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2d CSHB 247(RLS) am: "An Act amending the powers of the board of trustees of the Alaska Retirement Management Board to authorize purchase and sale of transferable tax credit certificates issued in conjunction with the production tax on oil and gas; relating to interest applicable to delinquent tax; relating to the oil and gas production tax, tax payments, and credits; relating to exploration incentive credits; 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 confidential information status and public record status of information in the possession of the Department of Revenue; relating to oil and gas lease expenditures and production tax credits for municipal entities; requiring a bond or cash deposit with a business license application for an oil or gas business; establishing a legislative working group to study the fiscal regime and tax structure and rates for oil and gas produced south of 68 degrees North latitude; and providing for an effective date."

00                     2d CS FOR HOUSE BILL NO. 247(RLS) am                                                                
01 "An Act amending the powers of the board of trustees of the Alaska Retirement                                           
02 Management Board to authorize purchase and sale of transferable tax credit certificates                                 
03 issued in conjunction with the production tax on oil and gas; relating to interest                                      
04 applicable to delinquent tax; relating to the oil and gas production tax, tax payments,                                 
05 and credits; relating to exploration incentive credits; relating to refunds for the gas                                 
06 storage facility tax credit, the liquefied natural gas storage facility tax credit, and the                             
07 qualified in-state oil refinery infrastructure expenditures tax credit; relating to the                                 
08 confidential information status and public record status of information in the possession                               
09 of the Department of Revenue; relating to oil and gas lease expenditures and production                                 
10 tax credits for municipal entities; requiring a bond or cash deposit with a business                                    
11 license application for an oil or gas business; establishing a legislative working group to                             
12 study the fiscal regime and tax structure and rates for oil and gas produced south of 68                                
01 degrees North latitude; and providing for an effective date."                                                           
02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
03    * Section 1. AS 37.10.220(b) is amended to read:                                                                   
04            (b)  The board may                                                                                           
05                 (1)  employ outside investment advisors to review investment policies;                                  
06                 (2)  enter into an agreement with the fiduciary of another state fund in                                
07       order to assume the management and investment of those assets;                                                    
08                 (3)  contract for other services necessary to execute the board's powers                                
09       and duties;                                                                                                       
10                 (4)  enter into confidentiality agreements that would exempt records                                    
11       from AS 40.25.110 and 40.25.120 if the records contain information that could affect                              
12       the value of investment by the board or that could impair the ability of the board to                             
13       acquire, maintain, or dispose of investments;                                                                 
14                 (5)  purchase, in whole or in part, transferable tax credit                                         
15       certificates issued under AS 43.55.023 and production tax credit certificates                                 
16       issued under AS 43.55.025 for 60 percent of the face value of a transferable tax                              
17       credit certificate or production tax credit certificate, and sell transferable tax                            
18       credit certificates and production tax credit certificates to the Department of                               
19       Revenue under AS 43.55.023(r) and 43.55.025(q) for a cash refund of the full face                             
20       value of the certificate; under this paragraph, the board                                                     
21                      (A)  may                                                                                       
22                           (i)  on the written application of a person to whom a                                     
23                 transferable tax credit certificate has been issued under                                           
24                 AS 43.55.023(d) or former AS 43.55.023(m) or to whom a                                              
25                 production tax credit certificate has been issued under                                             
26                 AS 43.55.025(f), purchase a transferable tax credit certificate or a                                
27                 production tax credit certificate; and                                                              
28                           (ii)  sell a transferable tax credit certificate or                                       
29                 production tax credit certificate only if the commissioner of                                       
30                 revenue determines that economic conditions are acceptable for the                                  
01                 state to purchase and pay for the credit; and                                                       
02                      (B)  shall apply the proceeds from a sale made under this                                      
03            paragraph to defray the unfunded pension liabilities of the systems for                                  
04            which the board has responsibility.                                                                      
05    * Sec. 2. AS 38.05.036(a) is amended to read:                                                                      
06            (a)  The department may conduct audits regarding royalty and net profits under                               
07       oil and gas contracts, agreements, or leases under this chapter and regarding costs                               
08       related to exploration licenses entered into under AS 38.05.131 - 38.05.134 and                                   
09       exploration incentive credits under this chapter [OR UNDER AS 41.09]. For purposes                                
10       of an audit under this section,                                                                               
11                 (1)  the department may examine the books, papers, records, or                                          
12       memoranda of a person regarding matters related to the audit; and                                                 
13                 (2)  the records and premises where a business is conducted shall be                                    
14       open at all reasonable times for inspection by the department.                                                    
15    * Sec. 3. AS 38.05.036(b) is amended to read:                                                                      
16            (b)  The Department of Revenue may obtain from the department information                                    
17       relating to royalty and net profits payments and to exploration incentive credits under                           
18       this chapter [OR UNDER AS 41.09], whether or not that information is confidential.                                
19       The Department of Revenue may use the information in carrying out its functions and                               
20       responsibilities under AS 43, and shall hold that information confidential to the extent                          
21       required by an agreement with the department or by AS 38.05.035(a)(8) [,                                          
22       AS 41.09.010(d),] or AS 43.05.230.                                                                                
23    * Sec. 4. AS 38.05.036(c) is amended to read:                                                                      
24            (c)  The department may obtain from the Department of Revenue all                                            
25       information obtained under AS 43 relating to royalty and net profits and to exploration                           
26       incentive credits. The department may use the information for purposes of carrying out                            
27       its responsibilities and functions under this chapter [AND AS 41.09]. Information                                 
28       made available to the department that was obtained under AS 43 is confidential and                                
29       subject to the provisions of AS 43.05.230.                                                                        
30    * Sec. 5. AS 38.05.036(f) is amended to read:                                                                      
31            (f)  Except as otherwise provided in this section or in connection with official                             
01       investigations or proceedings of the department, it is unlawful for a current or former                           
02       officer, employee, or agent of the state to divulge information obtained by the                                   
03       department as a result of an audit under this section that is required by an agreement                            
04       with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)] to be kept                                      
05       confidential.                                                                                                     
06    * Sec. 6. AS 38.05.036(g) is amended to read:                                                                      
07            (g)  Nothing in this section prohibits the publication of statistics in a manner                             
08       that maintains the confidentiality of information to the extent required by an                                    
09       agreement with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)].                                      
10    * Sec. 7. AS 40.25.100(a) is amended to read:                                                                      
11            (a)  Information in the possession of the Department of Revenue that discloses                               
12       the particulars of the business or affairs of a taxpayer or other person, including                               
13       information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement                              
14       under AS 38.05.020(b)(12), is not a matter of public record, except as provided in                                
15       AS 43.05.230(i) - (l) [AS 43.05.230(i) OR (k)] or for purposes of investigation and                           
16       law enforcement. The information shall be kept confidential except when its                                       
17       production is required in an official investigation, administrative adjudication under                            
18       AS 43.05.405 - 43.05.499, or court proceeding. These restrictions do not prohibit the                             
19       publication of statistics presented in a manner that prevents the identification of                               
20       particular reports and items, prohibit the publication of tax lists showing the names of                          
21       taxpayers who are delinquent and relevant information that may assist in the collection                           
22       of delinquent taxes, or prohibit the publication of records, proceedings, and decisions                           
23       under AS 43.05.405 - 43.05.499.                                                                                   
24    * Sec. 8. AS 43.05.225 is amended to read:                                                                         
25            Sec. 43.05.225. Interest. Unless otherwise provided,                                                       
26                 (1)  a delinquent tax under this title,                                                                 
27                      (A)  before January 1, 2014, bears interest in each calendar                                       
28            quarter at the rate of five percentage points above the annual rate charged                                  
29            member banks for advances by the 12th Federal Reserve District as of the first                               
30            day of that calendar quarter, or at the annual rate of 11 percent, whichever is                              
31            greater, compounded quarterly as of the last day of that quarter; [OR]                                       
01                      (B)  on and after January 1, 2014, and before January 1, 2017,                                 
02            bears interest in each calendar quarter at the rate of three percentage points                               
03            above the annual rate charged member banks for advances by the 12th Federal                                  
04            Reserve District as of the first day of that calendar quarter;                                           
05                      (C)  on and after January 1, 2017, bears interest                                              
06                           (i)  for the first four years after a tax becomes                                         
07                 delinquent, in each calendar quarter at the rate of five percentage                                 
08                 points above the annual rate charged member banks for advances                                      
09                 by the 12th Federal Reserve District as of the first day of that                                    
10                 calendar quarter, compounded quarterly as of the last day of that                                   
11                 quarter; and                                                                                        
12                           (ii)  after the first four years after a tax becomes                                      
13                 delinquent, in each calendar quarter at a rate of five percentage                                   
14                 points above the annual rate charged member banks for advances                                      
15                 by the 12th Federal Reserve District as of the first day of that                                    
16                 calendar quarter;                                                                                   
17                 (2)  the interest rate is 12 percent a year for                                                         
18                      (A)  delinquent fees payable under AS 05.15.095(c); and                                            
19                      (B)  unclaimed property that is not timely paid or delivered, as                                   
20            allowed by AS 34.45.470(a).                                                                                  
21    * Sec. 9. AS 43.05.230 is amended by adding a new subsection to read:                                              
22            (l)  For tax credit certificates purchased by the department in the preceding                                
23       calendar year under AS 43.55.028, the department shall make the following                                         
24       information public by April 30 of each year:                                                                      
25                 (1)  the name of each person from whom the department purchased a                                       
26       transferable tax credit certificate; and                                                                          
27                 (2)  the aggregate amount of the tax credit certificates purchased from                                 
28       the person in the preceding calendar year.                                                                        
29    * Sec. 10. AS 43.20.046(e) is amended to read:                                                                     
30            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
31       may use available money in the oil and gas tax credit fund established in AS 43.55.028                            
01       to make the refund applied for under (d) of this section in whole or in part if the                               
02       department finds that, [(1) THE CLAIMANT DOES NOT HAVE AN                                                     
03       OUTSTANDING LIABILITY TO THE STATE FOR UNPAID DELINQUENT                                                          
04       TAXES UNDER THIS TITLE; AND (2)] after application of all available tax credits,                                  
05       the claimant's total tax liability under this chapter for the calendar year in which the                          
06       claim is made is zero. [IN THIS SUBSECTION, "UNPAID DELINQUENT TAX"                                               
07       MEANS AN AMOUNT OF TAX FOR WHICH THE DEPARTMENT HAS ISSUED                                                        
08       AN ASSESSMENT THAT HAS NOT BEEN PAID AND, IF CONTESTED, HAS                                                       
09       NOT BEEN FINALLY RESOLVED IN THE TAXPAYER'S FAVOR.]                                                               
10    * Sec. 11. AS 43.20.047(e) is amended to read:                                                                     
11            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
12       may use money available in the oil and gas tax credit fund established in AS 43.55.028                            
13       to make a refund or payment under (d) of this section in whole or in part if the                                  
14       department finds that, [(1) THE CLAIMANT DOES NOT HAVE AN                                                     
15       OUTSTANDING LIABILITY TO THE STATE FOR UNPAID DELINQUENT                                                          
16       TAXES UNDER THIS TITLE; AND (2)] after application of all available tax credits,                                  
17       the claimant's total tax liability under this chapter for the calendar year in which the                          
18       claim is made is zero. [IN THIS SUBSECTION, "UNPAID DELINQUENT TAX"                                               
19       MEANS AN AMOUNT OF TAX FOR WHICH THE DEPARTMENT HAS ISSUED                                                        
20       AN ASSESSMENT THAT HAS NOT BEEN PAID AND, IF CONTESTED, HAS                                                       
21       NOT BEEN FINALLY RESOLVED IN THE TAXPAYER'S FAVOR.]                                                               
22    * Sec. 12. AS 43.20.053(e) is amended to read:                                                                     
23            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
24       may use money available in the oil and gas tax credit fund established in AS 43.55.028                            
25       to make a refund or payment under (d) of this section in whole or in part if the                                  
26       department finds that,                                                                                        
27                 [(1)  THE CLAIMANT DOES NOT HAVE AN OUTSTANDING                                                         
28       LIABILITY TO THE STATE FOR UNPAID DELINQUENT TAXES UNDER THIS                                                     
29       TITLE; AND                                                                                                        
30                 (2)]  after application of all available tax credits, the claimant's total tax                          
31       liability under this chapter for the calendar year in which the claim is made is zero.                            
