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CSHB 247(FIN): "An Act relating to interest applicable to delinquent tax; relating to the oil and gas production tax, tax payments, and credits; relating to the minimum oil and gas production tax; 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 assessment of an oil and gas production tax imposed; relating to oil and gas lease expenditures and production tax credits for municipal entities; relating to a bond or cash deposit required for an oil or gas business; establishing a legislative working group to study the tax structure for oil and gas produced south of 68 degrees North latitude; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 247(FIN)                                                                    
01 "An Act relating to interest applicable to delinquent tax; relating to the oil and gas                                  
02 production tax, tax payments, and credits; relating to the minimum oil and gas                                          
03 production tax; relating to refunds for the gas storage facility tax credit, the liquefied                              
04 natural gas storage facility tax credit, and the qualified in-state oil refinery                                        
05 infrastructure expenditures tax credit; relating to the assessment of an oil and gas                                    
06 production tax imposed; relating to oil and gas lease expenditures and production tax                                   
07 credits for municipal entities; relating to a bond or cash deposit required for an oil or                               
08 gas business; establishing a legislative working group to study the tax structure for oil                               
09 and gas produced south of 68 degrees North latitude; and providing for an effective                                     
10 date."                                                                                                                  
11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
12    * Section 1. AS 38.05.036(a) is amended to read:                                                                   
01            (a)  The department may conduct audits regarding royalty and net profits under                               
02       oil and gas contracts, agreements, or leases under this chapter and regarding costs                               
03       related to exploration licenses entered into under AS 38.05.131 - 38.05.134 and                                   
04       exploration incentive credits under this chapter [OR UNDER AS 41.09]. For purposes                                
05       of an audit under this section,                                                                               
06                 (1)  the department may examine the books, papers, records, or                                          
07       memoranda of a person regarding matters related to the audit; and                                                 
08                 (2)  the records and premises where a business is conducted shall be                                    
09       open at all reasonable times for inspection by the department.                                                    
10    * Sec. 2. AS 38.05.036(b) is amended to read:                                                                      
11            (b)  The Department of Revenue may obtain from the department information                                    
12       relating to royalty and net profits payments and to exploration incentive credits under                           
13       this chapter [OR UNDER AS 41.09], whether or not that information is confidential.                                
14       The Department of Revenue may use the information in carrying out its functions and                               
15       responsibilities under AS 43, and shall hold that information confidential to the extent                          
16       required by an agreement with the department or by AS 38.05.035(a)(8) [,                                          
17       AS 41.09.010(d),] or AS 43.05.230.                                                                                
18    * Sec. 3. AS 38.05.036(c) is amended to read:                                                                      
19            (c)  The department may obtain from the Department of Revenue all                                            
20       information obtained under AS 43 relating to royalty and net profits and to exploration                           
21       incentive credits. The department may use the information for purposes of carrying out                            
22       its responsibilities and functions under this chapter [AND AS 41.09]. Information                                 
23       made available to the department that was obtained under AS 43 is confidential and                                
24       subject to the provisions of AS 43.05.230.                                                                        
25    * Sec. 4. AS 38.05.036(f) is amended to read:                                                                      
26            (f)  Except as otherwise provided in this section or in connection with official                             
27       investigations or proceedings of the department, it is unlawful for a current or former                           
28       officer, employee, or agent of the state to divulge information obtained by the                                   
29       department as a result of an audit under this section that is required by an agreement                            
30       with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)] to be kept                                      
31       confidential.                                                                                                     
01    * Sec. 5. AS 38.05.036(g) is amended to read:                                                                      
02            (g)  Nothing in this section prohibits the publication of statistics in a manner                             
03       that maintains the confidentiality of information to the extent required by an                                    
04       agreement with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)].                                      
05    * Sec. 6. 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 each calendar                                       
09            quarter at the rate of five percentage points above the annual rate charged                                  
10            member banks for advances by the 12th Federal Reserve District as of the first                               
11            day of that calendar quarter, or at the annual rate of 11 percent, whichever is                              
12            greater, compounded quarterly as of the last day of that quarter; [OR]                                       
13                      (B)  on and after January 1, 2014, and before January 1, 2017,                                 
14            bears interest in each calendar quarter at the rate of three percentage points                               
15            above the annual rate charged member banks for advances by the 12th Federal                                  
16            Reserve District as of the first day of that calendar quarter;                                           
17                      (C)  on and after January 1, 2017, bears interest                                              
18                           (i)  for the first four years after a tax becomes                                         
19                 delinquent, in each calendar quarter at the rate of five percentage                                 
20                 points above the annual rate charged member banks for advances                                      
21                 by the 12th Federal Reserve District as of the first day of that                                    
22                 calendar quarter, compounded quarterly as of the last day of that                                   
23                 quarter; and                                                                                        
24                           (ii)  after the first four years after a tax becomes                                      
25                 delinquent, in each calendar quarter at a rate of five percentage                                   
26                 points above the annual rate charged member banks for advances                                      
27                 by the 12th Federal Reserve District as of the first day of that                                    
28                 calendar quarter;                                                                                   
29                 (2)  the interest rate is 12 percent a year for                                                         
30                      (A)  delinquent fees payable under AS 05.15.095(c); and                                            
31                      (B)  unclaimed property that is not timely paid or delivered, as                                   
01            allowed by AS 34.45.470(a).                                                                                  
02    * Sec. 7. AS 43.20.046(e) is amended to read:                                                                      
03            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
04       may use available money in the oil and gas tax credit fund established in AS 43.55.028                            
05       to make the refund applied for under (d) of this section in whole or in part if the                               
06       department finds that, [(1) THE CLAIMANT DOES NOT HAVE AN                                                     
07       OUTSTANDING LIABILITY TO THE STATE FOR UNPAID DELINQUENT                                                          
08       TAXES UNDER THIS TITLE; AND (2)] after application of all available tax credits,                                  
09       the claimant's total tax liability under this chapter for the calendar year in which the                          
10       claim is made is zero. [IN THIS SUBSECTION, "UNPAID DELINQUENT TAX"                                               
11       MEANS AN AMOUNT OF TAX FOR WHICH THE DEPARTMENT HAS ISSUED                                                        
12       AN ASSESSMENT THAT HAS NOT BEEN PAID AND, IF CONTESTED, HAS                                                       
13       NOT BEEN FINALLY RESOLVED IN THE TAXPAYER'S FAVOR.]                                                               
14    * Sec. 8. AS 43.20.047(e) is amended to read:                                                                      
15            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
16       may use money available in the oil and gas tax credit fund established in AS 43.55.028                            
17       to make a refund or payment under (d) of this section in whole or in part if the                                  
18       department finds that, [(1) THE CLAIMANT DOES NOT HAVE AN                                                     
19       OUTSTANDING LIABILITY TO THE STATE FOR UNPAID DELINQUENT                                                          
20       TAXES UNDER THIS TITLE; AND (2)] after application of all available tax credits,                                  
21       the claimant's total tax liability under this chapter for the calendar year in which the                          
22       claim is made is zero. [IN THIS SUBSECTION, "UNPAID DELINQUENT TAX"                                               
23       MEANS AN AMOUNT OF TAX FOR WHICH THE DEPARTMENT HAS ISSUED                                                        
24       AN ASSESSMENT THAT HAS NOT BEEN PAID AND, IF CONTESTED, HAS                                                       
25       NOT BEEN FINALLY RESOLVED IN THE TAXPAYER'S FAVOR.]                                                               
26    * Sec. 9. AS 43.20.053(e) is amended to read:                                                                      
27            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
28       may use money available in the oil and gas tax credit fund established in AS 43.55.028                            
29       to make a refund or payment under (d) of this section in whole or in part if the                                  
30       department finds that,                                                                                        
31                 [(1)  THE CLAIMANT DOES NOT HAVE AN OUTSTANDING                                                         
01       LIABILITY TO THE STATE FOR UNPAID DELINQUENT TAXES UNDER THIS                                                     
02       TITLE; AND                                                                                                        
03                 (2)]  after application of all available tax credits, the claimant's total tax                          
04       liability under this chapter for the calendar year in which the claim is made is zero.                            
