax credits. (a) Notwithstanding any contrary                               
20       provision of AS 43.55, the application of tax credits under AS 43.55 is subject to the                            
21       limitations set out in this section.                                                                              
22            (b)  A tax credit or a fraction of a tax credit under AS 43.55.023, 43.55.024,                               
23       and 43.55.025 may not be subtracted in calculating an installment payment of                                      
24       estimated tax required under AS 43.55.020(a) if the resulting amount of the                                       
25       installment payment would be less than the amount in AS 43.55.020(a)(5)(B)(ii) or                                 
26       43.55.020(a)(7)(A)(ii), as applicable.                                                                            
27            (c)  The total amount of tax credits under AS 43.55.023, 43.55.024, and                                      
28       43.55.025 that may be applied against a tax levied by AS 43.55.011(e) for a calendar                              
29       year may not exceed the sum of the amount of the tax credits or fractions of tax credits                          
30       that are allowed under (b) of this section to be subtracted in calculating the installment                        
31       payments of estimated tax for each month in the calendar year.                                                    
01    * Sec. 18. AS 43.55.023(b) is amended to read:                                                                     
02            (b)  [BEFORE JANUARY 1, 2014, A PRODUCER OR EXPLORER MAY                                                     
03       ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A                                                       
04       CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES                                                               
05       INCURRED ON AND AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1,                                                      
06       2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS                                                     
07       LOCATED NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR                                                         
08       EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 45                                                       
09       PERCENT OF A CARRIED-FORWARD ANNUAL LOSS.] For lease expenditures                                                 
10       incurred on and after January 1, 2016, to explore for, develop, or produce oil or gas                             
11       deposits located north of 68 degrees North latitude, a producer or explorer may elect to                          
12       take a tax credit in the amount of 35 percent of a carried-forward annual loss. For lease                         
13       expenditures incurred on or after January 1, 2014, to explore for, develop, or produce                            
14       oil or gas deposits located south of 68 degrees North latitude, a producer or explorer                            
15       may elect to take a tax credit in the amount of 25 percent of a carried-forward annual                            
16       loss. A credit under this subsection may be applied against a tax levied by                                       
17       AS 43.55.011(e). For purposes of this subsection, a carried-forward annual loss is the                            
18       amount of a producer's or explorer's adjusted lease expenditures under AS 43.55.165                               
19       and 43.55.170 for a previous calendar year that was not deductible in calculating                                 
20       production tax values for that calendar year under AS 43.55.160. For the purpose of                           
21       a credit under this subsection, any reduction under AS 43.55.160(f) or (g) is                                 
22       added back to the calculation of production tax values for that calendar year                                 
23       under AS 43.55.160 for the determination of a carried-forward annual loss.                                    
24    * Sec. 19. AS 43.55.023(c) is amended to read:                                                                     
25            (c)  A credit or portion of a credit under this section may not be used to reduce                            
26       a person's tax liability under AS 43.55.011(e) for any calendar year below the amount                         
27       calculated under AS 43.55.011(f) [ZERO], and any unused credit or portion of a                                
28       credit not used under this subsection may be applied in a later calendar year. An                             
29       unused credit or portion of a credit may not be applied in a calendar year later                              
30       than the 10th calendar year in which the carried-forward annual loss for which                                
31       the credit is claimed was incurred.                                                                           
01    * Sec. 20. AS 43.55.023(d) is amended to read:                                                                     
02            (d)  A person that is entitled to take a tax credit under this section that wishes                           
03       to transfer the unused credit to another person or obtain a cash payment under                                    
04       AS 43.55.028 may apply to the department for a transferable tax credit certificate. An                            
05       application under this subsection must be in a form prescribed by the department and                              
06       must include supporting information and documentation that the department                                         
07       reasonably requires. The department shall grant or deny an application, or grant an                               
08       application as to a lesser amount than that claimed and deny it as to the excess, not                             
09       later than 120 days after the latest of (1) March 31 of the year following the calendar                           
10       year in which the [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward                                              
11       annual loss for which the credit is claimed was incurred; (2) the date the statement                              
12       required under AS 43.55.030(a) or (e) was filed for the calendar year in which the                                
13       [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward annual loss for which                                          
14       the credit is claimed was incurred; or (3) the date the application was received by the                           
15       department. If, based on the information then available to it, the department is                                  
16       reasonably satisfied that the applicant is entitled to a credit, the department shall issue                       
17       the applicant a transferable tax credit certificate for the amount of the credit. A                               
18       certificate issued under this subsection expires after 10 years from the calendar                             
19       year in which the carried-forward annual loss for which the credit is claimed was                             
20       incurred [DOES NOT EXPIRE].                                                                                   
21    * Sec. 21. AS 43.55.023(e) is amended to read:                                                                     
22            (e)  A person to which a transferable tax credit certificate is issued under (d) of                          
23       this section may transfer the certificate to another person, and a transferee may further                         
24       transfer the certificate. Subject to the limitations set out in (b) - (d) [(a) - (d)] of this                 
25       section, and notwithstanding any action the department may take with respect to the                               