01    * Sec. 13. AS 43.55.011(e) is amended to read:                                                                     
02            (e)  There is levied on the producer of oil or gas a tax for all oil and gas                                 
03       produced each calendar year from each lease or property in the state, less any oil and                            
04       gas the ownership or right to which is exempt from taxation or constitutes a                                      
05       landowner's royalty interest or for which a tax is levied by AS 43.55.014. Except as                              
06       otherwise provided under (f) [, (j), (k), (o),] and (p) of this section, for oil and gas                          
07       produced                                                                                                          
08                 (1)  before January 1, 2014, the tax is equal to the sum of                                             
09                      (A)  the annual production tax value of the taxable oil and gas                                    
10            as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and                                         
11                      (B)  the sum, over all months of the calendar year, of the tax                                     
12            amounts determined under (g) of this section;                                                                
13                 (2)  on and after January 1, 2014, and before January 1, 2022, the tax is                               
14       equal to the annual production tax value of the taxable oil and gas as calculated under                           
15       AS 43.55.160(a)(1) multiplied by 35 percent;                                                                      
16                 (3)  on and after January 1, 2022, the tax for                                                          
17                      (A)  oil is equal to the annual production tax value of the                                        
18            taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent;                                    
19                      (B)  gas is equal to 13 percent of the gross value at the point of                                 
20            production of the taxable gas; if the gross value at the point of production of                              
21            gas produced from a lease or property is less than zero, that gross value at the                             
22            point of production is considered zero for purposes of this subparagraph.                                    
23    * Sec. 14. AS 43.55.011(f) is amended to read:                                                                     
24            (f)  The levy of tax under (e) of this section for                                                           
25                 (1)  oil and gas produced before January 1, 2017 [2022], from leases or                             
26       properties that include land north of 68 degrees North latitude, other than gas subject                           
27       to (o) of this section, may not be less than                                                                      
28                      (A)  four percent of the gross value at the point of production                                    
29            when the average price per barrel for Alaska North Slope crude oil for sale on                               
30            the United States West Coast during the calendar year for which the tax is due                               
31            is more than $25;                                                                                            
01                      (B)  three percent of the gross value at the point of production                                   
02            when the average price per barrel for Alaska North Slope crude oil for sale on                               
03            the United States West Coast during the calendar year for which the tax is due                               
04            is over $20 but not over $25;                                                                                
05                      (C)  two percent of the gross value at the point of production                                     
06            when the average price per barrel for Alaska North Slope crude oil for sale on                               
07            the United States West Coast during the calendar year for which the tax is due                               
08            is over $17.50 but not over $20;                                                                             
09                      (D)  one percent of the gross value at the point of production                                     
10            when the average price per barrel for Alaska North Slope crude oil for sale on                               
11            the United States West Coast during the calendar year for which the tax is due                               
12            is over $15 but not over $17.50; or                                                                          
13                      (E)  zero percent of the gross value at the point of production                                    
14            when the average price per barrel for Alaska North Slope crude oil for sale on                               
15            the United States West Coast during the calendar year for which the tax is due                               
16            is $15 or less; [AND]                                                                                        
17                 (2)  oil and gas produced after December 31, 2016, and before                                       
18       January 1, 2022, from leases or properties that include land north of 68 degrees                              
19       North latitude, other than gas subject to (o) of this section, may not be less than                           
20                      (A)  five percent of the gross value at the point of production                                
21            when the average price per barrel for Alaska North Slope crude oil for                                   
22            sale on the United States West Coast during the calendar year for which                                  
23            the tax is due is more than $70;                                                                         
24                      (B)  four percent of the gross value at the point of                                           
25            production when the average price per barrel for Alaska North Slope                                      
26            crude oil for sale on the United States West Coast during the calendar                                   
27            year for which the tax is due is over $25 but not over $70;                                              
28                      (C)  three percent of the gross value at the point of                                          
29            production when the average price per barrel for Alaska North Slope                                      
30            crude oil for sale on the United States West Coast during the calendar                                   
31            year for which the tax is due is over $20 but not over $25;                                              
01                      (D)  two percent of the gross value at the point of production                                 
02            when the average price per barrel for Alaska North Slope crude oil for                                   
03            sale on the United States West Coast during the calendar year for which                                  
04            the tax is due is over $17.50 but not over $20;                                                          
05                      (E)  one percent of the gross value at the point of production                                 
06            when the average price per barrel for Alaska North Slope crude oil for                                   
07            sale on the United States West Coast during the calendar year for which                                  
08            the tax is due is over $15 but not over $17.50; or                                                       
09                      (F)  zero percent of the gross value at the point of                                           
10            production when the average price per barrel for Alaska North Slope                                      
11            crude oil for sale on the United States West Coast during the calendar                                   
12            year for which the tax is due is $15 or less; and                                                        
13                 (3)  oil produced on and after January 1, 2022, from leases or properties                           
14       that include land north of 68 degrees North latitude, may not be less than                                        
15                      (A)  five percent of the gross value at the point of production                                
16            when the average price per barrel for Alaska North Slope crude oil for                                   
17            sale on the United States West Coast during the calendar year for which                                  
18            the tax is due is more than $70;                                                                         
19                      (B)  four percent of the gross value at the point of production                                
20            when the average price per barrel for Alaska North Slope crude oil for sale on                               
21            the United States West Coast during the calendar year for which the tax is due                               
22            is over [MORE THAN] $25 but not over $70;                                                            
23                      (C) [(B)]  three percent of the gross value at the point of                                    
24            production when the average price per barrel for Alaska North Slope crude oil                                
25            for sale on the United States West Coast during the calendar year for which the                              
26            tax is due is over $20 but not over $25;                                                                     
27                      (D) [(C)]  two percent of the gross value at the point of                                      
28            production when the average price per barrel for Alaska North Slope crude oil                                
29            for sale on the United States West Coast during the calendar year for which the                              
30            tax is due is over $17.50 but not over $20;                                                                  
31                      (E) [(D)]  one percent of the gross value at the point of                                      
01            production when the average price per barrel for Alaska North Slope crude oil                                
02            for sale on the United States West Coast during the calendar year for which the                              
03            tax is due is over $15 but not over $17.50; or                                                               
04                      (F) [(E)]  zero percent of the gross value at the point of                                     
05            production when the average price per barrel for Alaska North Slope crude oil                                
06            for sale on the United States West Coast during the calendar year for which the                              
07            tax is due is $15 or less.                                                                                   
08    * Sec. 15. AS 43.55.011(f), as amended by sec. 14 of this Act, is amended to read:                                 
09            (f)  The levy of tax under (e) of this section for                                                           
10                 (1)  oil and gas produced before January 1, 2017, from leases or                                        
11       properties that include land north of 68 degrees North latitude [, OTHER THAN GAS                                 
12       SUBJECT TO (o) OF THIS SECTION,] may not be less than                                                             
13                      (A)  four percent of the gross value at the point of production                                    
14            when the average price per barrel for Alaska North Slope crude oil for sale on                               
15            the United States West Coast during the calendar year for which the tax is due                               
16            is more than $25;                                                                                            
17                      (B)  three percent of the gross value at the point of production                                   
18            when the average price per barrel for Alaska North Slope crude oil for sale on                               
19            the United States West Coast during the calendar year for which the tax is due                               
20            is over $20 but not over $25;                                                                                
21                      (C)  two percent of the gross value at the point of production                                     
22            when the average price per barrel for Alaska North Slope crude oil for sale on                               
23            the United States West Coast during the calendar year for which the tax is due                               
24            is over $17.50 but not over $20;                                                                             
25                      (D)  one percent of the gross value at the point of production                                     
26            when the average price per barrel for Alaska North Slope crude oil for sale on                               
27            the United States West Coast during the calendar year for which the tax is due                               
28            is over $15 but not over $17.50; or                                                                          
29                      (E)  zero percent of the gross value at the point of production                                    
30            when the average price per barrel for Alaska North Slope crude oil for sale on                               
31            the United States West Coast during the calendar year for which the tax is due                               
01            is $15 or less;                                                                                              
02                 (2)  oil and gas produced after December 31, 2016, and before                                           
03       January 1, 2022, from leases or properties that include land north of 68 degrees North                            
04       latitude, other than gas subject to (o) of this section, may not be less than                                     
05                      (A)  five percent of the gross value at the point of production                                    
06            when the average price per barrel for Alaska North Slope crude oil for sale on                               
07            the United States West Coast during the calendar year for which the tax is due                               
08            is more than $70;                                                                                            
09                      (B)  four percent of the gross value at the point of production                                    
10            when the average price per barrel for Alaska North Slope crude oil for sale on                               
11            the United States West Coast during the calendar year for which the tax is due                               
12            is over $25 but not over $70;                                                                                
13                      (C)  three percent of the gross value at the point of production                                   
14            when the average price per barrel for Alaska North Slope crude oil for sale on                               
15            the United States West Coast during the calendar year for which the tax is due                               
16            is over $20 but not over $25;                                                                                
17                      (D)  two percent of the gross value at the point of production                                     
18            when the average price per barrel for Alaska North Slope crude oil for sale on                               
19            the United States West Coast during the calendar year for which the tax is due                               
20            is over $17.50 but not over $20;                                                                             
21                      (E)  one percent of the gross value at the point of production                                     
22            when the average price per barrel for Alaska North Slope crude oil for sale on                               
23            the United States West Coast during the calendar year for which the tax is due                               
24            is over $15 but not over $17.50; or                                                                          
25                      (F)  zero percent of the gross value at the point of production                                    
26            when the average price per barrel for Alaska North Slope crude oil for sale on                               
27            the United States West Coast during the calendar year for which the tax is due                               
28            is $15 or less; and                                                                                          
29                 (3)  oil produced on and after January 1, 2022, from leases or properties                             
30       that include land north of 68 degrees North latitude, may not be less than                                        
31                      (A)  five percent of the gross value at the point of production                                    
01            when the average price per barrel for Alaska North Slope crude oil for sale on                               
02            the United States West Coast during the calendar year for which the tax is due                               
03            is more than $70;                                                                                            
04                      (B)  four percent of the gross value at the point of production                                  
05            when the average price per barrel for Alaska North Slope crude oil for sale on                               
06            the United States West Coast during the calendar year for which the tax is due                               
07            is over $25 but not over $70;                                                                                
08                      (C)  three percent of the gross value at the point of production                                   
09            when the average price per barrel for Alaska North Slope crude oil for sale on                               
10            the United States West Coast during the calendar year for which the tax is due                               
11            is over $20 but not over $25;                                                                                
12                      (D)  two percent of the gross value at the point of production                                     
13            when the average price per barrel for Alaska North Slope crude oil for sale on                               
14            the United States West Coast during the calendar year for which the tax is due                               
15            is over $17.50 but not over $20;                                                                             
16                      (E)  one percent of the gross value at the point of production                                     
17            when the average price per barrel for Alaska North Slope crude oil for sale on                               
18            the United States West Coast during the calendar year for which the tax is due                               
19            is over $15 but not over $17.50; or                                                                          
20                      (F)  zero percent of the gross value at the point of production                                    
21            when the average price per barrel for Alaska North Slope crude oil for sale on                               
22            the United States West Coast during the calendar year for which the tax is due                               
23            is $15 or less.                                                                                              
24    * Sec. 16. AS 43.55.011(m) is amended to read:                                                                     
25            (m)  Notwithstanding any contrary provision of [AS 38.05.180(i),                                             
26       AS 41.09.010,] AS 43.55.024 [,] or 43.55.025, the department shall provide by                                     
27       regulation a method to ensure that, for a calendar year for which a producer's tax                                
28       liability is limited by (j), (k), or (o) of this section, tax credits based on a lease                            
29       expenditure incurred before January 1, 2011, that are otherwise available under                                   
30       [AS 38.05.180(i), AS 41.09.010,] AS 43.55.024 [,] or 43.55.025 and allocated to gas                               
31       subject to the limitations in (j), (k), and (o) of this section are accounted for as though                       
01       the credits had been applied first against a tax liability calculated without regard to the                       
02       limitations under (j), (k), and (o) of this section so as to reduce the tax liability to the                      
03       maximum amount provided for under (j) or (o) of this section for the production of gas                            
04       or (k) of this section for the production of oil. The regulation must provide for a                               
05       reasonable method to allocate tax credits to gas subject to (j) and (o) of this section.                          