05    * Sec. 10. AS 43.55.011(f) is amended to read:                                                                     
06            (f)  The levy of tax under (e) of this section for                                                           
07                 (1)  oil and gas produced before January 1, 2017 [JANUARY 1,                                        
08       2022], from leases or properties that include land north of 68 degrees North latitude,                            
09       other than gas subject to (o) of this section, may not be less than                                               
10                      (A)  four percent of the gross value at the point of production                                    
11            when the average price per barrel for Alaska North Slope crude oil for sale on                               
12            the United States West Coast during the calendar year for which the tax is due                               
13            is more than $25;                                                                                            
14                      (B)  three percent of the gross value at the point of production                                   
15            when the average price per barrel for Alaska North Slope crude oil for sale on                               
16            the United States West Coast during the calendar year for which the tax is due                               
17            is over $20 but not over $25;                                                                                
18                      (C)  two percent of the gross value at the point of production                                     
19            when the average price per barrel for Alaska North Slope crude oil for sale on                               
20            the United States West Coast during the calendar year for which the tax is due                               
21            is over $17.50 but not over $20;                                                                             
22                      (D)  one percent of the gross value at the point of production                                     
23            when the average price per barrel for Alaska North Slope crude oil for sale on                               
24            the United States West Coast during the calendar year for which the tax is due                               
25            is over $15 but not over $17.50; or                                                                          
26                      (E)  zero percent of the gross value at the point of production                                    
27            when the average price per barrel for Alaska North Slope crude oil for sale on                               
28            the United States West Coast during the calendar year for which the tax is due                               
29            is $15 or less; [AND]                                                                                        
30                 (2)  oil and gas produced on and after January 1, 2017, and before                              
31       January 1, 2022, from leases or properties that include land north of 68 degrees North                            
01       latitude, other than gas subject to (o) of this section, may not be less than [(A)]  four                     
02       percent of the gross value at the point of production, except that a credit authorized                        
03       under this chapter may reduce the tax under this subsection to less than four                                 
04       percent, but not to less than two percent of the gross value at the point of                                  
05       production;                                                                                                   
06                 (3)  oil produced on and after January 1, 2022, from leases or                                      
07       properties that include land north of 68 degrees North latitude may not be less                               
08       than four percent of the gross value at the point of production, except that a                                
09       credit authorized under this chapter may reduce the tax under this subsection to                              
10       less than four percent, but not to less than two percent of the gross value at the                            
11       point of production [WHEN THE AVERAGE PRICE PER BARREL FOR                                                    
12       ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED STATES                                                        
13       WEST COAST DURING THE CALENDAR YEAR FOR WHICH THE TAX IS                                                          
14       DUE IS MORE THAN $25;                                                                                             
15                      (B)  THREE PERCENT OF THE GROSS VALUE AT THE                                                       
16            POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                        
17            FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                      
18            STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                         
19            THE TAX IS DUE IS OVER $20 BUT NOT OVER $25;                                                                 
20                      (C)  TWO PERCENT OF THE GROSS VALUE AT THE                                                         
21            POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                        
22            FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                      
23            STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                         
24            THE TAX IS DUE IS OVER $17.50 BUT NOT OVER $20;                                                              
25                      (D)  ONE PERCENT OF THE GROSS VALUE AT THE                                                         
26            POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                        
27            FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                      
28            STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                         
29            THE TAX IS DUE IS OVER $15 BUT NOT OVER $17.50; OR                                                           
30                      (E)  ZERO PERCENT OF THE GROSS VALUE AT THE                                                        
31            POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                        
01            FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                      
02            STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                         
03            THE TAX IS DUE IS $15 OR LESS].                                                                              
04    * Sec. 11. AS 43.55.011(m) is amended to read:                                                                     
05            (m)  Notwithstanding any contrary provision of [AS 38.05.180(i),                                             
06       AS 41.09.010,] AS 43.55.024 [,] or 43.55.025, the department shall provide by                                     
07       regulation a method to ensure that, for a calendar year for which a producer's tax                                
08       liability is limited by (j), (k), or (o) of this section, tax credits based on a lease                            
09       expenditure incurred before January 1, 2011, that are otherwise available under                                   
10       [AS 38.05.180(i), AS 41.09.010,] AS 43.55.024 [,] or 43.55.025 and allocated to gas                               
11       subject to the limitations in (j), (k), and (o) of this section are accounted for as though                       
12       the credits had been applied first against a tax liability calculated without regard to the                       
13       limitations under (j), (k), and (o) of this section so as to reduce the tax liability to the                      
14       maximum amount provided for under (j) or (o) of this section for the production of gas                            
15       or (k) of this section for the production of oil. The regulation must provide for a                               
16       reasonable method to allocate tax credits to gas subject to (j) and (o) of this section.                          
17       Only the amount of a tax credit remaining after the accounting provided for under this                            
18       subsection may be used for a later calendar year, transferred to another person, or                               
19       applied against a tax levied on the production of oil or gas not subject to (j), (k), or (o)                      
20       of this section to the extent otherwise allowed.                                                                  
21    * Sec. 12. AS 43.55.019(e) is amended to read:                                                                     
22            (e)  The credit under this section may not reduce a person's tax liability for the                       
23       calendar year under AS 43.55.011(e) to below the amount calculated under                                  
24       AS 43.55.011(f) [ZERO FOR ANY TAX YEAR]. An unused credit or portion of a                                     
25       credit not used under this section for a tax year may not be sold, traded, transferred, or                        
26       applied in a subsequent tax year.                                                                                 
27    * Sec. 13. AS 43.55.020(a) is amended to read:                                                                     
28            (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                             
29       the tax as follows:                                                                                               
30                 (1)  for oil and gas produced before January 1, 2014, an installment                                    
31       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
01       as allowed by law, is due for each month of the calendar year on the last day of the                              
02       following month; except as otherwise provided under (2) of this subsection, the                                   
03       amount of the installment payment is the sum of the following amounts, less 1/12 of                               
04       the tax credits that are allowed by law to be applied against the tax levied by                                   
05       AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                              
06       not be less than zero:                                                                                            
07                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
08            produced from leases or properties in the state outside the Cook Inlet                                       
09            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
10            the greater of                                                                                               
11                           (i)  zero; or                                                                                 
12                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
13                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
14                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
15                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
16                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
17                 at the point of production of the oil and gas produced from the leases or                               
18                 properties during the month for which the installment payment is                                        
19                 calculated;                                                                                             
20                      (B)  for oil and gas produced from leases or properties subject                                    
21            to AS 43.55.011(f), the greatest of                                                                          
22                           (i)  zero;                                                                                    
23                           (ii)  zero percent, one percent, two percent, three                                           
24                 percent, or four percent, as applicable, of the gross value at the point of                             
25                 production of the oil and gas produced from the leases or properties                                    
26                 during the month for which the installment payment is calculated; or                                    
27                           (iii)  the sum of 25 percent and the tax rate calculated for                                  
28                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
29                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
30                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
31                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
01                 at the point of production of the oil and gas produced from those leases                                
02                 or properties during the month for which the installment payment is                                     
03                 calculated;                                                                                             
04                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
05            each lease or property, the greater of                                                                       
06                           (i)  zero; or                                                                                 
07                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
08                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
09                 by 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 under AS 43.55.160 for the oil or gas, respectively,                                         
12                 produced from the lease or property from the gross value at the point of                                
13                 production of the oil or gas, respectively, produced from the lease or                                  
14                 property during the month for which the installment payment is                                          
15                 calculated;                                                                                             
16                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
17                           (i)  the sum of 25 percent and the tax rate calculated for                                    
18                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
19                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
20                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
21                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
22                 at the point of production of the oil and gas produced from the leases or                               
23                 properties during the month for which the installment payment is                                        
24                 calculated, but not less than zero; or                                                                  
25                           (ii)  four percent of the gross value at the point of                                         
26                 production of the oil and gas produced from the leases or properties                                    
27                 during the month, but not less than zero;                                                               
28                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
29       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
30       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
31       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
01       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
02       amount of taxable gas produced during the month for the amount of taxable gas                                     
03       produced during the calendar year and substituting in as 43.55.011(k)(1)(A) or (2)(A),                            
04       as applicable, the amount of taxable oil produced during the month for the amount of                              
05       taxable oil produced during the calendar year;                                                                    
06                 (3)  an installment payment of the estimated tax levied by                                              
07       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
08       on the last day of the following month; the amount of the installment payment is the                              
09       sum of                                                                                                            
10                      (A)  the applicable tax rate for oil provided under                                                
11            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
12            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
13            during the month; and                                                                                        
14                      (B)  the applicable tax rate for gas provided under                                                
15            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
16            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
17            during the month;                                                                                            
18                 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                       
19       applied as allowed by law, that exceeds the total of the amounts due as installment                               
20       payments of estimated tax is due on March 31 of the year following the calendar year                              
21       of production;                                                                                                    
22                 (5)  for oil and gas produced on and after January 1, 2014, and before                                  
23       January 1, 2022, an installment payment of the estimated tax levied by                                            
24       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
25       month of the calendar year on the last day of the following month; except as otherwise                            
26       provided under (6) and (10) of this subsection, the amount of the installment payment                         
27       is the sum of the following amounts, less 1/12 of the tax credits that are allowed by                             
28       law to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but                            
29       the amount of the installment payment may not be less than zero:                                                  
30                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
31            produced from leases or properties in the state outside the Cook Inlet                                       
01            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
02            the greater of                                                                                               
03                           (i)  zero; or                                                                                 