26       applicant under (g) of this section, the owner of a certificate may apply the credit or a                         
27       portion of the credit shown on the certificate only against a tax levied by                                       
28       AS 43.55.011(e). However, a credit shown on a transferable tax credit certificate may                             
29       not be applied to reduce a transferee's total tax liability under AS 43.55.011(e) for oil                         
30       and gas produced during a calendar year to less than 80 percent of the tax that would                             
31       otherwise be due without applying that credit. Any portion of a credit not used under                             
01       this subsection may be applied in a later period.                                                                 
02    * Sec. 22. AS 43.55.023 is amended by adding a new section to read:                                                
03            (q)  A producer or explorer shall comply with the notice and information                                     
04       provision requirements in AS 43.55.025(f)(2) for the lease expenditures incurred                                  
05       towards a credit under this section. The Department of Natural Resources shall hold                               
06       the confidential information under AS 43.55.025(f)(2)(C). For a producer or explorer                              
07       required to comply with the notice and information requirements of this section, the                              
08       Department of Natural Resources may publish the name of the producer or explorer,                                 
09       the location of the well or seismic exploration, and the date on which information                                
10       required to be submitted under this section may be released.                                                      
11    * Sec. 23. AS 43.55.024(g) is amended to read:                                                                     
12            (g)  A tax credit authorized by (c) of this section may not be applied to reduce                             
13       a producer's tax liability for any calendar year under AS 43.55.011(e) below the                              
14       amount calculated under AS 43.55.011(f) [ZERO].                                                               
15    * Sec. 24. AS 43.55.024(i) is amended to read:                                                                     
16            (i)  A producer may apply against the producer's tax liability for the calendar                              
17       year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under                                
18       AS 43.55.011(e) that meets one or more of the criteria in AS 43.55.160(f) or (g) and                              
19       that is produced during a calendar year after December 31, 2013. A tax credit                                     
20       authorized by this subsection may not reduce a producer's tax liability for a calendar                            
21       year under AS 43.55.011(e) below the amount calculated under AS 43.55.011(f)                                  
22       [ZERO].                                                                                                           
23    * Sec. 25. AS 43.55.025(i) is amended to read:                                                                     
24            (i)  For a production tax credit under this section,                                                         
25                 (1)  a credit may not be applied to reduce a taxpayer's tax liability under                             
26       AS 43.55.011(e) below the amount calculated under AS 43.55.011(f) [ZERO] for a                                
27       calendar year; and                                                                                                
28                 (2)  an amount of the production tax credit in excess of the amount that                                
29       may be applied for a calendar year under this subsection may be carried forward and                               
30       applied against the taxpayer's tax liability under AS 43.55.011(e) in one or more later                           
31       calendar years.                                                                                                   
01    * Sec. 26. AS 43.55.028(e) is amended to read:                                                                     
02            (e)  The department, on the written application of a person to whom a                                        
03       transferable tax credit certificate has been issued under AS 43.55.023(d) or former                               
04       AS 43.55.023(m) or to whom a production tax credit certificate has been issued under                              
05       AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                                    
06       purchase, in whole or in part, the certificate if the department finds that                                       
07                 (1)  the calendar year of the purchase is not earlier than the first                                    
08       calendar year for which the credit shown on the certificate would otherwise be allowed                            
09       to be applied against a tax;                                                                                      
10                 (2)  the applicant does not have an outstanding liability to the state                                  
11       [FOR UNPAID DELINQUENT TAXES UNDER THIS TITLE];                                                                   
12                 (3)  the applicant's total tax liability under AS 43.55.011(e), after                                   
13       application of all available tax credits, for the calendar year in which the application is                       
14       made is zero;                                                                                                     
15                 (4)  the applicant's average daily production of oil and gas taxable                                    
16       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
17       the application is made was not more than 50,000 BTU equivalent barrels; [AND]                                    
18                 (5)  the applicant's revenues generated from the applicant's oil and                                
19       gas business, including the revenues of the applicant's affiliates if the applicant is                        
20       part of an affiliated group, during the calendar year preceding the calendar year                             
21       in which the application is made were less than $10,000,000,000;                                              
22                 (6)  the amount expended for the purchase and amounts previously                                    
23       purchased from the applicant during the calendar year the sum of which would                                  
24       not exceed $25,000,000; and                                                                                   
25                 (7)  the purchase is consistent with this section and regulations adopted                           
26       under this section.                                                                                               
27    * Sec. 27. AS 43.55.028 is amended by adding a new subsections to read:                                            
28            (j)  The percentage of a transferable tax credit certificate or a production tax                             
29       credit certificate purchased by the department may not exceed the percentage of the                               
30       applicant's workforce in the state in the previous calendar year that were resident                               
31       workers. The applicant's workforce in the state includes resident workers employed by                             
01       the applicant's contractors. An amount of a credit not purchased due to application of                            
02       this subsection may be applied against the applicant's tax liability under this chapter.                          