06       Only the amount of a tax credit remaining after the accounting provided for under this                            
07       subsection may be used for a later calendar year, transferred to another person, or                               
08       applied against a tax levied on the production of oil or gas not subject to (j), (k), or (o)                      
09       of this section to the extent otherwise allowed.                                                                  
10    * Sec. 17. AS 43.55.020(a) is amended to read:                                                                     
11            (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                             
12       the tax as follows:                                                                                               
13                 (1)  for oil and gas produced before January 1, 2014, an installment                                    
14       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
15       as allowed by law, is due for each month of the calendar year on the last day of the                              
16       following month; except as otherwise provided under (2) of this subsection, the                                   
17       amount of the installment payment is the sum of the following amounts, less 1/12 of                               
18       the tax credits that are allowed by law to be applied against the tax levied by                                   
19       AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                              
20       not be less than zero:                                                                                            
21                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
22            produced from leases or properties in the state outside the Cook Inlet                                       
23            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
24            the greater of                                                                                               
25                           (i)  zero; or                                                                                 
26                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
27                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
28                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
29                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
30                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
31                 at the point of production of the oil and gas produced from the leases or                               
01                 properties during the month for which the installment payment is                                        
02                 calculated;                                                                                             
03                      (B)  for oil and gas produced from leases or properties subject                                    
04            to AS 43.55.011(f), 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 and gas produced from the leases or properties                                    
09                 during the month for which the installment payment is calculated; or                                    
10                           (iii)  the sum of 25 percent and the tax rate calculated for                                  
11                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
12                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
13                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
14                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
15                 at the point of production of the oil and gas produced from those leases                                
16                 or properties during the month for which the installment payment is                                     
17                 calculated;                                                                                             
18                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
19            each lease or property, the greater of                                                                       
20                           (i)  zero; or                                                                                 
21                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
22                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
23                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
24                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
25                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
26                 produced from the lease or property from the gross value at the point of                                
27                 production of the oil or gas, respectively, produced from the lease or                                  
28                 property during the month for which the installment payment is                                          
29                 calculated;                                                                                             
30                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
31                           (i)  the sum of 25 percent and the tax rate calculated for                                    
01                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
02                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
03                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
04                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
05                 at the point of production of the oil and gas produced from the leases or                               
06                 properties during the month for which the installment payment is                                        
07                 calculated, but not less than zero; or                                                                  
08                           (ii)  four percent of the gross value at the point of                                         
09                 production of the oil and gas produced from the leases or properties                                    
10                 during the month, but not less than zero;                                                               
11                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
12       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
13       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
14       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
15       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
16       amount of taxable gas produced during the month for the amount of taxable gas                                     
17       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
18       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
19       amount of taxable oil produced during the calendar year;                                                          
20                 (3)  an installment payment of the estimated tax levied by                                              
21       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
22       on the last day of the following month; the amount of the installment payment is the                              
23       sum of                                                                                                            
24                      (A)  the applicable tax rate for oil provided under                                                
25            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
26            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
27            during the month; and                                                                                        
28                      (B)  the applicable tax rate for gas provided under                                                
29            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
30            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
31            during the month;                                                                                            
01                 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                       
02       applied as allowed by law, that exceeds the total of the amounts due as installment                               
03       payments of estimated tax is due on March 31 of the year following the calendar year                              
04       of production;                                                                                                    
05                 (5)  for oil and gas produced on and after January 1, 2014, and before                                  
06       January 1, 2022, an installment payment of the estimated tax levied by                                            
07       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
08       month of the calendar year on the last day of the following month; except as otherwise                            
09       provided under (6) and (10) of this subsection, the amount of the installment payment                         
10       is the sum of the following amounts, less 1/12 of the tax credits that are allowed by                             
11       law to be applied against the tax levied by AS 43.55.011(e) for the calendar year, but                            
12       the amount of the installment payment may not be less than zero:                                                  
13                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
14            produced from leases or properties in the state outside the Cook Inlet                                       
15            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
16            the greater of                                                                                               
17                           (i)  zero; or                                                                                 
18                           (ii)  35 percent multiplied by the remainder obtained by                                      
19                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
20                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
21                 deductible 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;                                                                                             
25                      (B)  for oil and gas produced from leases or properties subject                                    
26            to AS 43.55.011(f), the greatest of                                                                          
27                           (i)  zero;                                                                                    
28                           (ii)  zero percent, one percent, two percent, three                                           
29                 percent, or four percent, as applicable, of the gross value at the point of                             
30                 production of the oil and gas produced from the leases or properties                                    
31                 during the month for which the installment payment is calculated; or                                    
01                           (iii)  35 percent multiplied by the remainder obtained by                                     
02                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
03                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
04                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
05                 at the point of production of the oil and gas produced from those leases                                
06                 or properties during the month for which the installment payment is                                     
07                 calculated, except that, for the purposes of this calculation, a reduction                              
08                 from the gross value at the point of production may apply for oil and                                   
09                 gas subject to AS 43.55.160(f) or (g);                                                                  
10                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
11            each lease or property, the greater of                                                                       
12                           (i)  zero; or                                                                                 
13                           (ii)  35 percent multiplied by the remainder obtained by                                      
14                 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 under AS 43.55.160 for the oil or gas, respectively,                                         
17                 produced from the lease or property from the gross value at the point of                                
18                 production of the oil or gas, respectively, produced from the lease or                                  
19                 property during the month for which the installment payment is                                          
20                 calculated;                                                                                             
21                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
22                           (i)  35 percent multiplied by the remainder obtained by                                       
23                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
24                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
25                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
26                 at the point of production of the oil and gas produced from the leases or                               
27                 properties during the month for which the installment payment is                                        
28                 calculated, but not less than zero; or                                                                  
29                           (ii)  four percent of the gross value at the point of                                         
30                 production of the oil and gas produced from the leases or properties                                    
31                 during the month, but not less than zero;                                                               
01                 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                
02       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
03       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
04       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
05       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
06       amount of taxable gas produced during the month for the amount of taxable gas                                     
07       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
08       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
09       amount of taxable oil produced during the calendar year;                                                          
10                 (7)  for oil and gas produced on or after January 1, 2022, an installment                               
11       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
12       as allowed by law, is due for each month of the calendar year on the last day of the                              
13       following month; except as provided in (10) of this subsection, the amount of the                             
14       installment payment is the sum of the following amounts, less 1/12 of the tax credits                             
15       that are allowed by law to be applied against the tax levied by AS 43.55.011(e) for the                           
16       calendar year, but the amount of the installment payment may not be less than zero:                               
17                      (A)  for oil produced from leases or properties that include land                                  
18            north of 68 degrees North latitude, the greatest of                                                          
19                           (i)  zero;                                                                                    
20                           (ii)  zero percent, one percent, two percent, three                                           
21                 percent, or four percent, as applicable, of the gross value at the point of                             
22                 production of the oil produced from the leases or properties during the                                 
23                 month for which the installment payment is calculated; or                                               
24                           (iii)  35 percent multiplied by the remainder obtained by                                     
25                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
26                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
27                 deductible for the oil under AS 43.55.160(h)(1) from the gross value at                                 
28                 the point of production of the oil produced from those leases or                                        
29                 properties during the month for which the installment payment is                                        
30                 calculated, except that, for the purposes of this calculation, a reduction                              
31                 from the gross value at the point of production may apply for oil                                       
01                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
02                      (B)  for oil produced before or during the last calendar year                                      
03            under AS 43.55.024(b) for which the producer could take a tax credit under                                   
04            AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                               
05            sedimentary basin, no part of which is north of 68 degrees North latitude, other                             
06            than leases or properties subject to AS 43.55.011(p), the greater of                                         
07                           (i)  zero; or                                                                                 
08                           (ii)  35 percent multiplied by the remainder obtained by                                      
09                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
10                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
11                 deductible for the oil under AS 43.55.160(h)(2) from the gross value at                                 
12                 the point of production of the oil produced from the leases or properties                               
13                 during the month for which the installment payment is calculated;                                       
14                      (C)  for oil and gas produced from leases or properties subject                                    
15            to AS 43.55.011(p), except as otherwise provided under (8) of this subsection,                               
16            the sum of                                                                                                   
17                           (i)  35 percent multiplied by the remainder obtained by                                       
18                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
19                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
20                 deductible for the oil under AS 43.55.160(h)(3) from the gross value at                                 
21                 the point of production of the oil produced from the leases or properties                               
22                 during the month for which the installment payment is calculated, but                                   
23                 not less than zero; and                                                                                 
24                           (ii)  13 percent of the gross value at the point of                                           
25                 production of the gas produced from the leases or properties during the                                 
26                 month, but not less than zero;                                                                          
27                      (D)  for oil produced from leases or properties in the state, no                                   
28            part of which is north of 68 degrees North latitude, other than leases or                                    
29            properties subject to (B) or (C) of this paragraph, the greater of                                           
30                           (i)  zero; or                                                                                 
31                           (ii)  35 percent multiplied by the remainder obtained by                                      
01                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
02                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
03                 deductible for the oil under AS 43.55.160(h)(4) from the gross value at                                 
04                 the point of production of the oil produced from the leases or properties                               
05                 during the month for which the installment payment is calculated;                                       
06                      (E)  for gas produced from each lease or property in the state,                                    
07            other than a lease or property subject to AS 43.55.011(p), 13 percent of the                                 
08            gross value at the point of production of the gas produced from the lease or                                 
09            property during the month for which the installment payment is calculated, but                               
10            not less than zero;                                                                                          
11                 (8)  an amount calculated under (7)(C) of this subsection may not                                       
12       exceed four percent of the gross value at the point of production of the oil and gas                              
13       produced from leases or properties subject to AS 43.55.011(p) during the month for                                
14       which the installment payment is calculated;                                                                      
15                 (9)  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and                                  
16       (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point                          
17       of production is determined under AS 43.55.011(f)(1) - (3) [AS 43.55.011(f)(1) OR                             
18       (2)] but substituting the phrase "month for which the installment payment is                                      
19       calculated" in AS 43.55.011(f)(1) - (3) [AS 43.55.011(f)(1) AND (2)] for the phrase                           
20       "calendar year for which the tax is due";                                                                     
21                 (10)  after December 31, 2016, for the purposes of a calculation                                    
22       under (5) or (7) of this subsection, a credit under AS 43.55.024(j) may not be                                
23       applied to reduce an installment payment to less than the applicable percentage                               
24       under AS 43.55.011(f). ["]                                                                                    
25    * Sec. 18. AS 43.55.020(a), as amended by sec. 17 of this Act, is amended to read:                                 
26            (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                             
27       the tax as follows:                                                                                               
28                 (1)  [FOR OIL AND GAS PRODUCED BEFORE JANUARY 1, 2014,                                                  
29       AN INSTALLMENT PAYMENT OF THE ESTIMATED TAX LEVIED BY                                                             
30       AS 43.55.011(e), NET OF ANY TAX CREDITS APPLIED AS ALLOWED BY                                                     
31       LAW, IS DUE FOR EACH MONTH OF THE CALENDAR YEAR ON THE LAST                                                       
01       DAY OF THE FOLLOWING MONTH; EXCEPT AS OTHERWISE PROVIDED                                                          
02       UNDER (2) OF THIS SUBSECTION, THE AMOUNT OF THE INSTALLMENT                                                       