04                           (ii)  35 percent multiplied by the remainder obtained by                                      
05                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
06                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
07                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
08                 at the point of production of the oil and gas produced from the leases or                               
09                 properties during the month for which the installment payment is                                        
10                 calculated;                                                                                             
11                      (B)  for oil and gas produced from leases or properties subject                                    
12            to AS 43.55.011(f), the greatest of                                                                          
13                           (i)  zero;                                                                                    
14                           (ii)  zero percent, one percent, two percent, three                                           
15                 percent, or four percent, as applicable, of the gross value at the point of                             
16                 production of the oil and gas produced from the leases or properties                                    
17                 during the month for which the installment payment is calculated; or                                    
18                           (iii)  35 percent multiplied by the remainder obtained by                                     
19                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
20                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
21                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
22                 at the point of production of the oil and gas produced from those leases                                
23                 or properties during the month for which the installment payment is                                     
24                 calculated, except that, for the purposes of this calculation, a reduction                              
25                 from the gross value at the point of production may apply for oil and                                   
26                 gas subject to AS 43.55.160(f) or (g);                                                                  
27                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
28            each lease or property, the greater of                                                                       
29                           (i)  zero; or                                                                                 
30                           (ii)  35 percent multiplied by the remainder obtained by                                      
31                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
01                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
02                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
03                 produced from the lease or property from the gross value at the point of                                
04                 production of the oil or gas, respectively, produced from the lease or                                  
05                 property during the month for which the installment payment is                                          
06                 calculated;                                                                                             
07                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
08                           (i)  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 and gas under AS 43.55.160 from the gross value                                  
12                 at the point of production of the oil and gas produced from the leases or                               
13                 properties during the month for which the installment payment is                                        
14                 calculated, but not less than zero; or                                                                  
15                           (ii)  four percent of the gross value at the point of                                         
16                 production of the oil and gas produced from the leases or properties                                    
17                 during the month, but not less than zero;                                                               
18                 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                
19       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
20       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
21       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
22       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
23       amount of taxable gas produced during the month for the amount of taxable gas                                     
24       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
25       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
26       amount of taxable oil produced during the calendar year;                                                          
27                 (7)  for oil and gas produced on or after January 1, 2022, an installment                               
28       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
29       as allowed by law, is due for each month of the calendar year on the last day of the                              
30       following month; except as provided in (10) of this subsection, the amount of the                             
31       installment payment is the sum of the following amounts, less 1/12 of the tax credits                             
01       that are allowed by law to be applied against the tax levied by AS 43.55.011(e) for the                           
02       calendar year, but the amount of the installment payment may not be less than zero:                               
03                      (A)  for oil produced from leases or properties that include land                                  
04            north of 68 degrees North latitude, the greatest of                                                          
05                           (i)  zero;                                                                                    
06                           (ii)  zero percent, one percent, two percent, three                                           
07                 percent, or four percent, as applicable, of the gross value at the point of                             
08                 production of the oil produced from the leases or properties during the                                 
09                 month for which the installment payment is calculated; or                                               
10                           (iii)  35 percent multiplied by the remainder obtained by                                     
11                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
12                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
13                 deductible for the oil under AS 43.55.160(h)(1) from the gross value at                                 
14                 the point of production of the oil produced from those leases or                                        
15                 properties during the month for which the installment payment is                                        
16                 calculated, except that, for the purposes of this calculation, a reduction                              
17                 from the gross value at the point of production may apply for oil                                       
18                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
19                      (B)  for oil produced before or during the last calendar year                                      
20            under AS 43.55.024(b) for which the producer could take a tax credit under                                   
21            AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                               
22            sedimentary basin, no part of which is north of 68 degrees North latitude, other                             
23            than leases or properties subject to AS 43.55.011(p), the greater of                                         
24                           (i)  zero; or                                                                                 
25                           (ii)  35 percent multiplied by the remainder obtained by                                      
26                 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 under AS 43.55.160(h)(2) from the gross value at                                 
29                 the point of production of the oil produced from the leases or properties                               
30                 during the month for which the installment payment is calculated;                                       
31                      (C)  for oil and gas produced from leases or properties subject                                    
01            to AS 43.55.011(p), except as otherwise provided under (8) of this subsection,                               
02            the sum of                                                                                                   
03                           (i)  35 percent multiplied by the remainder obtained by                                       
04                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
05                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
06                 deductible for the oil under AS 43.55.160(h)(3) from the gross value at                                 
07                 the point of production of the oil produced from the leases or properties                               
08                 during the month for which the installment payment is calculated, but                                   
09                 not less than zero; and                                                                                 
10                           (ii)  13 percent of the gross value at the point of                                           
11                 production of the gas produced from the leases or properties during the                                 
12                 month, but not less than zero;                                                                          
13                      (D)  for oil produced from leases or properties in the state, no                                   
14            part of which is north of 68 degrees North latitude, other than leases or                                    
15            properties subject to (B) or (C) of this paragraph, the greater of                                           
16                           (i)  zero; or                                                                                 
17                           (ii)  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)(4) 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;                                       
23                      (E)  for gas produced from each lease or property in the state,                                    
24            other than a lease or property subject to AS 43.55.011(p), 13 percent of the                                 
25            gross value at the point of production of the gas produced from the lease or                                 
26            property during the month for which the installment payment is calculated, but                               
27            not less than zero;                                                                                          
28                 (8)  an amount calculated under (7)(C) of this subsection may not                                       
29       exceed four percent of the gross value at the point of production of the oil and gas                              
30       produced from leases or properties subject to AS 43.55.011(p) during the month for                                
31       which the installment payment is calculated;                                                                      
01                 (9)  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and                                  
02       (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point                          
03       of production is determined under AS 43.55.011(f) [AS 43.55.011(f)(1) OR (2)] but                             
04       substituting the phrase "month for which the installment payment is calculated" in                                
05       [AS 43.55.011(f)(1) AND (2)] for the phrase "calendar year for which the tax is due";                         
06                 (10)  after December 31, 2016, for the purposes of a calculation                                    
07       under (5)(B)(ii) or (7)(A)(ii) of this subsection, a credit under this chapter may                            
08       not be applied to reduce an installment payment to less than the applicable                                   
09       percentage under AS 43.55.011(f). ["]                                                                       
10    * Sec. 14. AS 43.55.023(a) is amended to read:                                                                     
11            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
12       expenditure as follows:                                                                                           
13                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
14       deductible lease expenditure for purposes of calculating the production tax value of oil                          
15       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
16       [AS 38.05.180(i), AS 41.09.010,] AS 43.20.043 [,] or AS 43.55.025, a producer or                                  
17       explorer that incurs a qualified capital expenditure may also elect to apply a tax credit                         
18       against a tax levied by AS 43.55.011(e) in the amount of 10 [20] percent of that                              
19       expenditure;                                                                                                      
20                 (2)  a producer or explorer may take a credit for a qualified capital                                   
21       expenditure incurred in connection with geological or geophysical exploration or in                               
22       connection with an exploration well only if the producer or explorer                                              
23                      (A)  agrees, in writing, to the applicable provisions of                                           
24            AS 43.55.025(f)(2); and                                                                                      
25                      (B)  submits to the Department of Natural Resources all data                                       
26            that would be required to be submitted under AS 43.55.025(f)(2);                                             
27                 (3)  a credit for a qualified capital expenditure incurred to explore for,                              
28       develop, or produce oil or gas deposits located north of 68 degrees North latitude may                            
29       be taken only if the expenditure is incurred before January 1, 2014.                                              
30    * Sec. 15. AS 43.55.023(b) is amended to read:                                                                     
31            (b)  Before January 1, 2014, a producer or explorer may elect to take a tax                                  
01       credit in the amount of 25 percent of a carried-forward annual loss. For lease                                    
02       expenditures incurred on and after January 1, 2014, and before January 1, 2016, to                                
03       explore for, develop, or produce oil or gas deposits located north of 68 degrees North                            
04       latitude, a producer or explorer may elect to take a tax credit in the amount of 45                               
05       percent of a carried-forward annual loss. For lease expenditures incurred on and after                            
06       January 1, 2016, to explore for, develop, or produce oil or gas deposits located north                            
07       of 68 degrees North latitude, a producer or explorer may elect to take a tax credit in                            
08       the amount of 35 percent of a carried-forward annual loss. For lease expenditures                                 
09       incurred on or after January 1, 2014, and before January 1, 2017, to explore for,                             
10       develop, or produce oil or gas deposits located south of 68 degrees North latitude, a                             
11       producer or explorer may elect to take a tax credit in the amount of 25 percent of a                              
12       carried-forward annual loss. For lease expenditures incurred after December 31,                               
13       2016, to explore for, develop, or produce oil or gas deposits located south of 68                             
14       degrees North latitude and outside of the Cook Inlet sedimentary basin, a                                     
15       producer or explorer may elect to take a tax credit in the amount of 25 percent of                            
16       a carried-forward annual loss. For lease expenditures incurred after                                          
17       December 31, 2016, to explore for, develop, or produce oil or gas deposits located                            
18       in the Cook Inlet sedimentary basin, a producer or explorer may elect to take a                               
19       credit in the amount of 10 percent of a carried-forward annual loss. A credit under                           
20       this subsection may be applied against a tax levied by AS 43.55.011(e). For purposes                              
21       of this subsection,                                                                                               
22                 (1)  a carried-forward annual loss is the amount of a producer's or                                 
23       explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                     
24       previous calendar year that was not deductible in calculating production tax values for                           
25       that calendar year under AS 43.55.160;                                                                        
26                 (2)  for lease expenditures incurred on or after January 1, 2017,                                   
27       any reduction under AS 43.55.160(f) or (g) is added back to the calculation of                                
28       production tax values for that calendar year under AS 43.55.160 for the                                       
29       determination of a carried-forward annual loss.                                                             
30    * Sec. 16. AS 43.55.023(c) is amended to read:                                                                     
31            (c)  A credit or portion of a credit under this section may not be used to reduce                            
01       a person's tax liability under AS 43.55.011(e) for any calendar year below the amount                         
02       calculated under AS 43.55.011(f) [ZERO], and any unused credit or portion of a                                
03       credit not used under this subsection may be applied in a later calendar year.                                    