03       In this subsection, "resident worker" has the meaning given in AS 43.40.092(b).                                   
04    * Sec. 28. AS 43.55.029(a) is amended to read:                                                                     
05            (a)  An explorer or producer that has applied for a production tax credit under                              
06       AS 43.55.023(b) [AS 43.55.023(a), (b), OR (l)] or 43.55.025(a) may make a present                             
07       assignment of the production tax credit certificate expected to be issued by the                                  
08       department to a third-party assignee. The assignment may be made either when [AT                              
09       THE TIME] the application is filed with the department or not later than 30 days after                            
10       the date of filing with the department. Once a notice of assignment in compliance with                            
11       this section is filed with the department, the assignment is irrevocable and cannot be                            
12       modified by the explorer or producer without the written consent of the assignee                                  
13       named in the assignment. If a production tax credit certificate is issued to the explorer                         
14       or producer, the notice of assignment remains effective and shall be filed with the                               
15       department by the explorer or producer together with any application for the                                      
16       department to purchase the certificate under AS 43.55.028(e).                                                     
17    * Sec. 29. AS 43.55.030(a) is amended to read:                                                                     
18            (a)  A producer that produces oil or gas from a lease or property in the state                               
19       during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                               
20       for that oil or gas, shall file with the department on March 31 of the following year a                           
21       statement, under oath, in a form prescribed by the department, giving, with other                                 
22       information required, the following:                                                                              
23                 (1)  a description of each lease or property from which oil or gas was                                  
24       produced, by name, legal description, lease number, or accounting codes assigned by                               
25       the department;                                                                                                   
26                 (2)  the names of the producer and, if different, the person paying the                                 
27       tax, if any;                                                                                                      
28                 (3)  the gross amount of oil and the gross amount of gas produced from                                  
29       each lease or property, separately identifying the gross amount of gas produced from                              
30       each oil and gas lease to which an effective election under AS 43.55.014(a) applies,                              
31       the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of                             
01       the gross amount of oil and gas owned by the producer;                                                            
02                 (4)  the gross value at the point of production of the oil and of the gas                               
03       produced from each lease or property owned by the producer and the costs of                                       
04       transportation of the oil and gas;                                                                                
05                 (5)  the name of the first purchaser and the price received for the oil and                             
06       for the gas, unless relieved from this requirement in whole or in part by the                                     
07       department;                                                                                                       
08                 (6)  the producer's qualified capital expenditures, [AS DEFINED IN                                      
09       AS 43.55.023,] other lease expenditures under AS 43.55.165, and adjustments or other                              
10       payments or credits under AS 43.55.170;                                                                           
11                 (7)  the production tax values of the oil and gas under AS 43.55.160(a)                                 
12       or of the oil under AS 43.55.160(h), as applicable;                                                               
13                 (8)  any claims for tax credits to be applied; and                                                      
14                 (9)  calculations showing the amounts, if any, that were or are due                                     
15       under AS 43.55.020(a) and interest on any underpayment or overpayment.                                            
16    * Sec. 30. AS 43.55.030(e) is amended to read:                                                                     
17            (e)  An explorer or producer that incurs a lease expenditure under                                           
18       AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar                                 
19       year but does not produce oil or gas from a lease or property in the state during the                             
20       calendar year shall file with the department, on March 31 of the following year, a                                
21       statement, under oath, in a form prescribed by the department, giving, with other                                 
22       information required, the following:                                                                              
23                 (1)  the explorer's or producer's qualified capital expenditures, [AS                                   
24       DEFINED IN AS 43.55.023,] other lease expenditures under AS 43.55.165, and                                        
25       adjustments or other payments or credits under AS 43.55.170; and                                                  
26                 (2)  if the explorer or producer receives a payment or credit under                                     
27       AS 43.55.170, calculations showing whether the explorer or producer is liable for a                               
28       tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount.                                                 
29    * Sec. 31. AS 43.55.150 is amended by adding a new subsection to read:                                             
30            (d)  The gross value at the point of production may not be less than zero.                                   