03       PAYMENT IS THE SUM OF THE FOLLOWING AMOUNTS, LESS 1/12 OF THE                                                     
04       TAX CREDITS THAT ARE ALLOWED BY LAW TO BE APPLIED AGAINST                                                         
05       THE TAX LEVIED BY AS 43.55.011(e) FOR THE CALENDAR YEAR, BUT THE                                                  
06       AMOUNT OF THE INSTALLMENT PAYMENT MAY NOT BE LESS THAN                                                            
07       ZERO:                                                                                                             
08                      (A)  FOR OIL AND GAS NOT SUBJECT TO AS 43.55.011(o)                                                
09            OR (p) PRODUCED FROM LEASES OR PROPERTIES IN THE STATE                                                       
10            OUTSIDE THE COOK INLET SEDIMENTARY BASIN, OTHER THAN                                                         
11            LEASES OR PROPERTIES SUBJECT TO AS 43.55.011(f), THE GREATER                                                 
12            OF                                                                                                           
13                           (i)  ZERO; OR                                                                                 
14                           (ii)  THE SUM OF 25 PERCENT AND THE TAX                                                       
15                 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g)                                                     
16                 MULTIPLIED BY THE REMAINDER OBTAINED BY                                                                 
17                 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE                                                       
18                 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION                                                        
19                 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE                                                    
20                 FOR THE OIL AND GAS UNDER AS 43.55.160 FROM THE                                                         
21                 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL                                                       
22                 AND GAS PRODUCED FROM THE LEASES OR PROPERTIES                                                          
23                 DURING THE MONTH FOR WHICH THE INSTALLMENT                                                              
24                 PAYMENT IS CALCULATED;                                                                                  
25                      (B)  FOR OIL AND GAS PRODUCED FROM LEASES OR                                                       
26            PROPERTIES SUBJECT TO AS 43.55.011(f), THE GREATEST OF                                                       
27                           (i)  ZERO;                                                                                    
28                           (ii)  ZERO PERCENT, ONE PERCENT, TWO                                                          
29                 PERCENT, THREE PERCENT, OR FOUR PERCENT, AS                                                             
30                 APPLICABLE, OF THE GROSS VALUE AT THE POINT OF                                                          
31                 PRODUCTION OF THE OIL AND GAS PRODUCED FROM THE                                                         
01                 LEASES OR PROPERTIES DURING THE MONTH FOR WHICH                                                         
02                 THE INSTALLMENT PAYMENT IS CALCULATED; OR                                                               
03                           (iii)  THE SUM OF 25 PERCENT AND THE TAX                                                      
04                 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g)                                                     
05                 MULTIPLIED BY THE REMAINDER OBTAINED BY                                                                 
06                 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE                                                       
07                 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION                                                        
08                 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE                                                    
09                 FOR THE OIL AND GAS UNDER AS 43.55.160 FROM THE                                                         
10                 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL                                                       
11                 AND GAS PRODUCED FROM THOSE LEASES OR PROPERTIES                                                        
12                 DURING THE MONTH FOR WHICH THE INSTALLMENT                                                              
13                 PAYMENT IS CALCULATED;                                                                                  
14                      (C)  FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k),                                               
15            OR (o), FOR EACH LEASE OR PROPERTY, THE GREATER OF                                                           
16                           (i)  ZERO; OR                                                                                 
17                           (ii)  THE SUM OF 25 PERCENT AND THE TAX                                                       
18                 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g)                                                     
19                 MULTIPLIED BY THE REMAINDER OBTAINED BY                                                                 
20                 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE                                                       
21                 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION                                                        
22                 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE                                                    
23                 UNDER AS 43.55.160 FOR THE OIL OR GAS, RESPECTIVELY,                                                    
24                 PRODUCED FROM THE LEASE OR PROPERTY FROM THE                                                            
25                 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL                                                       
26                 OR GAS, RESPECTIVELY, PRODUCED FROM THE LEASE OR                                                        
27                 PROPERTY DURING THE MONTH FOR WHICH THE                                                                 
28                 INSTALLMENT PAYMENT IS CALCULATED;                                                                      
29                      (D)  FOR OIL AND GAS SUBJECT TO AS 43.55.011(p),                                                   
30            THE LESSER OF                                                                                                
31                           (i)  THE SUM OF 25 PERCENT AND THE TAX                                                        
01                 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g)                                                     
02                 MULTIPLIED BY THE REMAINDER OBTAINED BY                                                                 
03                 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE                                                       
04                 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION                                                        
05                 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE                                                    
06                 FOR THE OIL AND GAS UNDER AS 43.55.160 FROM THE                                                         
07                 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL                                                       
08                 AND GAS PRODUCED FROM THE LEASES OR PROPERTIES                                                          
09                 DURING THE MONTH FOR WHICH THE INSTALLMENT                                                              
10                 PAYMENT IS CALCULATED, BUT NOT LESS THAN ZERO; OR                                                       
11                           (ii)  FOUR PERCENT OF THE GROSS VALUE AT                                                      
12                 THE POINT OF PRODUCTION OF THE OIL AND GAS                                                              
13                 PRODUCED FROM THE LEASES OR PROPERTIES DURING THE                                                       
14                 MONTH, BUT NOT LESS THAN ZERO;                                                                          
15                 (2)  AN AMOUNT CALCULATED UNDER (1)(C) OF THIS                                                          
16       SUBSECTION FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k), OR (o) MAY                                             
17       NOT EXCEED THE PRODUCT OBTAINED BY CARRYING OUT THE                                                               
18       CALCULATION SET OUT IN AS 43.55.011(j)(1) OR (2) OR 43.55.011(o), AS                                              
19       APPLICABLE, FOR GAS OR SET OUT IN AS 43.55.011(k)(1) OR (2), AS                                                   
20       APPLICABLE, FOR OIL, BUT SUBSTITUTING IN AS 43.55.011(j)(1)(A) OR                                                 
21       (2)(A) OR 43.55.011(o), AS APPLICABLE, THE AMOUNT OF TAXABLE GAS                                                  
22       PRODUCED DURING THE MONTH FOR THE AMOUNT OF TAXABLE GAS                                                           
23       PRODUCED DURING THE CALENDAR YEAR AND SUBSTITUTING IN                                                             
24       AS 43.55.011(k)(1)(A) OR (2)(A), AS APPLICABLE, THE AMOUNT OF                                                     
25       TAXABLE OIL PRODUCED DURING THE MONTH FOR THE AMOUNT OF                                                           
26       TAXABLE OIL PRODUCED DURING THE CALENDAR YEAR;                                                                    
27                 (3)]  an installment payment of the estimated tax levied by                                             
28       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
29       on the last day of the following month; the amount of the installment payment is the                              
30       sum of                                                                                                            
31                      (A)  the applicable tax rate for oil provided under                                                
01            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
02            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
03            during the month; and                                                                                        
04                      (B)  the applicable tax rate for gas provided under                                                
05            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
06            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
07            during the month;                                                                                            
08                 (2) [(4)]  any amount of tax levied by AS 43.55.011, net of any credits                             
09       applied as allowed by law, that exceeds the total of the amounts due as installment                               
10       payments of estimated tax is due on March 31 of the year following the calendar year                              
11       of production;                                                                                                    
12                 (3) [(5)]  for oil and gas produced on and after January 1, 2014, and                               
13       before January 1, 2022, an installment payment of the estimated tax levied by                                     
14       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
15       month of the calendar year on the last day of the following month; except as otherwise                            
16       provided under (7) [(6) AND (10)] of this subsection, the amount of the installment                           
17       payment is the sum of the following amounts, less 1/12 of the tax credits that are                                
18       allowed by law to be applied against the tax levied by AS 43.55.011(e) for the                                    
19       calendar year, but the amount of the installment payment may not be less than zero:                               
20                      (A)  for oil and gas not subject to AS 43.55.011(p)                                            
21            [AS 43.55.011(o) OR (p)] produced from leases or properties in the state                                     
22            outside the Cook Inlet sedimentary basin, other than leases or properties                                    
23            subject to AS 43.55.011(f), 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 and gas under AS 43.55.160 from the gross value                                  
29                 at the point of production of the oil and gas produced from the leases or                               
30                 properties during the month for which the installment payment is                                        
31                 calculated;                                                                                             
01                      (B)  for oil and gas produced from leases or properties subject                                    
02            to AS 43.55.011(f), the greatest of                                                                          
03                           (i)  zero;                                                                                    
04                           (ii)  zero percent, one percent, two percent, three                                           
05                 percent, or four percent, as applicable, of the gross value at the point of                             
06                 production of the oil and gas produced from the leases or properties                                    
07                 during the month for which the installment payment is calculated; or                                    
08                           (iii)  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 those leases                                
13                 or properties during the month for which the installment payment is                                     
14                 calculated, except that, for the purposes of this calculation, a reduction                              
15                 from the gross value at the point of production may apply for oil and                                   
16                 gas subject to AS 43.55.160(f) or (g);                                                                  
17                      (C)  [FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k),                                              
18            OR (o), FOR EACH LEASE OR PROPERTY, THE GREATER OF                                                           
19                           (i)  ZERO; OR                                                                                 
20                           (ii)  35 PERCENT MULTIPLIED BY THE                                                            
21                 REMAINDER OBTAINED BY SUBTRACTING 1/12 OF THE                                                           
22                 PRODUCER'S ADJUSTED LEASE EXPENDITURES FOR THE                                                          
23                 CALENDAR YEAR OF PRODUCTION UNDER AS 43.55.165 AND                                                      
24                 43.55.170 THAT ARE DEDUCTIBLE UNDER AS 43.55.160 FOR                                                    
25                 THE OIL OR GAS, RESPECTIVELY, PRODUCED FROM THE                                                         
26                 LEASE OR PROPERTY FROM THE GROSS VALUE AT THE                                                           
27                 POINT OF PRODUCTION OF THE OIL OR GAS, RESPECTIVELY,                                                    
28                 PRODUCED FROM THE LEASE OR PROPERTY DURING THE                                                          
29                 MONTH FOR WHICH THE INSTALLMENT PAYMENT IS                                                              
30                 CALCULATED;                                                                                             
31                      (D)]  for oil and gas subject to AS 43.55.011(p), the lesser of                                    
01                           (i)  35 percent multiplied by the remainder obtained by                                       
02                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
03                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
04                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
05                 at the point of production of the oil and gas produced from the leases or                               
06                 properties during the month for which the installment payment is                                        
07                 calculated, but not less than zero; or                                                                  
08                           (ii)  four percent of the gross value at the point of                                         
09                 production of the oil and gas produced from the leases or properties                                    
10                 during the month, but not less than zero;                                                               
11                 (4) [(6)  AN AMOUNT CALCULATED UNDER (5)(C) OF THIS                                                 
12       SUBSECTION FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k), OR (o) MAY                                             
13       NOT EXCEED THE PRODUCT OBTAINED BY CARRYING OUT THE                                                               
14       CALCULATION SET OUT IN AS 43.55.011(j)(1) OR (2) OR 43.55.011(o), AS                                              
15       APPLICABLE, FOR GAS OR SET OUT IN AS 43.55.011(k)(1) OR (2), AS                                                   
16       APPLICABLE, FOR OIL, BUT SUBSTITUTING IN AS 43.55.011(j)(1)(A) OR                                                 
17       (2)(A) OR 43.55.011(o), AS APPLICABLE, THE AMOUNT OF TAXABLE GAS                                                  
18       PRODUCED DURING THE MONTH FOR THE AMOUNT OF TAXABLE GAS                                                           
19       PRODUCED DURING THE CALENDAR YEAR AND SUBSTITUTING IN                                                             
20       AS 43.55.011(k)(1)(A) OR (2)(A), AS APPLICABLE, THE AMOUNT OF                                                     
21       TAXABLE OIL PRODUCED DURING THE MONTH FOR THE AMOUNT OF                                                           
22       TAXABLE OIL PRODUCED DURING THE CALENDAR YEAR;                                                                    
23                 (7)]  for oil and gas produced on or after January 1, 2022, an                                          
24       installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax                                
25       credits applied as allowed by law, is due for each month of the calendar year on the                              
26       last day of the following month; except as provided in (7) [(10)] of this subsection, the                     
27       amount of the installment payment is the sum of the following amounts, less 1/12 of                               
28       the tax credits that are allowed by law to be applied against the tax levied by                                   
29       AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                              
30       not be less than zero:                                                                                            
31                      (A)  for oil produced from leases or properties that include land                                  
01            north of 68 degrees North latitude, the greatest of                                                          
02                           (i)  zero;                                                                                    
03                           (ii)  zero percent, one percent, two percent, three                                           
04                 percent, or four percent, as applicable, of the gross value at the point of                             
05                 production of the oil produced from the leases or properties during the                                 
06                 month for which the installment payment is calculated; or                                               
07                           (iii)  35 percent multiplied by the remainder obtained by                                     
08                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
09                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
10                 deductible for the oil under AS 43.55.160(h)(1) from the gross value at                                 
11                 the point of production of the oil produced from those leases or                                        
12                 properties during the month for which the installment payment is                                        
13                 calculated, except that, for the purposes of this calculation, a reduction                              
14                 from the gross value at the point of production may apply for oil                                       
15                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
16                      (B)  for oil produced before or during the last calendar year                                      
17            under AS 43.55.024(b) for which the producer could take a tax credit under                                   
18            AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                               
19            sedimentary basin, no part of which is north of 68 degrees North latitude, other                             
20            than leases or properties subject to AS 43.55.011(p), the greater of                                         
21                           (i)  zero; or                                                                                 
22                           (ii)  35 percent multiplied by the remainder obtained by                                      
23                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
24                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
25                 deductible for the oil under AS 43.55.160(h)(2) from the gross value at                                 
26                 the point of production of the oil produced from the leases or properties                               
27                 during the month for which the installment payment is calculated;                                       
28                      (C)  for oil and gas produced from leases or properties subject                                    
29            to AS 43.55.011(p), except as otherwise provided under (5) [(8)] of this                                 
30            subsection, the sum of                                                                                       
31                           (i)  35 percent multiplied by the remainder obtained by                                       
01                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
02                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
03                 deductible for the oil under AS 43.55.160(h)(3) from the gross value at                                 
04                 the point of production of the oil produced from the leases or properties                               
05                 during the month for which the installment payment is calculated, but                                   
06                 not less than zero; and                                                                                 
07                           (ii)  13 percent of the gross value at the point of                                           