04    * Sec. 17. AS 43.55.023(d) is amended to read:                                                                     
05            (d)  A person that is entitled to take a tax credit under this section that wishes                           
06       to transfer the unused credit to another person or obtain a cash payment under                                    
07       AS 43.55.028 may apply to the department for a transferable tax credit certificate. An                            
08       application under this subsection must be in a form prescribed by the department and                              
09       must include supporting information and documentation that the department                                         
10       reasonably requires. The department shall grant or deny an application, or grant an                               
11       application as to a lesser amount than that claimed and deny it as to the excess, not                             
12       later than 120 days after the latest of (1) March 31 of the year following the calendar                           
13       year in which the [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward                                              
14       annual loss for which the credit is claimed was incurred; (2) the date the statement                              
15       required under AS 43.55.030(a) or (e) was filed for the calendar year in which the                                
16       [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward annual loss for which                                          
17       the credit is claimed was incurred; or (3) the date the application was received by the                           
18       department. If, based on the information then available to it, the department is                                  
19       reasonably satisfied that the applicant is entitled to a credit, the department shall issue                       
20       the applicant a transferable tax credit certificate for the amount of the credit. A                               
21       certificate issued under this subsection does not expire.                                                         
22    * Sec. 18. AS 43.55.023(e) is amended to read:                                                                     
23            (e)  A person to which a transferable tax credit certificate is issued under (d) of                          
24       this section may transfer the certificate to another person, and a transferee may further                         
25       transfer the certificate. Subject to the limitations set out in former (a) of this section                    
26       and (b) - (d) [(a) - (d)] of this section, and notwithstanding any action the department                      
27       may take with respect to the applicant under (g) of this section, the owner of a                                  
28       certificate may apply the credit or a portion of the credit shown on the certificate only                         
29       against a tax levied by AS 43.55.011(e). However, a credit shown on a transferable tax                            
30       credit certificate may not be applied to reduce a transferee's total tax liability under                          
31       AS 43.55.011(e) for oil and gas produced during a calendar year to less than 80                                   
01       percent of the tax that would otherwise be due without applying that credit. Any                                  
02       portion of a credit not used under this subsection may be applied in a later period.                              
03    * Sec. 19. AS 43.55.023(l) is amended to read:                                                                     
04            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
05       expenditure incurred in the state [SOUTH OF 68 DEGREES NORTH LATITUDE]                                            
06       after June 30, 2010, as follows:                                                                                  
07                 (1)  notwithstanding that a well lease expenditure incurred in the state                                
08       [SOUTH OF 68 DEGREES NORTH LATITUDE] may be a deductible lease                                                    
09       expenditure for purposes of calculating the production tax value of oil and gas under                             
10       AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this section,                         
11       [AS 38.05.180(i), AS 41.09.010,] AS 43.20.043, or AS 43.55.025, a producer or                                     
12       explorer that incurs a well lease expenditure in the state [SOUTH OF 68 DEGREES                                   
13       NORTH LATITUDE] may elect to apply a tax credit against a tax levied by                                           
14       AS 43.55.011(e) in the amount of                                                                                  
15                      (A)  40 percent of that expenditure incurred south of 68                                 
16            degrees North latitude before January 1, 2017;                                                           
17                      (B)  30 percent of that expenditure incurred south of 68                                       
18            degrees North latitude after December 31, 2016, and before January 1,                                    
19            2018;                                                                                                    
20                      (C)  20 percent of that expenditure incurred inside the Cook                                   
21            Inlet sedimentary basin after December 31, 2017;                                                         
22                      (D)  30 percent of that expenditure incurred outside the                                       
23            Cook Inlet sedimentary basin and south of 68 degrees North latitude after                                
24            December 31, 2017, and before January 1, 2019 [; A TAX CREDIT                                            
25            UNDER THIS PARAGRAPH MAY BE APPLIED FOR A SINGLE                                                             
26            CALENDAR YEAR];                                                                                              
27                 (2)  a producer or explorer may take a credit for a well lease                                          
28       expenditure incurred in the state south of 68 degrees North latitude in connection with                           
29       geological or geophysical exploration or in connection with an exploration well only if                           
30       the producer or explorer                                                                                          
31                      (A)  agrees, in writing, to the applicable provisions of                                           
01            AS 43.55.025(f)(2); and                                                                                      
02                      (B)  submits to the Department of Natural Resources all data                                       
03            that would be required to be submitted under AS 43.55.025(f)(2).                                             
04    * Sec. 20. AS 43.55.024(f) is amended to read:                                                                     
05            (f)  A tax credit authorized by (a) of this section may not be applied to reduce a                           
06       producer's tax liability for any calendar year under AS 43.55.011(e) on oil and gas                               
07       produced from leases or properties outside the Cook Inlet sedimentary basin, no part                              
08       of which is north of 68 degrees North latitude, below the amount calculated under                             
09       AS 43.55.011(f) [ZERO].                                                                                       
10    * Sec. 21. AS 43.55.024(g) is amended to read:                                                                     
11            (g)  A tax credit authorized by (c) of this section may not be applied to reduce                             
12       a producer's tax liability for any calendar year under AS 43.55.011(e) below the                              
13       amount calculated under AS 43.55.011(f) [ZERO].                                                               
14    * Sec. 22. AS 43.55.024(i) is amended to read:                                                                     
15            (i)  A producer may apply against the producer's tax liability for the calendar                              
16       year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under                                
17       AS 43.55.011(e) that meets one or more of the criteria in AS 43.55.160(f) or (g) and                              
18       that is produced during a calendar year after December 31, 2013. A tax credit                                     
19       authorized by this subsection may not reduce a producer's tax liability for a calendar                            
20       year under AS 43.55.011(e) below the amount calculated under AS 43.55.011(f)                                  
21       [ZERO].                                                                                                           
22    * Sec. 23. AS 43.55.024(j) is amended to read:                                                                     
23            (j)  A producer may apply against the producer's tax liability for the calendar                              
24       year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for                            
25       each barrel of oil taxable under AS 43.55.011(e) that does not meet any of the criteria                           
26       in AS 43.55.160(f) or (g) and that is produced during a calendar year after                                       