31    * Sec. 32. AS 43.55.165(a) is amended to read:                                                                     
01            (a)  For [EXCEPT AS PROVIDED IN (j) AND (k) OF THIS SECTION,                                             
02       FOR] purposes of this chapter, a producer's lease expenditures for a calendar year are                            
03                 (1)  costs, other than items listed in (e) of this section, that are                                    
04                      (A)  incurred by the producer during the calendar year after                                       
05            March 31, 2006, to explore for, develop, or produce oil or gas deposits located                              
06            within the producer's leases or properties in the state or, in the case of land in                           
07            which the producer does not own an operating right, operating interest, or                                   
08            working interest, to explore for oil or gas deposits within other land in the                                
09            state; and                                                                                                   
10                      (B)  allowed by the department by regulation, based on the                                         
11            department's determination that the costs satisfy the following three                                        
12            requirements:                                                                                                
13                           (i)  the costs must be incurred upstream of the point of                                      
14                 production of oil and gas;                                                                              
15                           (ii)  the costs must be ordinary and necessary costs of                                       
16                 exploring for, developing, or producing, as applicable, oil or gas                                      
17                 deposits; and                                                                                           
18                           (iii)  the costs must be direct costs of exploring for,                                       
19                 developing, or producing, as applicable, oil or gas deposits; and                                       
20                 (2)  a reasonable allowance for that calendar year, as determined under                                 
21       regulations adopted by the department, for overhead expenses that are directly related                            
22       to exploring for, developing, or producing, as applicable, the oil or gas deposits.                               
23    * Sec. 33. AS 43.55.165(e) is amended to read:                                                                     
24            (e)  For purposes of this section, lease expenditures do not include                                         
25                 (1)  depreciation, depletion, or amortization;                                                          
26                 (2)  oil or gas royalty payments, production payments, lease profit                                     
27       shares, or other payments or distributions of a share of oil or gas production, profit, or                        
28       revenue, except that a producer's lease expenditures applicable to oil and gas produced                           
29       from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net                             
30       profit paid to the state under that lease;                                                                        
31                 (3)  taxes based on or measured by net income;                                                          
01                 (4)  interest or other financing charges or costs of raising equity or debt                             
02       capital;                                                                                                          
03                 (5)  acquisition costs for a lease or property or exploration license;                                  
04                 (6)  costs arising from fraud, wilful misconduct, gross negligence,                                     
05       violation of law, or failure to comply with an obligation under a lease, permit, or                               
06       license issued by the state or federal government;                                                                
07                 (7)  fines or penalties imposed by law;                                                                 
08                 (8)  costs of arbitration, litigation, or other dispute resolution activities                           
09       that involve the state or concern the rights or obligations among owners of interests in,                         
10       or rights to production from, one or more leases or properties or a unit;                                         
11                 (9)  costs incurred in organizing a partnership, joint venture, or other                                
12       business entity or arrangement;                                                                                   
13                 (10)  amounts paid to indemnify the state; the exclusion provided by                                    
14       this paragraph does not apply to the costs of obtaining insurance or a surety bond from                           
15       a third-party insurer or surety;                                                                                  
16                 (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                
17                 (12)  an expenditure otherwise deductible under (b) of this section that                                
18       is a result of an internal transfer, a transaction with an affiliate, or a transaction                            
19       between related parties, or is otherwise not an arm's length transaction, unless the                              
20       producer establishes to the satisfaction of the department that the amount of the                                 
21       expenditure does not exceed the fair market value of the expenditure;                                             
22                 (13)  an expenditure incurred to purchase an interest in any corporation,                               
23       partnership, limited liability company, business trust, or any other business entity,                             