08                 production of the gas produced from the leases or properties during the                                 
09                 month, but not less than zero;                                                                          
10                      (D)  for oil produced from leases or properties in the state, no                                   
11            part of which is north of 68 degrees North latitude, other than leases or                                    
12            properties subject to (B) or (C) of this paragraph, the greater of                                           
13                           (i)  zero; or                                                                                 
14                           (ii)  35 percent multiplied by the remainder obtained by                                      
15                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
16                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
17                 deductible for the oil under AS 43.55.160(h)(4) from the gross value at                                 
18                 the point of production of the oil produced from the leases or properties                               
19                 during the month for which the installment payment is calculated;                                       
20                      (E)  for gas produced from each lease or property in the state,                                    
21            other than a lease or property subject to AS 43.55.011(p), 13 percent of the                                 
22            gross value at the point of production of the gas produced from the lease or                                 
23            property during the month for which the installment payment is calculated, but                               
24            not less than zero;                                                                                          
25                 (5) [(8)]  an amount calculated under (4)(C) [(7)(C)] of this subsection                        
26       may not exceed four percent of the gross value at the point of production of the oil and                          
27       gas produced from leases or properties subject to AS 43.55.011(p) during the month                                
28       for which the installment payment is calculated;                                                                  
29                 (6) [(9)]  for purposes of the calculation under (3)(B)(ii) [(1)(B)(ii),                        
30       (5)(B)(ii),] and (4)(A)(ii) [(7)(A)(ii)] of this subsection, the applicable percentage of                     
31       the gross value at the point of production is determined under AS 43.55.011(f)(1) - (3)                           
01       but substituting the phrase "month for which the installment payment is calculated" in                            
02       AS 43.55.011(f)(1) - (3) for the phrase "calendar year for which the tax is due";                                 
03                 (7) [(10)]  after December 31, 2016, for the purposes of a calculation                              
04       under (3) or (4) [(5) OR (7)] of this subsection, a credit under AS 43.55.024(j) may                          
05       not be applied to reduce an installment payment to less than the applicable percentage                            
06       under AS 43.55.011(f).                                                                                            
07    * Sec. 19. AS 43.55.020(g) is amended to read:                                                                     
08            (g)  Notwithstanding any contrary provision of AS 43.05.225,                                                 
09                 (1)  before January 1, 2014, an unpaid amount of an installment                                         
10       payment required under (a)(1) [(a)(1) - (3)] of this section that is not paid when due                        
11       bears interest (A) at the rate provided for an underpayment under 26 U.S.C. 6621                                  
12       (Internal Revenue Code), as amended, compounded daily, from the date the                                          
13       installment payment is due until March 31 following the calendar year of production,                              
14       and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31;                                  
15       interest accrued under (A) of this paragraph that remains unpaid after that March 31 is                           
16       treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid                          
17       amount of tax due under (a)(2) [(a)(4)] of this section that is not paid when due bears                       
18       interest as provided for a delinquent tax under AS 43.05.225;                                                     
19                 (2)  on and after January 1, 2014, an unpaid amount of an installment                                   
20       payment required under (a)(1), (3), or (4) [(a)(3), (5), (6), OR (7)] of this section that                    
21       is not paid when due bears interest (A) at the rate provided for an underpayment under                            
22       26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the                                    
23       date the installment payment is due until March 31 following the calendar year of                                 
24       production, and (B) as provided for a delinquent tax under AS 43.05.225 after that                                
25       March 31; interest accrued under (A) of this paragraph that remains unpaid after that                             
26       March 31 is treated as an addition to tax that bears interest under (B) of this paragraph;                        
27       an unpaid amount of tax due under (a)(2) [(a)(4)] of this section that is not paid when                       
28       due bears interest as provided for a delinquent tax under AS 43.05.225.                                           
29    * Sec. 20. AS 43.55.020(h) is amended to read:                                                                     
30            (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                 
31                 (1)  an overpayment of an installment payment required under (a)(1),                                
01       (3), or (4) [(a)(1), (2), (3), (5), (6), OR (7)] of this section bears interest at the rate                   
02       provided for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as                                      
03       amended, compounded daily, from the later of the date the installment payment is due                              
04       or the date the overpayment is made, until the earlier of                                                         
05                      (A)  the date it is refunded or is applied to an underpayment; or                                  
06                      (B)  March 31 following the calendar year of production;                                           
07                 (2)  except as provided under (1) of this subsection, interest with                                     
08       respect to an overpayment is allowed only on any net overpayment of the payments                                  
09       required under (a) of this section that remains after the later of March 31 following the                         
10       calendar year of production or the date that the statement required under                                         
11       AS 43.55.030(a) is filed;                                                                                         
12                 (3)  interest is allowed under (2) of this subsection only from a date that                             
13       is 90 days after the later of March 31 following the calendar year of production or the                           
14       date that the statement required under AS 43.55.030(a) is filed; interest is not allowed                          
15       if the overpayment was refunded within the 90-day period;                                                         
16                 (4)  interest under (2) and (3) of this subsection is paid at the rate and in                           
17       the manner provided in AS 43.05.225(1).                                                                           
18    * Sec. 21. AS 43.55.020(i) is amended to read:                                                                     
19            (i)  Notwithstanding any contrary provision of AS 43.05.225 or (g) or (h) of                                 
20       this section, if the amount of a tax payment, including an installment payment, due                               
21       under (a)(1) and (2) [(a)(1) - (4)] of this section is affected by the retroactive                            
22       application of a regulation adopted under this chapter, the department shall determine                            
23       whether the retroactive application of the regulation caused an underpayment or an                                
24       overpayment of the amount due and adjust the interest due on the affected payment as                              
25       follows:                                                                                                          
26                 (1)  if an underpayment of the amount due occurred, the department                                      
27       shall waive interest that would otherwise accrue for the underpayment before the first                            
28       day of the second month following the month in which the regulation became                                        
29       effective, if                                                                                                     
30                      (A)  the department determines that the producer's                                                 
31            underpayment resulted because the regulation was not in effect when the                                      
01            payment was due; and                                                                                         
02                      (B)  the producer demonstrates that it made a good faith                                           
03            estimate of its tax obligation in light of the regulations then in effect when the                           
04            payment was due and paid the estimated tax;                                                                  
05                 (2)  if an overpayment of the amount due occurred and the department                                    
06       determines that the producer's overpayment resulted because the regulation was not in                             
07       effect when the payment was due, the obligation for a refund for the overpayment does                             
08       not begin to accrue interest earlier than the following, as applicable:                                           
09                      (A)  except as otherwise provided under (B) of this paragraph,                                     
10            the first day of the second month following the month in which the regulation                                
11            became effective;                                                                                            
12                      (B)  90 days after an amended statement under AS 43.55.030(a)                                      
13            and an application to request a refund of production tax paid is filed, if the                               
14            overpayment was for a period for which an amended statement under                                            
15            AS 43.55.030(a) was required to be filed before the regulation became                                        
16            effective.                                                                                                   
17    * Sec. 22. AS 43.55.023(a) is amended to read:                                                                     
18            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
19       expenditure as follows:                                                                                           
20                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
21       deductible lease expenditure for purposes of calculating the production tax value of oil                          
22       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
23       AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or                                       
24       explorer that incurs a qualified capital expenditure may also elect to apply a tax credit                         
25       against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that                                       
26       expenditure;                                                                                                      
27                 (2)  a producer or explorer may take a credit for a qualified capital                                   
28       expenditure incurred in connection with geological or geophysical exploration or in                               
29       connection with an exploration well only if the producer or explorer                                              
30                      (A)  agrees, in writing, to the applicable provisions of                                           
31            AS 43.55.025(f)(2); and                                                                                      
01                      (B)  submits to the Department of Natural Resources all data                                       
02            that would be required to be submitted under AS 43.55.025(f)(2);                                             
03                 (3)  a credit for a qualified capital expenditure incurred to explore for,                              
04       develop, or produce oil or gas deposits located                                                                   
05                      (A)  north of 68 degrees North latitude may be taken only if the                               
06            expenditure is incurred before January 1, 2014;                                                          
07                      (B)  in the Cook Inlet sedimentary basin may be taken only                                     
08            if the expenditure is incurred before July 1, 2016.                                                      
09    * Sec. 23. AS 43.55.023(a), as amended by sec. 22 of this Act, is amended to read:                                 
10            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
11       expenditure as follows:                                                                                           
12                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
13       deductible lease expenditure for purposes of calculating the production tax value of oil                          
14       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
15       [AS 38.05.180(i), AS 41.09.010,] AS 43.20.043 [,] or AS 43.55.025, a producer or                                  
16       explorer that incurs a qualified capital expenditure may also elect to apply a tax credit                         
17       against a tax levied by AS 43.55.011(e) in the amount of 10 [20] percent of that                              
18       expenditure;                                                                                                      
19                 (2)  a producer or explorer may take a credit for a qualified capital                                   
20       expenditure incurred in connection with geological or geophysical exploration or in                               
21       connection with an exploration well only if the producer or explorer                                              
22                      (A)  agrees, in writing, to the applicable provisions of                                           
23            AS 43.55.025(f)(2); and                                                                                      
24                      (B)  submits to the Department of Natural Resources all data                                       
25            that would be required to be submitted under AS 43.55.025(f)(2);                                             
26                 (3)  a credit for a qualified capital expenditure incurred to explore for,                              
27       develop, or produce oil or gas deposits located                                                                   
28                      (A)  north of 68 degrees North latitude may be taken only if the                                 
29            expenditure is incurred before January 1, 2014;                                                              
30                      (B)  in the Cook Inlet sedimentary basin may be taken only if                                      
31            the expenditure is incurred before July 1, 2016.                                                             
01    * Sec. 24. AS 43.55.023(b) is amended to read:                                                                     
02            (b)  Before January 1, 2014, a producer or explorer may elect to take a tax                                  
03       credit in the amount of 25 percent of a carried-forward annual loss. For lease                                    
04       expenditures incurred on and after January 1, 2014, and before January 1, 2016, to                                
05       explore for, develop, or produce oil or gas deposits located north of 68 degrees North                            
06       latitude, a producer or explorer may elect to take a tax credit in the amount of 45                               
07       percent of a carried-forward annual loss. For lease expenditures incurred during                              
08       calendar year 2016 [ON AND AFTER JANUARY 1, 2016,] to explore for, develop,                                   
09       or produce oil or gas deposits located north of 68 degrees North latitude, a producer or                          
10       explorer may elect to take a tax credit in the amount of 35 percent of a carried-forward                          
11       annual loss. For lease expenditures incurred north of 68 degrees North latitude, a                            
12       producer may elect to take a tax credit in the amount of 32 percent of a carried-                             
13       forward annual loss incurred during calendar year 2017 or 2018; 29 percent of a                               
14       carried-forward annual loss incurred during calendar year 2019 or 2020; 26                                    
15       percent of a carried-forward annual loss incurred during calendar year 2021 or                                
16       2022; and 25 percent of a carried-forward annual loss incurred after calendar                                 
17       year 2022. For lease expenditures incurred on or after January 1, 2014, and before                        
18       January 1, 2018, to explore for, develop, or produce oil or gas deposits located south                        
19       of 68 degrees North latitude, a producer or explorer may elect to take a tax credit in                            
20       the amount of 25 percent of a carried-forward annual loss. For lease expenditures                             
21       incurred after December 31, 2017, to explore for, develop, or produce oil or gas                              
22       deposits located south of 68 degrees North latitude and outside of the Cook Inlet                             
23       sedimentary basin, a producer may elect to take a tax credit in the amount of 25                              
24       percent of a carried-forward annual loss. A credit under this subsection for an                               
25       expenditure incurred after December 31, 2016, is subject to the requirements of                               
26       (q) of this section. A credit under this subsection may be applied against a tax levied                       
27       by AS 43.55.011(e). For purposes of this subsection,                                                              
28                 (1)  a carried-forward annual loss is the amount of a producer's or                                 
29       explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                     
30       previous calendar year that was not deductible in calculating production tax values for                           
31       that calendar year under AS 43.55.160;                                                                        
01                 (2)  for lease expenditures incurred after December 31, 2016, any                                   
02       reduction under AS 43.55.160(f) or (g) is added back to the calculation of                                    
03       production tax values for that calendar year under AS 43.55.160 for the                                       
04       determination of a carried-forward annual loss.                                                             
05    * Sec. 25. AS 43.55.023(d) is amended to read:                                                                     
06            (d)  A person that is entitled to take a tax credit under this section that wishes                           
07       to transfer the unused credit to another person or obtain a cash payment under                                    
08       AS 43.55.028 may apply to the department for a transferable tax credit certificate. An                            
09       application under this subsection must be in a form prescribed by the department and                              
10       must include supporting information and documentation that the department                                         
11       reasonably requires. The department shall grant or deny an application, or grant an                               
12       application as to a lesser amount than that claimed and deny it as to the excess, not                             
13       later than 120 days after the latest of (1) March 31 of the year following the calendar                           
14       year in which the [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward                                              
15       annual loss for which the credit is claimed was incurred; (2) the date the statement                              
16       required under AS 43.55.030(a) or (e) was filed for the calendar year in which the                                
17       [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward annual loss for which                                          
18       the credit is claimed was incurred; or (3) the date the application was received by the                           
19       department. If, based on the information then available to it, the department is                                  
20       reasonably satisfied that the applicant is entitled to a credit, the department shall issue                       
21       the applicant a transferable tax credit certificate for the amount of the credit. A                               
22       certificate issued under this subsection does not expire.                                                         
23    * Sec. 26. AS 43.55.023(e) is amended to read:                                                                     
24            (e)  A person to which a transferable tax credit certificate is issued under (d) of                          
25       this section may transfer the certificate to another person, and a transferee may further                         
26       transfer the certificate. Subject to the limitations set out in former (a) of this section                    
27       and (b) - (d) [(a) - (d)] of this section, and notwithstanding any action the department                      
28       may take with respect to the applicant under (g) of this section, the owner of a                                  
29       certificate may apply the credit or a portion of the credit shown on the certificate only                         
30       against a tax levied by AS 43.55.011(e). However, a credit shown on a transferable tax                            
31       credit certificate may not be applied to reduce a transferee's total tax liability under                          
01       AS 43.55.011(e) for oil and gas produced during a calendar year to less than 80                                   
02       percent of the tax that would otherwise be due without applying that credit. Any                                  
03       portion of a credit not used under this subsection may be applied in a later period.                              