27       December 31, 2013, from leases or properties north of 68 degrees North latitude.                                  
28       Notwithstanding AS 43.55.011(f)(2) and (3), a [A] tax credit under this subsection                            
29       may not reduce a producer's tax liability for a calendar year under AS 43.55.011(e)                               
30       below four percent of the gross value at the point of production for oil produced                             
31       on and after January 1, 2017 [THE AMOUNT CALCULATED UNDER                                                     
01       AS 43.55.011(f)]. The amount of the tax credit for a barrel of taxable oil subject to this                        
02       subsection produced during a month of the calendar year is                                                        
03                 (1)  $8 for each barrel of taxable oil if the average gross value at the                                
04       point of production for the month is less than $80 a barrel;                                                      
05                 (2)  $7 for each barrel of taxable oil if the average gross value at the                                
06       point of production for the month is greater than or equal to $80 a barrel, but less than                         
07       $90 a barrel;                                                                                                     
08                 (3)  $6 for each barrel of taxable oil if the average gross value at the                                
09       point of production for the month is greater than or equal to $90 a barrel, but less than                         
10       $100 a barrel;                                                                                                    
11                 (4)  $5 for each barrel of taxable oil if the average gross value at the                                
12       point of production for the month is greater than or equal to $100 a barrel, but less                             
13       than $110 a barrel;                                                                                               
14                 (5)  $4 for each barrel of taxable oil if the average gross value at the                                
15       point of production for the month is greater than or equal to $110 a barrel, but less                             
16       than $120 a barrel;                                                                                               
17                 (6)  $3 for each barrel of taxable oil if the average gross value at the                                
18       point of production for the month is greater than or equal to $120 a barrel, but less                             
19       than $130 a barrel;                                                                                               
20                 (7)  $2 for each barrel of taxable oil if the average gross value at the                                
21       point of production for the month is greater than or equal to $130 a barrel, but less                             
22       than $140 a barrel;                                                                                               
23                 (8)  $1 for each barrel of taxable oil if the average gross value at the                                
24       point of production for the month is greater than or equal to $140 a barrel, but less                             
25       than $150 a barrel;                                                                                               
26                 (9)  zero if the average gross value at the point of production for the                                 
27       month is greater than or equal to $150 a barrel.                                                                  
28    * Sec. 24. AS 43.55.025(m) is amended to read:                                                                     
29            (m)  The persons that drill the first four exploration wells in the state and                                
30       within the areas described in (o) of this section on state lands, private lands, or federal                       
31       onshore lands for the purpose of discovering oil or gas that penetrate and evaluate a                             
01       prospect in a basin described in (o) of this section are eligible for a credit under (a)(6)                       
02       of this section. A credit under this subsection may not be taken for more than two                                
03       exploration wells in a single area described in (o)(1) - (6) of this section. Exploration                         
04       expenditures eligible for the credit in this subsection must be incurred for work                                 
05       performed after June 1, 2012, and before July 1, 2016, except that expenditures to                            
06       complete an exploration well that was spudded but not completed before July 1,                                
07       2016, are eligible for the credit under this subsection. A person planning to drill an                        
08       exploration well on private land and to apply for a credit under this subsection shall                            
09       obtain written consent from the owner of the oil and gas interest for the full public                             
10       release of all well data after the expiration of the confidentiality period applicable to                         
11       information collected under (f) of this section. The written consent of the owner of the                          
12       oil and gas interest must be submitted to the commissioner of natural resources before                            
13       approval of the proposed exploration well. In addition to the requirements in (c)(1),                             
14       (c)(2)(A), and (c)(2)(C) of this section and submission of the written consent of the                             
15       owner of the oil and gas interest, a person planning to drill an exploration well shall                           
16       obtain approval from the commissioner of natural resources before the well is                                     
17       spudded. The commissioner of natural resources shall make a written determination                                 
18       approving or rejecting an exploration well within 60 days after receiving the request                             
19       for approval or as soon as is practicable thereafter. Before approving the exploration                            
20       well, the commissioner of natural resources shall consider the following: the location                            
21       of the well; the proximity to a community in need of a local energy source; the                                   
22       proximity of existing infrastructure; the experience and safety record of the explorer in                         
23       conducting operations in remote or roadless areas; the projected cost schedule;                                   
24       whether seismic mapping and seismic data sufficiently identify a particular trap for                              
25       exploration; whether the targeted and planned depth and range are designed to                                     
26       penetrate and fully evaluate the hydrocarbon potential of the proposed prospect and                               
27       reach the level below which economic hydrocarbon reservoirs are likely to be found,                               
28       or reach 12,000 feet or more true vertical depth; and whether the exploration plan                                
29       provides for a full evaluation of the wellbore below surface casing to the depth of the                           
30       well. Whether the exploration well for which a credit is requested under this                                     
31       subsection is located within an area and a basin described under (o) of this section                              
01       shall be determined by the commissioner of natural resources and reported to the                                  
02       commissioner. A taxpayer that obtains a credit under this subsection may not claim a                              
03       tax credit under AS 43.55.023 or another provision in this section for the same                                   
04       exploration expenditure.                                                                                          
05    * Sec. 25. AS 43.55.025 is amended by adding a new subsection to read:                                             
06            (q)  A credit or portion of a credit under this section may not be used to reduce                            
07       a person's tax liability under AS 43.55.011(e) for any calendar year below the amount                             
08       calculated under AS 43.55.011(f).                                                                                 
09    * Sec. 26. AS 43.55.028(e) is amended to read:                                                                     
10            (e)  The department, on the written application of a person to whom a                                        
11       transferable tax credit certificate has been issued under AS 43.55.023(d) or former                               
12       AS 43.55.023(m) or to whom a production tax credit certificate has been issued under                              
13       AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                                    
14       purchase, in whole or in part, the certificate. The department may not purchase a                             
15       total of more than $100,000,000 in tax credit certificates from a person in a                                 
16       calendar year. Before purchasing a certificate or part of a certificate, [IF] the                             
17       department shall find [FINDS] that                                                                            
18                 (1)  the calendar year of the purchase is not earlier than the first                                    
19       calendar year for which the credit shown on the certificate would otherwise be allowed                            
20       to be applied against a tax;                                                                                      
21                 (2)  the application is not the result of the division of a single entity                           
22       into multiple entities that would reasonably be expected to apply as a single entity                          
23       if the $100,000,000 limitation in this subsection did not exist [APPLICANT DOES                               
24       NOT HAVE AN OUTSTANDING LIABILITY TO THE STATE FOR UNPAID                                                         
25       DELINQUENT TAXES UNDER THIS TITLE];                                                                               
26                 (3)  the applicant's total tax liability under AS 43.55.011(e), after                                   
27       application of all available tax credits, for the calendar year in which the application is                       
28       made is zero;                                                                                                     
29                 (4)  the applicant's average daily production of oil and gas taxable                                    
30       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
31       the application is made was not more than 50,000 BTU equivalent barrels; and                                      
01                 (5)  the purchase is consistent with this section and regulations adopted                               
02       under this section.                                                                                               
03    * Sec. 27. AS 43.55.028 is amended by adding a new subsection to read:                                             
04            (j)  If an applicant or claimant has an outstanding liability to the state directly                          
05       related to the applicant's or claimant's oil or gas exploration, development, or                                  
06       production and the department has not previously reduced the amount paid to that                                  
07       applicant or claimant for a certificate or refund because of that outstanding liability,                          
08       the department may purchase only that portion of a certificate or pay only that portion                           
09       of a refund that exceeds the outstanding liability. With the applicant's or claimant's                            
10       consent, the department may apply the amount by which the department reduced its                                  
11       purchase of a certificate or payment for a refund because of an outstanding liability to                          
12       satisfy the outstanding liability. Satisfaction of an outstanding liability under this                            
13       subsection does not affect the applicant's ability to contest that liability. The                                 
14       department may enter into contracts or agreements with another department to which                                
15       the outstanding liability is owed. In this subsection, "outstanding liability" means an                           
16       amount of tax, interest, penalty, fee, rental, royalty, or other charge for which the state                       
17       has issued a demand for payment that has not been paid when due and, if contested,                                
18       has not been finally resolved against the state.                                                                  
19    * Sec. 28. AS 43.55.029(a) is amended to read:                                                                     
20            (a)  An explorer or producer that has applied for a production tax credit under                              
21       former AS 43.55.023(a) [, (b),] or (l) or under AS 43.55.023(b) or 43.55.025(a) may                       
22       make a present assignment of the production tax credit certificate expected to be                                 
23       issued by the department to a third-party assignee. The assignment may be made either                             
24       at the time the application is filed with the department or not later than 30 days after                          
25       the date of filing with the department. Once a notice of assignment in compliance with                            
26       this section is filed with the department, the assignment is irrevocable and cannot be                            
27       modified by the explorer or producer without the written consent of the assignee                                  
28       named in the assignment. If a production tax credit certificate is issued to the explorer                         
29       or producer, the notice of assignment remains effective and shall be filed with the                               
30       department by the explorer or producer together with any application for the                                      
31       department to purchase the certificate under AS 43.55.028(e).                                                     
01    * Sec. 29. AS 43.55.030(a) is amended to read:                                                                     
02            (a)  A producer that produces oil or gas from a lease or property in the state                               
03       during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                               
04       for that oil or gas, shall file with the department on March 31 of the following year a                           
05       statement, under oath, in a form prescribed by the department, giving, with other                                 
06       information required, the following:                                                                              
07                 (1)  a description of each lease or property from which oil or gas was                                  
08       produced, by name, legal description, lease number, or accounting codes assigned by                               
09       the department;                                                                                                   
10                 (2)  the names of the producer and, if different, the person paying the                                 
11       tax, if any;                                                                                                      