24       whether or not the transaction is treated as an asset sale for federal income tax                                 
25       purposes;                                                                                                         
26                 (14)  a tax levied under AS 43.55.011 or 43.55.014;                                                     
27                 (15)  costs incurred for dismantlement, removal, surrender, or                                          
28       abandonment of a facility, pipeline, well pad, platform, or other structure, or for the                           
29       restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in                       
30       conjunction with dismantlement, removal, surrender, or abandonment; a cost is not                                 
31       excluded under this paragraph if the dismantlement, removal, surrender, or                                        
01       abandonment for which the cost is incurred is undertaken for the purpose of replacing,                            
02       renovating, or improving the facility, pipeline, well pad, platform, or other structure;                          
03                 (16)  costs incurred for containment, control, cleanup, or removal in                                   
04       connection with any unpermitted release of oil or a hazardous substance and any                                   
05       liability for damages imposed on the producer or explorer for that unpermitted release;                           
06       this paragraph does not apply to the cost of developing and maintaining an oil                                    
07       discharge prevention and contingency plan under AS 46.04.030;                                                     
08                 (17)  costs incurred to satisfy a work commitment under an exploration                                  
09       license under AS 38.05.132;                                                                                       
10                 (18)  that portion of expenditures, that would otherwise be qualified                                   
11       capital expenditures, [AS DEFINED IN AS 43.55.023,] incurred during a calendar                                    
12       year that are less than the product of $0.30 multiplied by the total taxable production                           
13       from each lease or property, in BTU equivalent barrels, during that calendar year,                                
14       except that, when a portion of a calendar year is subject to this provision, the                                  
15       expenditures and volumes shall be prorated within that calendar year;                                             
16                 (19)  costs incurred for repair, replacement, or deferred maintenance of                                
17       a facility, a pipeline, a structure, or equipment, other than a well, that results in or is                       
18       undertaken in response to a failure, problem, or event that results in an unscheduled                             
19       interruption of, or reduction in the rate of, oil or gas production; or costs incurred for                        
20       repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or                           
21       equipment, other than a well, that is undertaken in response to, or is otherwise                                  
22       associated with, an unpermitted release of a hazardous substance or of gas; however,                              
23       costs under this paragraph that would otherwise constitute lease expenditures under (a)                           
24       and (b) of this section may be treated as lease expenditures if the department                                    
25       determines that the repair or replacement is solely necessitated by an act of war, by an                          
26       unanticipated grave natural disaster or other natural phenomenon of an exceptional,                               
27       inevitable, and irresistible character, the effects of which could not have been                                  
28       prevented or avoided by the exercise of due care or foresight, or by an intentional or                            
29       negligent act or omission of a third party, other than a party or its agents in privity of                        
30       contract with, or employed by, the producer or an operator acting for the producer, but                           
31       only if the producer or operator, as applicable, exercised due care in operating and                              
01       maintaining the facility, pipeline, structure, or equipment, and took reasonable                                  
02       precautions against the act or omission of the third party and against the consequences                           
03       of the act or omission; in this paragraph,                                                                        
04                      (A)  "costs incurred for repair, replacement, or deferred                                          
05            maintenance of a facility, a pipeline, a structure, or equipment" includes costs                             
06            to dismantle and remove the facility, pipeline, structure, or equipment that is                              
07            being replaced;                                                                                              
08                      (B)  "hazardous substance" has the meaning given in                                                
09            AS 46.03.826;                                                                                                
10                      (C)  "replacement" includes renovation or improvement;                                             
11                 (20)  costs incurred to construct, acquire, or operate a refinery or crude                              
12       oil topping plant, regardless of whether the products of the refinery or topping plant                            
13       are used in oil or gas exploration, development, or production operations; however, if                            
14       a producer owns a refinery or crude oil topping plant that is located on or near the                              
15       premises of the producer's lease or property in the state and that processes the                                  