04    * Sec. 27. AS 43.55.023(l) is amended to read:                                                                     
05            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
06       expenditure incurred in the state [SOUTH OF 68 DEGREES NORTH LATITUDE]                                            
07       after June 30, 2010, as follows:                                                                                  
08                 (1)  notwithstanding that a well lease expenditure incurred in the state                                
09       [SOUTH OF 68 DEGREES NORTH LATITUDE] may be a deductible lease                                                    
10       expenditure for purposes of calculating the production tax value of oil and gas under                             
11       AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this section,                         
12       [AS 38.05.180(i), AS 41.09.010,] AS 43.20.043, or AS 43.55.025, a producer or                                     
13       explorer that incurs a well lease expenditure in the state [SOUTH OF 68 DEGREES                                   
14       NORTH LATITUDE] may elect to apply a tax credit against a tax levied by                                           
15       AS 43.55.011(e) in the amount of                                                                                  
16                      (A)  40 percent of that expenditure incurred south of 68                                   
17            degrees North latitude before January 1, 2017;                                                           
18                      (B)  20 percent of that expenditure incurred inside the Cook                                   
19            Inlet sedimentary basin after December 31, 2016, and before January 1,                                   
20            2018;                                                                                                    
21                      (C)  30 percent of that expenditure incurred outside the                                       
22            Cook Inlet sedimentary basin and south of 68 degrees North latitude after                                
23            December 31, 2016  [; A TAX CREDIT UNDER THIS PARAGRAPH MAY                                              
24            BE APPLIED FOR A SINGLE CALENDAR YEAR];                                                                      
25                 (2)  a producer or explorer may take a credit for a well lease                                          
26       expenditure incurred                                                                                              
27                      (A)  in the state south of 68 degrees North latitude in connection                             
28            with geological or geophysical exploration or in connection with an                                          
29            exploration well only if the producer or explorer                                                            
30                           (i) [(A)]  agrees, in writing, to the applicable provisions                               
31                 of AS 43.55.025(f)(2); and                                                                              
01                           (ii) [(B)]  submits to the Department of Natural                                          
02                 Resources all data that would be required to be submitted under                                         
03                 AS 43.55.025(f)(2);                                                                                 
04                      (B)  in the Cook Inlet sedimentary basin only if the                                           
05            producer or explorer produced oil or gas in the Cook Inlet sedimentary                                   
06            basin before January 1, 2017.                                                                            
07    * Sec. 28. AS 43.55.023 is amended by adding new subsections to read:                                              
08            (q)  For a calendar year after December 31, 2016, to qualify for a credit under                              
09       (b) of this section,                                                                                              
10                 (1)  the producer incurring the expenditure may not have an average                                     
11       daily production of more than 15,000 BTU equivalent barrels a day in the state during                             
12       the calendar year in which the expenditure is incurred;                                                           
13                 (2)  the expenditure must be incurred for a lease                                                       
14                      (A)  from which the state receives a royalty under AS 38.05 or                                     
15            federal law and in a unit under a unit plan of development approved by the                                   
16            commissioner of natural resources as consistent with AS 38.05.180 or by the                                  
17            applicable federal agency; and                                                                               
18                      (B)  in which the producer has a working interest; and                                             
19                 (3)  if the unit is in the Cook Inlet sedimentary basin, the producer                                   
20       incurring the expenditure must have produced oil or gas in the Cook Inlet sedimentary                             
21       basin before January 1, 2017.                                                                                     
22            (r)  Notwithstanding the limitation on the use of a transferable tax credit                                  
23       certificate by a transferee in (e) of this section, and subject to appropriation, the                             
24       department shall issue a cash refund to the Alaska Retirement Management Board for                                
25       a transferable tax credit certificate originally issued to a person under (d) of this                             
26       section and purchased by the Alaska Retirement Management Board under                                             
27       AS 37.10.220(b) within five years after the board's purchase of the certificate. The                              
28       refund shall be made from funds appropriated from the general fund to the department                              
29       for that purpose.                                                                                                 
30    * Sec. 29. AS 43.55.024(i) is amended to read:                                                                     
31            (i)  A producer may apply against the producer's tax liability for the calendar                              
01       year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under                                
02       AS 43.55.011(e) that receives a reduction in the gross value at the point of                                  
03       production under [MEETS ONE OR MORE OF THE CRITERIA IN]                                                       
04       AS 43.55.160(f) or (g) and that is produced during a calendar year after December 31,                             
05       2013. A tax credit authorized by this subsection may not reduce a producer's tax                                  
06       liability for a calendar year under AS 43.55.011(e) below zero.                                                   
07    * Sec. 30. AS 43.55.024(j) is amended to read:                                                                     
08            (j)  A producer may apply against the producer's tax liability for the calendar                              
09       year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for                            
10       each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in                         
11       the gross value at the point of production under [MEET ANY OF THE CRITERIA                                    
12       IN] AS 43.55.160(f) or (g) and that is produced during a calendar year after                                      
13       December 31, 2013, from leases or properties north of 68 degrees North latitude. A tax                            
14       credit under this subsection may not reduce a producer's tax liability for a calendar                             
15       year under AS 43.55.011(e) below the amount calculated under AS 43.55.011(f). The                                 
16       amount of the tax credit for a barrel of taxable oil subject to this subsection produced                          
17       during a month of the calendar year is                                                                            
18                 (1)  $8 for each barrel of taxable oil if the average gross value at the                                
19       point of production for the month is less than $80 a barrel;                                                      
20                 (2)  $7 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 $80 a barrel, but less than                         
22       $90 a barrel;                                                                                                     
23                 (3)  $6 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 $90 a barrel, but less than                         
25       $100 a barrel;                                                                                                    
26                 (4)  $5 for each barrel of taxable oil if the average gross value at the                                
27       point of production for the month is greater than or equal to $100 a barrel, but less                             
28       than $110 a barrel;                                                                                               
29                 (5)  $4 for each barrel of taxable oil if the average gross value at the                                
30       point of production for the month is greater than or equal to $110 a barrel, but less                             
31       than $120 a barrel;                                                                                               
01                 (6)  $3 for each barrel of taxable oil if the average gross value at the                                
02       point of production for the month is greater than or equal to $120 a barrel, but less                             
03       than $130 a barrel;                                                                                               
04                 (7)  $2 for each barrel of taxable oil if the average gross value at the                                
05       point of production for the month is greater than or equal to $130 a barrel, but less                             
06       than $140 a barrel;                                                                                               
07                 (8)  $1 for each barrel of taxable oil if the average gross value at the                                
08       point of production for the month is greater than or equal to $140 a barrel, but less                             
09       than $150 a barrel;                                                                                               
10                 (9)  zero if the average gross value at the point of production for the                                 
11       month is greater than or equal to $150 a barrel.                                                                  
12    * Sec. 31. AS 43.55.025(m) is amended to read:                                                                     
13            (m)  The persons that drill the first four exploration wells in the state and                                
14       within the areas described in (o) of this section on state lands, private lands, or federal                       
15       onshore lands for the purpose of discovering oil or gas that penetrate and evaluate a                             
16       prospect in a basin described in (o) of this section are eligible for a credit under (a)(6)                       
17       of this section. A credit under this subsection may not be taken for more than two                                
18       exploration wells in a single area described in (o)(1) - (6) of this section.                                     
19       Notwithstanding (b) of this section, exploration [EXPLORATION] expenditures                                   
20       eligible for the credit in this subsection must be incurred for work performed after                              
21       June 1, 2012, and before July 1, 2017, except that expenditures to complete an                                
22       exploration well that was spudded but not completed before July 1, 2017, are                                  
23       eligible for the credit under this subsection [JULY 1, 2016]. A person planning to                            
24       drill an exploration well on private land and to apply for a credit under this subsection                         
25       shall obtain written consent from the owner of the oil and gas interest for the full                              
26       public release of all well data after the expiration of the confidentiality period                                
27       applicable to information collected under (f) of this section. The written consent of the                         
28       owner of the oil and gas interest must be submitted to the commissioner of natural                                
29       resources before approval of the proposed exploration well. In addition to the                                    
30       requirements in (c)(1), (c)(2)(A), and (c)(2)(C) of this section and submission of the                            
31       written consent of the owner of the oil and gas interest, a person planning to drill an                           
01       exploration well shall obtain approval from the commissioner of natural resources                                 
02       before the well is spudded. The commissioner of natural resources shall make a                                    
03       written determination approving or rejecting an exploration well within 60 days after                             
04       receiving the request for approval or as soon as is practicable thereafter. Before                                
05       approving the exploration well, the commissioner of natural resources shall consider                              
06       the following: the location of the well; the proximity to a community in need of a local                          
07       energy source; the proximity of existing infrastructure; the experience and safety                                
08       record of the explorer in conducting operations in remote or roadless areas; the                                  
09       projected cost schedule; whether seismic mapping and seismic data sufficiently                                    
10       identify a particular trap for exploration; whether the targeted and planned depth and                            
11       range are designed to penetrate and fully evaluate the hydrocarbon potential of the                               
12       proposed prospect and reach the level below which economic hydrocarbon reservoirs                                 
13       are likely to be found, or reach 12,000 feet or more true vertical depth; and whether                             
14       the exploration plan provides for a full evaluation of the wellbore below surface casing                          
15       to the depth of the well. Whether the exploration well for which a credit is requested                            
16       under this subsection is located within an area and a basin described under (o) of this                           
17       section shall be determined by the commissioner of natural resources and reported to                              
18       the commissioner. A taxpayer that obtains a credit under this subsection may not claim                            
19       a tax credit under AS 43.55.023 or another provision in this section for the same                                 
20       exploration expenditure.                                                                                          
21    * Sec. 32. AS 43.55.025 is amended by adding a new subsection to read:                                             
22            (q)  Notwithstanding the limitation on the use of a production tax credit                                    
23       certificate by a transferee in (f) of this section, and subject to appropriation, the                             
24       department shall issue a cash refund to the Alaska Retirement Management Board for                                
25       a production tax credit certificate originally issued to an explorer under (f) of this                            
26       section and purchased by the Alaska Retirement Management Board under                                             
27       AS 37.10.220(b) within five years of the board's purchase of the certificate. The                                 
28       refund shall be made from funds appropriated from the general fund to the department                              
29       for that purpose.                                                                                                 
30    * Sec. 33. AS 43.55.028(a) is amended to read:                                                                     
31            (a)  The oil and gas tax credit fund is established as a separate fund of the state.                         