12                 (3)  the gross amount of oil and the gross amount of gas produced from                                  
13       each lease or property, separately identifying the gross amount of gas produced from                              
14       each oil and gas lease to which an effective election under AS 43.55.014(a) applies,                              
15       the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of                             
16       the gross amount of oil and gas owned by the producer;                                                            
17                 (4)  the gross value at the point of production of the oil and of the gas                               
18       produced from each lease or property owned by the producer and the costs of                                       
19       transportation of the oil and gas;                                                                                
20                 (5)  the name of the first purchaser and the price received for the oil and                             
21       for the gas, unless relieved from this requirement in whole or in part by the                                     
22       department;                                                                                                       
23                 (6)  the producer's qualified capital expenditures, [AS DEFINED IN                                      
24       AS 43.55.023,] other lease expenditures under AS 43.55.165, and adjustments or other                              
25       payments or credits under AS 43.55.170;                                                                           
26                 (7)  the production tax values of the oil and gas under AS 43.55.160(a)                                 
27       or of the oil under AS 43.55.160(h), as applicable;                                                               
28                 (8)  any claims for tax credits to be applied; and                                                      
29                 (9)  calculations showing the amounts, if any, that were or are due                                     
30       under AS 43.55.020(a) and interest on any underpayment or overpayment.                                            
31    * Sec. 30. AS 43.55.030(e) is amended to read:                                                                     
01            (e)  An explorer or producer that incurs a lease expenditure under                                           
02       AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar                                 
03       year but does not produce oil or gas from a lease or property in the state during the                             
04       calendar year shall file with the department, on March 31 of the following year, a                                
05       statement, under oath, in a form prescribed by the department, giving, with other                                 
06       information required, the following:                                                                              
07                 (1)  the explorer's or producer's qualified capital expenditures, [AS                                   
08       DEFINED IN AS 43.55.023,] other lease expenditures under AS 43.55.165, and                                        
09       adjustments or other payments or credits under AS 43.55.170; and                                                  
10                 (2)  if the explorer or producer receives a payment or credit under                                     
11       AS 43.55.170, calculations showing whether the explorer or producer is liable for a                               
12       tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount.                                                 
13    * Sec. 31. AS 43.55.160(f) is amended to read:                                                                     
14            (f)  On and after January 1, 2014, in the calculation of an annual production tax                            
15       value of a producer under (a)(1)(A) or (h)(1) of this section, the gross value at the                             
16       point of production of oil or gas produced from a lease or property north of 68 degrees                           
17       North latitude meeting one or more of the following criteria is reduced by 20 percent:                            
18       (1) the oil or gas is produced from a lease or property that does not contain a lease that                        
19       was within a unit on January 1, 2003; (2) the oil or gas is produced from a                                       
20       participating area established after December 31, 2011, that is within a unit formed                              
21       under AS 38.05.180(p) before January 1, 2003, if the participating area does not                                  
22       contain a reservoir that had previously been in a participating area established before                           
23       December 31, 2011; (3) the oil or gas is produced from acreage that was added to an                               
24       existing participating area by the Department of Natural Resources on and after                                   
25       January 1, 2014, and the producer demonstrates to the department that the volume of                               
26       oil or gas produced is from acreage added to an existing participating area. This                                 
27       subsection does not apply to gas produced before 2022 that is used in the state or to                             
28       gas produced on and after January 1, 2022. For oil or gas first produced after                                
29       December 31, 2016, the reduction under this subsection shall apply to oil or gas                              
30       produced from a lease or property for the first five years after the                                          
31       commencement of production in commercial quantities of oil or gas from that                                   
01       lease or property. For oil or gas first produced before January 1, 2017, the                                  
02       reduction under this subsection for a lease or property shall expire January 1,                               
03       2021. A reduction under this subsection may not reduce the gross value at the point of                        
04       production below zero. In this subsection, "participating area" means a reservoir or                              
05       portion of a reservoir producing or contributing to production as approved by the                                 
06       Department of Natural Resources.                                                                                  
07    * Sec. 32. AS 43.55.160(g) is amended to read:                                                                     
08            (g)  On and after January 1, 2014, in addition to the reduction under (f) of this                            
09       section, in the calculation of an annual production tax value of a producer under                                 
10       (a)(1)(A) or (h)(1) of this section, the gross value at the point of production of oil or                         
11       gas produced from a lease or property north of 68 degrees North latitude that does not                            
12       contain a lease that was within a unit on January 1, 2003, is reduced by 10 percent if                            
13       the oil or gas is produced from a unit made up solely of leases that have a royalty                               
14       share of more than 12.5 percent in amount or value of the production removed or sold                              
15       from the lease as determined under AS 38.05.180(f). This subsection does not apply if                             
16       the royalty obligation for one or more of the leases in the unit has been reduced to 12.5                         
17       percent or less under AS 38.05.180(j) for all or part of the calendar year for which the                          
18       annual production tax value is calculated. This subsection does not apply to gas                                  
19       produced before 2022 that is used in the state or to gas produced on and after                                    
20       January 1, 2022. For oil or gas first produced after December 31, 2016, the                                   
21       reduction under this subsection shall apply to oil or gas produced from a lease or                            
22       property for the first five years after the commencement of production in                                     
23       commercial quantities of oil or gas from that lease or property. For oil or gas first                         
24       produced before January 1, 2017, the reduction under this subsection for a lease                              
25       or property shall expire January 1, 2021. A reduction under this subsection may not                           
26       reduce the gross value at the point of production below zero.                                                     
27    * Sec. 33. AS 43.55.165(a) is amended to read:                                                                     
28            (a)  For [EXCEPT AS PROVIDED IN (j) AND (k) OF THIS SECTION,                                             
29       FOR] purposes of this chapter, a producer's lease expenditures for a calendar year are                            
30                 (1)  costs, other than items listed in (e) of this section, that are                                    
31                      (A)  incurred by the producer during the calendar year after                                       
01            March 31, 2006, to explore for, develop, or produce oil or gas deposits located                              
02            within the producer's leases or properties in the state or, in the case of land in                           
03            which the producer does not own an operating right, operating interest, or                                   
04            working interest, to explore for oil or gas deposits within other land in the                                
05            state; and                                                                                                   
06                      (B)  allowed by the department by regulation, based on the                                         
07            department's determination that the costs satisfy the following three                                        
08            requirements:                                                                                                
09                           (i)  the costs must be incurred upstream of the point of                                      
10                 production of oil and gas;                                                                              
11                           (ii)  the costs must be ordinary and necessary costs of                                       
12                 exploring for, developing, or producing, as applicable, oil or gas                                      
13                 deposits; and                                                                                           
14                           (iii)  the costs must be direct costs of exploring for,                                       
15                 developing, or producing, as applicable, oil or gas deposits; and                                       
16                 (2)  a reasonable allowance for that calendar year, as determined under                                 
17       regulations adopted by the department, for overhead expenses that are directly related                            
18       to exploring for, developing, or producing, as applicable, the oil or gas deposits.                               
19    * Sec. 34. AS 43.55.165(e) is amended to read:                                                                     
20            (e)  For purposes of this section, lease expenditures do not include                                         
21                 (1)  depreciation, depletion, or amortization;                                                          
22                 (2)  oil or gas royalty payments, production payments, lease profit                                     
23       shares, or other payments or distributions of a share of oil or gas production, profit, or                        
24       revenue, except that a producer's lease expenditures applicable to oil and gas produced                           
25       from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net                             
26       profit paid to the state under that lease;                                                                        
27                 (3)  taxes based on or measured by net income;                                                          
28                 (4)  interest or other financing charges or costs of raising equity or debt                             
29       capital;                                                                                                          
30                 (5)  acquisition costs for a lease or property or exploration license;                                  
31                 (6)  costs arising from fraud, wilful misconduct, gross negligence,                                     
01       violation of law, or failure to comply with an obligation under a lease, permit, or                               
02       license issued by the state or federal government;                                                                
03                 (7)  fines or penalties imposed by law;                                                                 
04                 (8)  costs of arbitration, litigation, or other dispute resolution activities                           
05       that involve the state or concern the rights or obligations among owners of interests in,                         
06       or rights to production from, one or more leases or properties or a unit;                                         
07                 (9)  costs incurred in organizing a partnership, joint venture, or other                                
08       business entity or arrangement;                                                                                   
09                 (10)  amounts paid to indemnify the state; the exclusion provided by                                    
10       this paragraph does not apply to the costs of obtaining insurance or a surety bond from                           
11       a third-party insurer or surety;                                                                                  
12                 (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                
13                 (12)  an expenditure otherwise deductible under (b) of this section that                                
14       is a result of an internal transfer, a transaction with an affiliate, or a transaction                            
15       between related parties, or is otherwise not an arm's length transaction, unless the                              
16       producer establishes to the satisfaction of the department that the amount of the                                 
17       expenditure does not exceed the fair market value of the expenditure;                                             
18                 (13)  an expenditure incurred to purchase an interest in any corporation,                               
19       partnership, limited liability company, business trust, or any other business entity,                             
20       whether or not the transaction is treated as an asset sale for federal income tax                                 
21       purposes;                                                                                                         
22                 (14)  a tax levied under AS 43.55.011 or 43.55.014;                                                     
23                 (15)  costs incurred for dismantlement, removal, surrender, or                                          
24       abandonment of a facility, pipeline, well pad, platform, or other structure, or for the                           
25       restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in                       
26       conjunction with dismantlement, removal, surrender, or abandonment; a cost is not                                 
27       excluded under this paragraph if the dismantlement, removal, surrender, or                                        