16       producer's oil produced from that lease or property into a product that the producer                              
17       uses in the operation of the lease or property in drilling for or producing oil or gas, the                       
18       producer's lease expenditures include the amount calculated by subtracting from the                               
19       fair market value of the product used the prevailing value, as determined under                                   
20       AS 43.55.020(f), of the oil that is processed;                                                                    
21                 (21)  costs of lobbying, public relations, public relations advertising, or                             
22       policy advocacy.                                                                                                  
23    * Sec. 34. AS 43.55.165(f) is amended to read:                                                                     
24            (f)  For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as                               
25       to expenditures incurred to explore for an oil or gas deposit located within land in                              
26       which an explorer does not own a working interest, the term "producer" in this section                            
27       includes "explorer."                                                                                              
28    * Sec. 35. AS 43.55.170(c) is amended to read:                                                                     
29            (c)  For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as                               
30       to expenditures incurred to explore for an oil or gas deposit located within land in                              
31       which an explorer does not own a working interest, the term "producer" in this section                            
01       includes "explorer."                                                                                              
02    * Sec. 36. AS 43.55.890 is amended to read:                                                                        
03            Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary                                
04       provision of AS 40.25.100, and regardless of whether the information is considered                                
05       under AS 43.05.230(e) to constitute statistics classified to prevent the identification of                        
06       particular returns or reports, the department may publish the following information                               
07       under this chapter, if aggregated among three or more producers or explorers, showing                             
08       by month or calendar year and by lease or property, unit, or area of the state:                                   
09                 (1)  the amount of oil or gas production;                                                               
10                 (2)  the amount of taxes levied under this chapter or paid under this                                   
11       chapter;                                                                                                          
12                 (3)  the effective tax rates under this chapter;                                                        
13                 (4)  the gross value of oil or gas at the point of production;                                          
14                 (5)  the transportation costs for oil or gas;                                                           
15                 (6)  qualified capital expenditures [, AS DEFINED IN AS 43.55.023];                                     
16                 (7)  exploration expenditures under AS 43.55.025;                                                       
17                 (8)  production tax values of oil or gas under AS 43.55.160;                                            
18                 (9)  lease expenditures under AS 43.55.165;                                                             
19                 (10)  adjustments to lease expenditures under AS 43.55.170;                                             
20                 (11)  tax credits applicable or potentially applicable against taxes levied                             
21       by this chapter.                                                                                                  
22    * Sec. 37. AS 43.55.895(b) is amended to read:                                                                     
23            (b)  A municipal entity subject to taxation because of this section is eligible for                          
24       [ALL] tax credits proportionate to its production taxable under AS 43.55.011(e). A                            
25       municipal entity shall allocate its lease expenditures in proportion to its                                   
26       production taxable under AS 43.55.011(e) [UNDER THIS CHAPTER TO THE                                           
27       SAME EXTENT AS ANY OTHER PRODUCER].                                                                               
28    * Sec. 38. AS 43.55.900 is amended by adding a new paragraph to read:                                              
29                 (26)  "qualified capital expenditure"                                                                   
30                      (A)  means except as otherwise provided in (B) of this                                             
31            paragraph, an expenditure that is a lease expenditure under AS 43.55.165 and                                 
01            is                                                                                                           
02                           (i)  incurred for geological or geophysical exploration;                                      
03                           (ii)  treated as a capitalized expenditure under 26 U.S.C.                                    
04                 (Internal Revenue Code), as amended, regardless of elections made                                       
05                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
06                 treated as a capitalized expenditure for federal income tax reporting                                   
07                 purposes by the person incurring the expenditure; or                                                    
08                           (iii)  treated as a capitalized expenditure under 26 U.S.C.                                   