01       The purpose of the fund is to purchase transferable tax credit certificates issued under                          
02       AS 43.55.023 and production tax credit certificates issued under AS 43.55.025 and to                              
03       pay refunds and payments claimed under AS 43.20.046, 43.20.047, or 43.20.053. The                             
04       fund may not be used to purchase a transferable tax credit certificate or                                     
05       production tax credit certificate from the Alaska Retirement Management Board                                 
06       that the board purchased under AS 37.10.220(b) or to pay a refund under                                       
07       AS 43.55.023(r) or 43.55.025(q).                                                                              
08    * Sec. 34. AS 43.55.028(e) is amended to read:                                                                     
09            (e)  The department, on the written application of a person to whom a                                        
10       transferable tax credit certificate has been issued under AS 43.55.023(d) or former                               
11       AS 43.55.023(m) or to whom a production tax credit certificate has been issued under                              
12       AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                                    
13       purchase, in whole or in part, the certificate. The department may not purchase a                             
14       total of more than $70,000,000 in tax credit certificates from a person in a                                  
15       calendar year. The department may only purchase a certificate or part of a                                    
16       certificate if the department finds that                                                                      
17                 (1)  the calendar year of the purchase is not earlier than the first                                    
18       calendar year for which the credit shown on the certificate would otherwise be allowed                            
19       to be applied against a tax;                                                                                      
20                 (2)  the application is not the result of the division of a single entity                           
21       into multiple entities that would reasonably be expected to apply as a single entity                          
22       if the $70,000,000 limitation in this subsection did not exist [APPLICANT DOES                                
23       NOT HAVE AN OUTSTANDING LIABILITY TO THE STATE FOR UNPAID                                                         
24       DELINQUENT TAXES UNDER THIS TITLE];                                                                               
25                 (3)  the applicant's total tax liability under AS 43.55.011(e), after                                   
26       application of all available tax credits, for the calendar year in which the application is                       
27       made is zero;                                                                                                     
28                 (4)  the applicant's average daily production of oil and gas taxable                                    
29       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
30       the application is made was not more than 15,000 [50,000] BTU equivalent barrels;                             
31       and                                                                                                               
01                 (5)  the purchase is consistent with this section and regulations adopted                               
02       under this section.                                                                                               
03    * Sec. 35. AS 43.55.028(g) is amended to read:                                                                     
04            (g)  The department shall [MAY] adopt regulations to carry out the purposes                              
05       of this section, including standards and procedures to allocate available money among                             
06       applications for purchases under this chapter and claims for refunds and payments                                 
07       under AS 43.20.046, 43.20.047, or 43.20.053 when the total amount of the                                          
08       applications for purchase and claims for refund exceed the amount of available money                              
09       in the fund. The regulations adopted by the department, when allocating available                             
10       money in the fund under this section,                                                                         
11                 (1)  may not [, WHEN ALLOCATING AVAILABLE MONEY IN                                                  
12       THE FUND UNDER THIS SECTION,] distinguish an application for the purchase of                                      
13       a credit certificate issued under former AS 43.55.023(m) or a claim for a refund or                               
14       payment under AS 43.20.046, 43.20.047, or 43.20.053;                                                          
15                 (2)  must grant a preference, between two applicants, to the                                        
16       applicant with a higher percentage of resident workers in the applicant's                                     
17       workforce, including workers employed by the applicant's direct contractors, in                               
18       the state in the previous calendar year; in this paragraph, "resident worker" has                             
19       the meaning given in AS 43.40.092(b).                                                                         
20    * Sec. 36. AS 43.55.028 is amended by adding a new subsection to read:                                             
21            (j)  If an applicant or claimant has an outstanding liability to the state directly                          
22       related to the applicant's or claimant's oil or gas exploration, development, or                                  
23       production and the department has not previously reduced the amount paid to that                                  
24       applicant or claimant for a certificate or refund because of that outstanding liability,                          
25       the department may purchase only that portion of a certificate or pay only that portion                           
26       of a refund that exceeds the outstanding liability. The department may apply the                                  
27       amount by which the department reduced its purchase of a certificate or payment for a                             
28       refund because of an outstanding liability to satisfy the outstanding liability.                                  
29       Satisfaction of an outstanding liability under this subsection does not affect the                                
30       applicant's ability to contest that liability. The department may enter into contracts or                         
31       agreements with another department to which the outstanding liability is owed. In this                            
01       subsection, "outstanding liability" means an amount of tax, interest, penalty, fee,                               
02       rental, royalty, or other charge for which the state has issued a demand for payment                              
03       that has not been paid when due and, if contested, has not been finally resolved against                          
04       the state.                                                                                                        
05    * Sec. 37. AS 43.55.029(a) is amended to read:                                                                     
06            (a)  An explorer or producer that has applied for a production tax credit under                              
07       AS 43.55.023(a) or [,] (b), [OR (l) OR] 43.55.025(a), or former AS 43.55.023(l) may                       
08       make a present assignment of the production tax credit certificate expected to be                                 
09       issued by the department to a third-party assignee. The assignment may be made either                             
10       at the time the application is filed with the department or not later than 30 days after                          
11       the date of filing with the department. Once a notice of assignment in compliance with                            
12       this section is filed with the department, the assignment is irrevocable and cannot be                            
13       modified by the explorer or producer without the written consent of the assignee                                  
14       named in the assignment. If a production tax credit certificate is issued to the explorer                         
15       or producer, the notice of assignment remains effective and shall be filed with the                               
16       department by the explorer or producer together with any application for the                                      
17       department to purchase the certificate under AS 43.55.028(e).                                                     
18    * Sec. 38. AS 43.55.029(a), as amended by sec. 37 of this Act, is amended to read:                                 
19            (a)  An explorer or producer that has applied for a production tax credit under                              
20       AS 43.55.023(b) [AS 43.55.023(a) OR (b)], 43.55.025(a), or former AS 43.55.023(a)                         
21       or (l) [AS 43.55.023(l)] may make a present assignment of the production tax credit                           
22       certificate expected to be issued by the department to a third-party assignee. The                                
23       assignment may be made either at the time the application is filed with the department                            
24       or not later than 30 days after the date of filing with the department. Once a notice of                          
25       assignment in compliance with this section is filed with the department, the                                      
26       assignment is irrevocable and cannot be modified by the explorer or producer without                              
27       the written consent of the assignee named in the assignment. If a production tax credit                           
28       certificate is issued to the explorer or producer, the notice of assignment remains                               
29       effective and shall be filed with the department by the explorer or producer together                             
30       with any application for the department to purchase the certificate under                                         
31       AS 43.55.028(e).                                                                                                  
01    * Sec. 39. 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. 40. 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. 41. AS 43.55.150 is amended by adding a new subsection to read:                                             
14            (d)  For purposes of calculating the tax under this chapter, the gross value at                              
15       the point of production may not be less than zero.                                                                
16    * Sec. 42. AS 43.55.160(a) is amended to read:                                                                     
17            (a)  For oil and gas produced before January 1, 2022, except as provided in (b),                             
18       (f), and (g) of this section, for the purposes of                                                                 
19                 (1)  AS 43.55.011(e)(1) and (2), the annual production tax value of                                     
20       taxable oil, gas, or oil and gas produced during a calendar year in a category for which                          
21       a separate annual production tax value is required to be calculated under this                                    
22       paragraph is the gross value at the point of production of that oil, gas, or oil and gas                          
23       taxable under AS 43.55.011(e), less the producer's lease expenditures under                                       
24       AS 43.55.165 for the calendar year applicable to the oil, gas, or oil and gas in that                             
25       category produced by the producer during the calendar year, as adjusted under                                     
26       AS 43.55.170; a separate annual production tax value shall be calculated for                                      
27                      (A)  oil and gas produced from leases or properties in the state                                   
28            that include land north of 68 degrees North latitude, other than gas produced                                
29            before 2022 and used in the state;                                                                           
30                      (B)  oil and gas produced from leases or properties in the state                                   
31            outside the Cook Inlet sedimentary basin, no part of which is north of 68                                    
01            degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a)                             
02            and (b); this subparagraph does not apply to                                                                 
03                           (i)  gas produced before 2022 and used in the state; or                                       
04                           (ii)  oil and gas subject to AS 43.55.011(p);                                                 
05                      (C)  [OIL PRODUCED BEFORE 2022 FROM EACH LEASE                                                     
06            OR PROPERTY IN THE COOK INLET SEDIMENTARY BASIN;                                                             
07                      (D)  GAS PRODUCED BEFORE 2022 FROM EACH LEASE                                                      
08            OR PROPERTY IN THE COOK INLET SEDIMENTARY BASIN;                                                             
09                      (E)  GAS PRODUCED BEFORE 2022 FROM EACH LEASE                                                      
10            OR PROPERTY IN THE STATE OUTSIDE THE COOK INLET                                                              
11            SEDIMENTARY BASIN AND USED IN THE STATE, OTHER THAN GAS                                                      
12            SUBJECT TO AS 43.55.011(p);                                                                                  
13                      (F)]  oil and gas subject to AS 43.55.011(p) produced from                                         
14            leases or properties in the state;                                                                           
15                      (D) [(G)]  oil and gas produced from leases or properties in the                               
16            state no part of which is north of 68 degrees North latitude, other than oil or                              
17            gas described in (B) or [,] (C) [, (D), (E), OR (F)] of this paragraph;                                  
18                 (2)  AS 43.55.011(g), for oil and gas produced before January 1, 2014,                                  
19       the monthly production tax value of the taxable                                                                   
20                      (A)  oil and gas produced during a month from leases or                                            
21            properties in the state that include land north of 68 degrees North latitude is the                          
22            gross value at the point of production of the oil and gas taxable under                                      
23            AS 43.55.011(e) and produced by the producer from those leases or properties,                                
24            less 1/12 of the producer's lease expenditures under AS 43.55.165 for the                                    
25            calendar year applicable to the oil and gas produced by the producer from                                    
26            those leases or properties, as adjusted under AS 43.55.170; [THIS                                            
27            SUBPARAGRAPH DOES NOT APPLY TO GAS SUBJECT TO                                                                
28            AS 43.55.011(o);]                                                                                            
29                      (B)  oil and gas produced during a month from leases or                                            
30            properties in the state outside the Cook Inlet sedimentary basin, no part of                                 
31            which is north of 68 degrees North latitude, is the gross value at the point of                              
01            production of the oil and gas taxable under AS 43.55.011(e) and produced by                                  
02            the producer from those leases or properties, less 1/12 of the producer's lease                              
03            expenditures under AS 43.55.165 for the calendar year applicable to the oil and                              
04            gas produced by the producer from those leases or properties, as adjusted under                              
05            AS 43.55.170; [THIS SUBPARAGRAPH DOES NOT APPLY TO GAS                                                       
06            SUBJECT TO AS 43.55.011(o);]                                                                                 
07                      (C)  oil produced during a month from a lease or property in the                                   
08            Cook Inlet sedimentary basin is the gross value at the point of production of                                
09            the oil taxable under AS 43.55.011(e) and produced by the producer from that                                 
10            lease or property, less 1/12 of the producer's lease expenditures under                                      
11            AS 43.55.165 for the calendar year applicable to the oil produced by the                                     
12            producer from that lease or property, as adjusted under AS 43.55.170;                                        
13                      (D)  gas produced during a month from a lease or property in                                       
14            the Cook Inlet sedimentary basin is the gross value at the point of production                               
15            of the gas taxable under AS 43.55.011(e) and produced by the producer from                                   
16            that lease or property, less 1/12 of the producer's lease expenditures under                                 
17            AS 43.55.165 for the calendar year applicable to the gas produced by the                                     
18            producer from that lease or property, as adjusted under AS 43.55.170;                                        
19                      (E)  gas produced during a month from a lease or property                                          
20            outside the Cook Inlet sedimentary basin and used in the state is the gross                                  
21            value at the point of production of that gas taxable under AS 43.55.011(e) and                               
22            produced by the producer from that lease or property, less 1/12 of the                                       
23            producer's lease expenditures under AS 43.55.165 for the calendar year                                       
24            applicable to that gas produced by the producer from that lease or property, as                              
25            adjusted under AS 43.55.170.                                                                                 
26    * Sec. 43. AS 43.55.160(e) is amended to read:                                                                     
27            (e)  Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that                                   
28       would otherwise be deductible by a producer in a calendar year but whose deduction                                
29       would cause an annual production tax value calculated under (a)(1) or (h) of this                                 
30       section of taxable oil or gas produced during the calendar year to be less than zero                              
31       may be used to establish a carried-forward annual loss under AS 43.55.023(b).                                     