28       abandonment for which the cost is incurred is undertaken for the purpose of replacing,                            
29       renovating, or improving the facility, pipeline, well pad, platform, or other structure;                          
30                 (16)  costs incurred for containment, control, cleanup, or removal in                                   
31       connection with any unpermitted release of oil or a hazardous substance and any                                   
01       liability for damages imposed on the producer or explorer for that unpermitted release;                           
02       this paragraph does not apply to the cost of developing and maintaining an oil                                    
03       discharge prevention and contingency plan under AS 46.04.030;                                                     
04                 (17)  costs incurred to satisfy a work commitment under an exploration                                  
05       license under AS 38.05.132;                                                                                       
06                 (18)  that portion of expenditures, that would otherwise be qualified                                   
07       capital expenditures, [AS DEFINED IN AS 43.55.023,] incurred during a calendar                                    
08       year that are less than the product of $0.30 multiplied by the total taxable production                           
09       from each lease or property, in BTU equivalent barrels, during that calendar year,                                
10       except that, when a portion of a calendar year is subject to this provision, the                                  
11       expenditures and volumes shall be prorated within that calendar year;                                             
12                 (19)  costs incurred for repair, replacement, or deferred maintenance of                                
13       a facility, a pipeline, a structure, or equipment, other than a well, that results in or is                       
14       undertaken in response to a failure, problem, or event that results in an unscheduled                             
15       interruption of, or reduction in the rate of, oil or gas production; or costs incurred for                        
16       repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or                           
17       equipment, other than a well, that is undertaken in response to, or is otherwise                                  
18       associated with, an unpermitted release of a hazardous substance or of gas; however,                              
19       costs under this paragraph that would otherwise constitute lease expenditures under (a)                           
20       and (b) of this section may be treated as lease expenditures if the department                                    
21       determines that the repair or replacement is solely necessitated by an act of war, by an                          
22       unanticipated grave natural disaster or other natural phenomenon of an exceptional,                               
23       inevitable, and irresistible character, the effects of which could not have been                                  
24       prevented or avoided by the exercise of due care or foresight, or by an intentional or                            
25       negligent act or omission of a third party, other than a party or its agents in privity of                        
26       contract with, or employed by, the producer or an operator acting for the producer, but                           
27       only if the producer or operator, as applicable, exercised due care in operating and                              
28       maintaining the facility, pipeline, structure, or equipment, and took reasonable                                  
29       precautions against the act or omission of the third party and against the consequences                           
30       of the act or omission; in this paragraph,                                                                        
31                      (A)  "costs incurred for repair, replacement, or deferred                                          
01            maintenance of a facility, a pipeline, a structure, or equipment" includes costs                             
02            to dismantle and remove the facility, pipeline, structure, or equipment that is                              
03            being replaced;                                                                                              
04                      (B)  "hazardous substance" has the meaning given in                                                
05            AS 46.03.826;                                                                                                
06                      (C)  "replacement" includes renovation or improvement;                                             
07                 (20)  costs incurred to construct, acquire, or operate a refinery or crude                              
08       oil topping plant, regardless of whether the products of the refinery or topping plant                            
09       are used in oil or gas exploration, development, or production operations; however, if                            
10       a producer owns a refinery or crude oil topping plant that is located on or near the                              
11       premises of the producer's lease or property in the state and that processes the                                  
12       producer's oil produced from that lease or property into a product that the producer                              
13       uses in the operation of the lease or property in drilling for or producing oil or gas, the                       
14       producer's lease expenditures include the amount calculated by subtracting from the                               
15       fair market value of the product used the prevailing value, as determined under                                   
16       AS 43.55.020(f), of the oil that is processed;                                                                    
17                 (21)  costs of lobbying, public relations, public relations advertising, or                             
18       policy advocacy.                                                                                                  
19    * Sec. 35. AS 43.55.165(f) is amended to read:                                                                     
20            (f)  For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as                               
21       to expenditures incurred to explore for an oil or gas deposit located within land in                              
22       which an explorer does not own a working interest, the term "producer" in this section                            
23       includes "explorer."                                                                                              
24    * Sec. 36. AS 43.55.170(c) is amended to read:                                                                     
25            (c)  For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as                               
26       to expenditures incurred to explore for an oil or gas deposit located within land in                              
27       which an explorer does not own a working interest, the term "producer" in this section                            
28       includes "explorer."                                                                                              
29    * Sec. 37. AS 43.55.890 is amended to read:                                                                        
30            Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary                                
31       provision of AS 40.25.100, and regardless of whether the information is considered                                
01       under AS 43.05.230(e) to constitute statistics classified to prevent the identification of                        
02       particular returns or reports, the department may publish the following information                               
03       under this chapter, if aggregated among three or more producers or explorers, showing                             
04       by month or calendar year and by lease or property, unit, or area of the state:                                   
05                 (1)  the amount of oil or gas production;                                                               
06                 (2)  the amount of taxes levied under this chapter or paid under this                                   
07       chapter;                                                                                                          
08                 (3)  the effective tax rates under this chapter;                                                        
09                 (4)  the gross value of oil or gas at the point of production;                                          
10                 (5)  the transportation costs for oil or gas;                                                           
11                 (6)  qualified capital expenditures [, AS DEFINED IN AS 43.55.023];                                     
12                 (7)  exploration expenditures under AS 43.55.025;                                                       
13                 (8)  production tax values of oil or gas under AS 43.55.160;                                            
14                 (9)  lease expenditures under AS 43.55.165;                                                             
15                 (10)  adjustments to lease expenditures under AS 43.55.170;                                             
16                 (11)  tax credits applicable or potentially applicable against taxes levied                             
17       by this chapter.                                                                                                  
18    * Sec. 38. AS 43.55.895(b) is amended to read:                                                                     
19            (b)  A municipal entity subject to taxation because of this section                                          
20                 (1)  is eligible for [ALL] tax credits proportionate to its production                          
21       taxable under AS 43.55.011(e); and                                                                            
22                 (2)  shall allocate its lease expenditures in proportion to its                                     
23       production taxable under AS 43.55.011(e) [UNDER THIS CHAPTER TO THE                                           
24       SAME EXTENT AS ANY OTHER PRODUCER].                                                                               
25    * Sec. 39. AS 43.55.900 is amended by adding a new paragraph to read:                                              
26                 (26)  "qualified capital expenditure"                                                                   
27                      (A)  means, except as otherwise provided in (B) of this                                            
28            paragraph, an expenditure that is a lease expenditure under AS 43.55.165 and                                 
29            is                                                                                                           
30                           (i)  incurred for geological or geophysical exploration;                                      
31                           (ii)  treated as a capitalized expenditure under 26 U.S.C.                                    
01                 (Internal Revenue Code), as amended, regardless of elections made                                       
02                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
03                 treated as a capitalized expenditure for federal income tax reporting                                   
04                 purposes by the person incurring the expenditure; or                                                    
05                           (iii)  treated as a capitalized expenditure under 26 U.S.C.                                   
06                 (Internal Revenue Code), as amended, regardless of elections made                                       
07                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
08                 eligible to be deducted as an expense under 26 U.S.C. 263(c) (Internal                                  
09                 Revenue Code), as amended;                                                                              
10                      (B)  does not include an expenditure incurred to acquire an asset                                  
11            the cost of previously acquiring which was a lease expenditure under                                         
12            AS 43.55.165 or would have been a lease expenditure under AS 43.55.165 if it                                 
13            had been incurred after March 31, 2006, or that has previously been placed in                                
14            service in the state; an expenditure to acquire an asset is not excluded under                               
15            this subparagraph if not more than an immaterial portion of the asset meets a                                
16            description under this subparagraph; for purposes of this subparagraph, "asset"                              
17            includes geological, geophysical, and well data and interpretations.                                         
18    * Sec. 40. AS 43.70 is amended by adding new sections to read:                                                     
19            Sec. 43.70.025. Bond or cash deposit required for an oil or gas business. (a)                              
20       At the time of applying for a license under this chapter, an applicant engaged in the                             
21       business of oil or gas exploration, development, or production shall file a surety bond                           
22       in the amount of $250,000 running to the state, conditioned upon the applicant's                                  
23       promise to pay all                                                                                                
24                 (1)  taxes and contributions due the state and political subdivisions;                                  
25                 (2)  persons furnishing labor or material or renting or supplying                                       
26       equipment to the applicant; and                                                                                   
27                 (3)  amounts that may be adjudged against the applicant because of                                      
28       negligent or improper work or breach of contract while engaged in the business of oil                             
29       or gas exploration, development, or production.                                                                   
30            (b)  In lieu of the surety bond required under this section, the applicant may                               
31       file with the commissioner a cash deposit or other negotiable security acceptable to the                          
01       commissioner in the amount of $250,000.                                                                           
02            (c)  The bond required by this section remains in effect until cancelled by                                  
03       action of the surety, the principal, or if the commissioner finds that the business is                            
04       producing oil or gas in commercial quantities, by the commissioner.                                               
05            Sec. 43.70.028. Claims against an oil or gas business. (a) A person having a                               
06       claim against a person required to file a surety bond under AS 43.70.025 because of                               
07       the failure to pay a liability described in AS 43.70.025(a) may bring suit upon the                               
08       bond. A copy of the complaint shall be served by registered or certified mail on the                              
09       commissioner at the time suit is filed, and the commissioner shall maintain a record,                             
10       available for public inspection, of all suits commenced. This service on the                                      
11       commissioner shall constitute service on the surety, and the commissioner shall                                   
12       transmit the complaint or a copy of it to the surety within 72 hours after it is received.                        