09                 (Internal Revenue Code), as amended, regardless of elections made                                       
10                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
11                 eligible to be deducted as an expense under 26 U.S.C. 263(c) (Internal                                  
12                 Revenue Code), as amended;                                                                              
13                      (B)  does not include an expenditure incurred to acquire an asset                                  
14                           (i)  the cost of previously acquiring which was a lease                                       
15                 expenditure under AS 43.55.165 or would have been a lease                                               
16                 expenditure under AS 43.55.165 if it had been incurred after March 31,                                  
17                 2006; or                                                                                                
18                           (ii)  that has previously been placed in service in the                                       
19                 state; an expenditure to acquire an asset is not excluded under this                                    
20                 paragraph if not more than an immaterial portion of the asset meets a                                   
21                 description under this paragraph; for purposes of this subparagraph,                                    
22                 "asset" includes geological, geophysical, and well data and                                             
23                 interpretations.                                                                                        
24    * Sec. 39. AS 43.99.950 is amended by adding a new paragraph to read:                                              
25                 (3)  "outstanding liability to the state" means an amount of tax, interest,                             
26       penalty, fee, rental, royalty, or other charge for which the state has issued a demand                            
27       for payment that has not been paid when due and, if contested, has not been finally                               
28       resolved against the state.                                                                                       
29    * Sec. 40. AS 38.05.180(i); AS 41.09.010, 41.09.020, 41.09.030, 41.09.090;                                         
30 AS 43.20.053(j)(4); AS 43.55.011(m), 43.55.020(a)(1), 43.55.020(a)(2), 43.55.023(a),                                    
31 43.55.023(l), 43.55.023(n), AS  43.55.023(o), 43.55.028(i), 43.55.075(d)(1), 43.55.165(j), and                          
01 43.55.165(k) are repealed.                                                                                              
02    * Sec. 41. The uncodified law of the State of Alaska is amended by adding a new section to                         
03 read:                                                                                                                   
04       APPLICABILITY. (a) Section 17 of this Act applies to credits against the oil and gas                              
05 production tax levied by AS 43.55.011(e) for oil and gas produced on and after January 1,                               
06 2016.                                                                                                                   
07       (b)  Sections 8 - 11 and 26 - 28 of this Act, and the repeal of AS 43.55.023(a) and (l)                           
08 in sec. 40 of this Act, apply to expenditures incurred on and after July 1, 2016.                                       
09       (c)  Sections 12, 13, and 16 of this Act apply to oil and gas produced on and after                               
10 July 1, 2016.                                                                                                           
11       (d)  For the purpose of determining the last calendar year that a credit or an unused                             
12 portion of a credit under AS 43.55.023(c) or credit certificate under AS 43.55.023(d) may be                            
13 carried forward due to the limitations in AS 43.55.023(c) and (d), as amended by secs. 19 and                           
14 20 of this Act,                                                                                                         
15            (1)  the carried-forward annual loss for a tax credit under AS 43.55.023(c), for                             
16 expenditures incurred before July 1, 2016, is considered to have been incurred on July 1,                               
17 2016;                                                                                                                   
18            (2)  the carried-forward annual loss for a tax credit certificate under                                      
19 AS 43.55.023(d), for expenditures incurred before July 1, 2016, is considered to have been                              
20 incurred on the later of July 1, 2016, or the date the tax credit certificate is issued.                                
21    * Sec. 42. The uncodified law of the State of Alaska is amended by adding a new section to                         
22 read:                                                                                                                   
23       TRANSITION: REGULATIONS. The Department of Revenue and the Department of                                          
24 Natural Resources may adopt regulations necessary to implement the changes made by this                                 
25 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not                                 
26 before the effective date of the law implemented by the regulation. The Department of                                   
27 Revenue shall adopt regulations governing the use of tax credits under AS 43.55 for a                                   
28 calendar year for which the applicable tax credit provisions of AS 43.55 differ as between                              
29 parts of the year as a result of this Act.                                                                              
30    * Sec. 43. The uncodified law of the State of Alaska is amended by adding a new section to                         
31 read:                                                                                                                   
01       TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any                                                     
02 contrary provision of AS 44.62.240,                                                                                     
03            (1)  if the Department of Revenue expressly designates in a regulation that the                              
04 regulation applies retroactively, a regulation adopted by the Department of Revenue to                                  
05 implement, interpret, make specific, or otherwise carry out this Act may apply retroactively to                         
06 January 1, 2016 or July 1, 2016, as applicable;                                                                         
07            (2)  a regulation adopted by the Department of Natural Resources to                                          
08 implement, interpret, make specific, or otherwise carry out statutory provisions for the                                
09 administration of oil and gas leases issued under AS 38.05.180(f)(3)(B), (D), or (E), to the                            
10 extent the regulation relates to the treatment of oil and gas production taxes in determining net                       
11 profits under those leases, may apply retroactively to January 1, 2016, or July 1, 2016, as                             
12 applicable, if the Department of Natural Resources expressly designates in the regulation that                          
13 the regulation applies retroactively to one of those dates.                                                             
14    * Sec. 44. The uncodified law of the State of Alaska is amended by adding a new section to                         
15 read:                                                                                                                   
16       RETROACTIVITY. Section. 17 of this Act is retroactive to January 1, 2016.                                         
17    * Sec. 45. Sections 17 and 42 - 44 of this Act take effect immediately under                                       
18 AS 01.10.070(c).                                                                                                        
19    * Sec. 46. Except as provided in sec. 45 of this Act, this Act takes effect July 1, 2016.