13       The surety on the bond is not liable in an aggregate amount in excess of that named in                            
14       the bond, but if claims pending at any one time exceed the amount of the bond, the                                
15       claims shall be satisfied from the bond in the following order:                                                   
16                 (1)  labor, including employee benefits;                                                                
17                 (2)  taxes and contributions due the state, city, and borough, in that                                  
18       order;                                                                                                            
19                 (3)  material and equipment;                                                                            
20                 (4)  claims for negligent or improper work or breach of contract;                                       
21                 (5)  repair of public facilities.                                                                       
22            (b)  If a judgment is entered against a cash deposit, the commissioner, upon                                 
23       receipt of a certified copy of a final judgment, shall pay the judgment from the amount                           
24       of the deposit in accordance with the priorities set out in (a) of this section.                                  
25            (c)  An action described in (a) of this section may not be commenced on the                                  
26       bond more than three years after the bond's cancellation.                                                         
27    * Sec. 41. AS 38.05.180(i); AS 41.09.010, 41.09.020, 41.09.030, 41.09.090; and                                     
28 AS 43.20.053(j)(4) are repealed January 1, 2017.                                                                        
29    * Sec. 42. AS 43.55.023(a), 43.55.023(l), 43.55.023(n), 43.55.023(o), 43.55.028(i),                                
30 43.55.075(d)(1), 43.55.165(j), and 43.55.165(k) are repealed January 1, 2022.                                           
31    * Sec. 43. The uncodified law of the State of Alaska is amended by adding a new section to                         
01 read:                                                                                                                   
02       LEGISLATIVE WORKING GROUP. (a) A legislative working group is established                                         
03 to analyze the Cook Inlet fiscal regime for oil and gas, review the state's tax structure and                           
04 rates on oil and gas produced south of 68 degrees North latitude, recommend changes to the                              
05 legislature for consideration during the First Regular Session of the Thirtieth Alaska State                            
06 Legislature, and develop terms for a comprehensive fiscal regime for the area south of 68                               
07 degrees North latitude including,                                                                                       
08            (1)  a tax structure that accounts for the unique circumstances for each oil and                             
09 gas producing area south of 68 degrees North latitude;                                                                  
10            (2)  incentives for the exploration, development, and production of oil and gas                              
11 south of 68 degrees North latitude;                                                                                     
12            (3)  consideration of the competitiveness of the area to attract new oil and gas                             
13 development;                                                                                                            
14            (4)  consideration of the unique market considerations of the Cook Inlet                                     
15 sedimentary basin and the need to support energy supply security for communities in                                     
16 Southcentral Alaska;                                                                                                    
17            (5)  alternative means of state support for the exploration, development, and                                
18 production of oil and gas in this area, including through the Alaska Industrial Export and                              
19 Development Authority;                                                                                                  
20            (6)  analysis of whether refundable state tax credits are still necessary for a                              
21 new regime;                                                                                                             
22            (7)  evaluation of the need for disclosure of some confidential information to                               
23 help legislators shape policy, including an evaluation of the associated state and federal                              
24 constitutional issues related to statutory waivers of taxpayer confidentiality.                                         
25       (b)  The working group consists of                                                                                
26            (1)  two co-chairs, one of whom is a member of the house appointed by the                                    
27 speaker of the house of representatives, and one of whom is a member of the senate appointed                            
28 by the president of the senate; and                                                                                     
29            (2)  members appointed by the co-chairs; members must be legislators and                                     
30 must include members of the majority and minority caucuses.                                                             
31       (c)  The co-chairs of the working group may form an advisory group to the working                                 
01 group, composed of members who are not legislators and who have expertise and skills to                                 
02 assist in the review and development of a new plan for the tax structure and rates on oil and                           
03 gas produced south of 68 degrees North latitude. The members of an advisory group may                                   
04 include commissioners or employees of state departments, members of the oil and gas                                     
05 industry or trade associations, and economists.                                                                         
06       (d)  The working group is to be supported by legislative consultants under contract                               
07 through the Legislative Budget and Audit Committee.                                                                     
08    * Sec. 44. The uncodified law of the State of Alaska is amended by adding a new section to                         
09 read:                                                                                                                   
10       APPLICABILITY. Sections 7 - 9, 26, and 27 of this Act apply to a refund or payment                                
11 applied for on or after January 1, 2017.                                                                                
12    * Sec. 45. The uncodified law of the State of Alaska is amended by adding a new section to                         
13 read:                                                                                                                   
14       TRANSITION: QUALIFIED CAPITAL EXPENDITURES AND WELL LEASE                                                         
15 EXPENDITURES. (a) Notwithstanding the repeal of AS 43.55.023(a), (l), (n), and (o) by sec.                              
16 42 of this Act, and the amendments to AS 43.55.023(d) and (e), 43.55.029(a), 43.55.165(f),                              
17 and 43.55.170(c) by secs. 17, 18, 28, 35, and 36 of this Act, a taxpayer who incurs                                     
18            (1)  a qualified capital expenditure before the effective date of sec. 42 of this                            
19 Act that qualifies for a qualified capital expenditure credit under AS 43.55.023(a) may apply                           
20 for a credit or transferable tax credit certificate under AS 43.55.023 and assign the tax credit                        
21 under AS 43.55.029, as those sections read on the day before the effective date of sec. 42 of                           
22 this Act;                                                                                                               
23            (2)  a well lease expenditure before the effective date of sec. 42 of this Act that                          
24 qualifies for a well lease expenditure credit under AS 43.55.023(l) may apply for a credit or                           
25 transferable tax credit certificate under AS 43.55.023 and assign the tax credit under                                  
26 AS 43.55.029, as those sections read on the day before the effective date of sec. 42 of this                            
27 Act.                                                                                                                    
28       (b)  The Department of Revenue may continue to apply and enforce AS 43.55.023 and                                 
29 43.55.029, as those sections read on the day before the effective date of sec. 42 of this Act, for                      
30 qualified capital expenditures and well lease expenditures incurred before the effective date of                        
31 sec. 42 of this Act.                                                                                                    
01    * Sec. 46. The uncodified law of the State of Alaska is amended by adding a new section to                         
02 read:                                                                                                                   
03       TRANSITION: LEASE EXPENDITURES FOR A CALENDAR YEAR AFTER                                                          
04 2006 AND BEFORE 2010. Notwithstanding AS 43.55.165(a), as amended by sec. 33 of this                                    
05 Act, and the repeal of AS 43.55.165(j) and (k) by sec. 42 of this Act, AS 43.55.165(j) and (k)                          
06 apply to a producer's total lease expenditures for a calendar year after 2006 and before 2010                           
07 under AS 43.55.165, as that section read on the day before the effective date of sec. 42 of this                        
08 Act.                                                                                                                    
09    * Sec. 47. The uncodified law of the State of Alaska is amended by adding a new section to                         
10 read:                                                                                                                   
11       TRANSITION: REGULATIONS. The Department of Revenue and the Department of                                          
12 Natural Resources may adopt regulations necessary to implement the changes made by this                                 
13 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not                                 
14 before the effective date of the law implemented by the regulation. The Department of                                   
15 Revenue shall adopt regulations governing the use of tax credits under AS 43.55 for a                                   
16 calendar year for which the applicable tax credit provisions of AS 43.55 differ as between                              
17 parts of the year as a result of this Act.                                                                              
18    * Sec. 48. The uncodified law of the State of Alaska is amended by adding a new section to                         
19 read:                                                                                                                   
20       TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any                                                     
21 contrary provision of AS 44.62.240,                                                                                     
22            (1)  if the Department of Revenue expressly designates in a regulation that the                              
23 regulation applies retroactively, a regulation adopted by the Department of Revenue to                                  
24 implement, interpret, make specific, or otherwise carry out this Act may apply retroactively to                         
25 the effective date of the law implemented by the regulation;                                                            
26            (2)  if the Department of Natural Resources expressly designates in the                                      
27 regulation that the regulation applies retroactively, a regulation adopted by the Department of                         
28 Natural Resources to implement, interpret, make specific, or otherwise carry out the statutory                          
29 amendments in this Act affecting the administration of oil and gas leases issued under                                  
30 AS 38.05.180(f)(3)(B), (D), or (E), to the extent the regulation relates to the treatment of oil                        
31 and gas production taxes in determining net profits under those leases, may apply                                       
01 retroactively to the effective date of the law implemented by the regulation.                                           
02    * Sec. 49. Sections 24, 43, and 47 of this Act take effect immediately under                                       
03 AS 01.10.070(c).                                                                                                        
04    * Sec. 50. Sections 17, 18, 28 - 30, 33 - 37, 39, 42, 45, and 46 of this Act take effect                           
05 January 1, 2022.                                                                                                        
06    * Sec. 51. Except as provided in secs. 49 and 50 of this Act, this Act takes effect January 1,                     
07 2017.