01       However, the department shall provide by regulation a method to ensure that, for a                                
02       period for which a producer's tax liability is limited by AS 43.55.011(p)                                     
03       [AS 43.55.011(j), (k), (o), OR (p)], any adjusted lease expenditures under                                        
04       AS 43.55.165 and 43.55.170 that would otherwise be deductible by a producer for that                              
05       period but whose deduction would cause a production tax value calculated under                                    
06       (a)(1)(C) [, (D), (E), OR (F),] or (h)(3) of this section to be less than zero are                                
07       accounted for as though the adjusted lease expenditures had first been used as                                    
08       deductions in calculating the production tax values of oil or gas subject to any of the                           
09       limitations under AS 43.55.011(p) [AS 43.55.011(j), (k), (o), OR (p)] that have                               
10       positive production tax values so as to reduce the tax liability calculated without                               
11       regard to the limitation to the maximum amount provided for under the applicable                                  
12       provision of AS 43.55.011(p) [AS 43.55.011(j), (k), (o), OR (p)]. Only the amount of                          
13       those adjusted lease expenditures remaining after the accounting provided for under                               
14       this subsection may be used to establish a carried-forward annual loss under                                      
15       AS 43.55.023(b). In this subsection, "producer" includes "explorer."                                              
16    * Sec. 44. AS 43.55.160(f) is amended to read:                                                                     
17            (f)  On and after January 1, 2014, in the calculation of an annual production tax                            
18       value of a producer under (a)(1)(A) or (h)(1) of this section, the gross value at the                             
19       point of production of oil or gas produced from a lease or property north of 68 degrees                           
20       North latitude meeting one or more of the following criteria is reduced by 20 percent:                            
21       (1) the oil or gas is produced from a lease or property that does not contain a lease that                        
22       was within a unit on January 1, 2003; (2) the oil or gas is produced from a                                       
23       participating area established after December 31, 2011, that is within a unit formed                              
24       under AS 38.05.180(p) before January 1, 2003, if the participating area does not                                  
25       contain a reservoir that had previously been in a participating area established before                           
26       December 31, 2011; (3) the oil or gas is produced from acreage that was added to an                               
27       existing participating area by the Department of Natural Resources on and after                                   
28       January 1, 2014, and the producer demonstrates to the department that the volume of                               
29       oil or gas produced is from acreage added to an existing participating area. This                                 
30       subsection does not apply to gas produced before 2022 that is used in the state or to                             
31       gas produced on and after January 1, 2022. For oil and gas first produced from a                              
01       lease or property after December 31, 2016, a reduction allowed under this                                     
02       subsection applies from the date of commencement of regular production of oil                                 
03       and gas in commercial quantities from that lease or property and expires after                                
04       three years, consecutive or nonconsecutive, in which the average annual price per                             
05       barrel for Alaska North Slope crude oil for sale on the United States West Coast                              
06       is more than $70 or after seven years, whichever occurs first.  For oil and gas first                         
07       produced from a lease or property before January 1, 2017, a reduction allowed                                 
08       under this subsection expires on the earlier of January 1, 2023, or January 1                                 
09       following three years, consecutive or nonconsecutive, in which the average annual                             
10       price per barrel for Alaska North Slope crude oil for sale on the United States                               
11       West Coast is more than $70. A reduction under this subsection may not reduce the                             
12       gross value at the point of production below zero. In this subsection, "participating                             
13       area" means a reservoir or portion of a reservoir producing or contributing to                                    
14       production as approved by the Department of Natural Resources.                                                    
15    * Sec. 45. AS 43.55.160(g) is amended to read:                                                                     
16            (g)  On and after January 1, 2014, in addition to the reduction under (f) of this                            
17       section, in the calculation of an annual production tax value of a producer under                                 
18       (a)(1)(A) or (h)(1) of this section, the gross value at the point of production of oil or                         
19       gas produced from a lease or property north of 68 degrees North latitude that does not                            
20       contain a lease that was within a unit on January 1, 2003, is reduced by 10 percent if                            
21       the oil or gas is produced from a unit made up solely of leases that have a royalty                               
22       share of more than 12.5 percent in amount or value of the production removed or sold                              
23       from the lease as determined under AS 38.05.180(f). This subsection does not apply if                             
24       the royalty obligation for one or more of the leases in the unit has been reduced to 12.5                         
25       percent or less under AS 38.05.180(j) for all or part of the calendar year for which the                          
26       annual production tax value is calculated. This subsection does not apply to gas                                  
27       produced before 2022 that is used in the state or to gas produced on and after                                    
28       January 1, 2022. For oil or gas first produced after December 31, 2016, the                                   
29       reduction under this subsection shall apply to oil or gas produced from a lease or                            
30       property for the first five years after the commencement of production in                                     
31       commercial quantities of oil or gas from that lease or property. For oil or gas first                         
01       produced before January 1, 2017, the reduction under this subsection for a lease                              
02       or property shall expire January 1, 2021. A reduction under this subsection may not                           
03       reduce the gross value at the point of production below zero.                                                     
04    * Sec. 46. AS 43.55.165(a) is amended to read:                                                                     
05            (a)  For [EXCEPT AS PROVIDED IN (j) AND (k) OF THIS SECTION,                                             
06       FOR] purposes of this chapter, a producer's lease expenditures for a calendar year are                            
07                 (1)  costs, other than items listed in (e) of this section, that are                                    
08                      (A)  incurred by the producer during the calendar year after                                       
09            March 31, 2006, to explore for, develop, or produce oil or gas deposits located                              
10            within the producer's leases or properties in the state or, in the case of land in                           
11            which the producer does not own an operating right, operating interest, or                                   
12            working interest, to explore for oil or gas deposits within other land in the                                
13            state; and                                                                                                   
14                      (B)  allowed by the department by regulation, based on the                                         
15            department's determination that the costs satisfy the following three                                        
16            requirements:                                                                                                
17                           (i)  the costs must be incurred upstream of the point of                                      
18                 production of oil and gas;                                                                              
19                           (ii)  the costs must be ordinary and necessary costs of                                       
20                 exploring for, developing, or producing, as applicable, oil or gas                                      
21                 deposits; and                                                                                           
22                           (iii)  the costs must be direct costs of exploring for,                                       
23                 developing, or producing, as applicable, oil or gas deposits; and                                       
24                 (2)  a reasonable allowance for that calendar year, as determined under                                 
25       regulations adopted by the department, for overhead expenses that are directly related                            
26       to exploring for, developing, or producing, as applicable, the oil or gas deposits.                               
27    * Sec. 47. AS 43.55.165(e) is amended to read:                                                                     
28            (e)  For purposes of this section, lease expenditures do not include                                         
29                 (1)  depreciation, depletion, or amortization;                                                          
30                 (2)  oil or gas royalty payments, production payments, lease profit                                     
31       shares, or other payments or distributions of a share of oil or gas production, profit, or                        
01       revenue, except that a producer's lease expenditures applicable to oil and gas produced                           
02       from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net                             
03       profit paid to the state under that lease;                                                                        
04                 (3)  taxes based on or measured by net income;                                                          
05                 (4)  interest or other financing charges or costs of raising equity or debt                             
06       capital;                                                                                                          
07                 (5)  acquisition costs for a lease or property or exploration license;                                  
08                 (6)  costs arising from fraud, wilful misconduct, gross negligence,                                     
09       violation of law, or failure to comply with an obligation under a lease, permit, or                               
10       license issued by the state or federal government;                                                                
11                 (7)  fines or penalties imposed by law;                                                                 
12                 (8)  costs of arbitration, litigation, or other dispute resolution activities                           
13       that involve the state or concern the rights or obligations among owners of interests in,                         
14       or rights to production from, one or more leases or properties or a unit;                                         
15                 (9)  costs incurred in organizing a partnership, joint venture, or other                                
16       business entity or arrangement;                                                                                   
17                 (10)  amounts paid to indemnify the state; the exclusion provided by                                    
18       this paragraph does not apply to the costs of obtaining insurance or a surety bond from                           
19       a third-party insurer or surety;                                                                                  
20                 (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                
21                 (12)  an expenditure otherwise deductible under (b) of this section that                                
22       is a result of an internal transfer, a transaction with an affiliate, or a transaction                            
23       between related parties, or is otherwise not an arm's length transaction, unless the                              
24       producer establishes to the satisfaction of the department that the amount of the                                 
25       expenditure does not exceed the fair market value of the expenditure;                                             
26                 (13)  an expenditure incurred to purchase an interest in any corporation,                               
27       partnership, limited liability company, business trust, or any other business entity,                             
28       whether or not the transaction is treated as an asset sale for federal income tax                                 
29       purposes;                                                                                                         
30                 (14)  a tax levied under AS 43.55.011 or 43.55.014;                                                     
31                 (15)  costs incurred for dismantlement, removal, surrender, or                                          
01       abandonment of a facility, pipeline, well pad, platform, or other structure, or for the                           
02       restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in                       
03       conjunction with dismantlement, removal, surrender, or abandonment; a cost is not                                 
04       excluded under this paragraph if the dismantlement, removal, surrender, or                                        
05       abandonment for which the cost is incurred is undertaken for the purpose of replacing,                            
06       renovating, or improving the facility, pipeline, well pad, platform, or other structure;                          
07                 (16)  costs incurred for containment, control, cleanup, or removal in                                   
08       connection with any unpermitted release of oil or a hazardous substance and any                                   
09       liability for damages imposed on the producer or explorer for that unpermitted release;                           
10       this paragraph does not apply to the cost of developing and maintaining an oil                                    
11       discharge prevention and contingency plan under AS 46.04.030;                                                     
12                 (17)  costs incurred to satisfy a work commitment under an exploration                                  
13       license under AS 38.05.132;                                                                                       
14                 (18)  that portion of expenditures, that would otherwise be qualified                                   
15       capital expenditures, [AS DEFINED IN AS 43.55.023,] incurred during a calendar                                    
16       year that are less than the product of $0.30 multiplied by the total taxable production                           
17       from each lease or property, in BTU equivalent barrels, during that calendar year,                                
18       except that, when a portion of a calendar year is subject to this provision, the                                  
19       expenditures and volumes shall be prorated within that calendar year;                                             
20                 (19)  costs incurred for repair, replacement, or deferred maintenance of                                
21       a facility, a pipeline, a structure, or equipment, other than a well, that results in or is                       
22       undertaken in response to a failure, problem, or event that results in an unscheduled                             
23       interruption of, or reduction in the rate of, oil or gas production; or costs incurred for                        
24       repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or                           
25       equipment, other than a well, that is undertaken in response to, or is otherwise                                  
26       associated with, an unpermitted release of a hazardous substance or of gas; however,                              
27       costs under this paragraph that would otherwise constitute lease expenditures under (a)                           
28       and (b) of this section may be treated as lease expenditures if the department                                    
29       determines that the repair or replacement is solely necessitated by an act of war, by an                          
30       unanticipated grave natural disaster or other natural phenomenon of an exceptional,                               
31       inevitable, and irresistible character, the effects of which could not have been                                  
01       prevented or avoided by the exercise of due care or foresight, or by an intentional or                            
02       negligent act or omission of a third party, other than a party or its agents in privity of                        
03       contract with, or employed by, the producer or an operator acting for the producer, but                           
04       only if the producer or operator, as applicable, exercised due care in operating and                              
05       maintaining the facility, pipeline, structure, or equipment, and took reasonable                                  
06       precautions against the act or omission of the third party and against the consequences                           
07       of the act or omission; in this paragraph,                                                                        
08                      (A)  "costs incurred for repair, replacement, or deferred                                          
09            maintenance of a facility, a pipeline, a structure, or equipment" includes costs                             
10            to dismantle and remove the facility, pipeline, structure, or equipment that is                              
11            being replaced;                                                                                              
12                      (B)  "hazardous substance" has the meaning given in                                                
13            AS 46.03.826;                                                                                                
14                      (C)  "replacement" includes renovation or improvement;                                             
15                 (20)  costs incurred to construct, acquire, or operate a refinery or crude                              
16       oil topping plant, regardless of whether the products of the refinery or topping plant                            
17       are used in oil or gas exploration, development, or production operations; however, if                            
18       a producer owns a refinery or crude oil topping plant that is located on or near the                              
19       premises of the producer's lease or property in the state and that processes the                                  
20       producer's oil produced from that lease or property into a product that the producer                              
21       uses in the operation of the lease or property in drilling for or producing oil or gas, the                       
22       producer's lease expenditures include the amount calculated by subtracting from the                               
23       fair market value of the product used the prevailing value, as determined under                                   
24       AS 43.55.020(f), of the oil that is processed;                                                                    
25                 (21)  costs of lobbying, public relations, public relations advertising, or                             
26       policy advocacy.                                                                                                  
27    * Sec. 48. AS 43.55.165(f) is amended to read:                                                                     
28            (f)  For purposes of AS 43.55.023(a) [AND (b)] and only as to expenditures                                   
29       incurred to explore for an oil or gas deposit located within land in which an explorer                            
30       does not own a working interest, the term "producer" in this section includes                                     
31       "explorer." For purposes of AS 43.55.023(b), for expenditures incurred before                                 
01       January 1, 2017, to explore for an oil or gas deposit located within land in which                            
02       an explorer does not own a working interest, the term "producer" in this section                              
03       includes "explorer."                                                                                          
04    * Sec. 49. AS 43.55.165(f), as amended by sec. 48 of this Act, is amended to read:                                 
05            (f)  [FOR PURPOSES OF AS 43.55.023(a) AND ONLY AS TO                                                         
06       EXPENDITURES INCURRED TO EXPLORE FOR AN OIL OR GAS DEPOSIT                                                        
07       LOCATED WITHIN LAND IN WHICH AN EXPLORER DOES NOT OWN A                                                           
08       WORKING INTEREST, THE TERM "PRODUCER" IN THIS SECTION                                                             
09       INCLUDES "EXPLORER."] For purposes of AS 43.55.023(b), for expenditures                                           
10       incurred before January 1, 2017, to explore for an oil or gas deposit located within                              
11       land in which an explorer does not own a working interest, the term "producer" in this                            
12       section includes "explorer."                                                                                      
13    * Sec. 50. AS 43.55.165(h) is amended to read:                                                                     
14            (h)  The department shall adopt regulations that provide for reasonable                                      
15       methods of allocating costs between oil and gas [, BETWEEN GAS SUBJECT TO                                         
16       AS 43.55.011(o) AND OTHER GAS,] and between leases or properties in those                                         
17       circumstances where an allocation of costs is required to determine lease expenditures                            
18       that are costs of exploring for, developing, or producing oil deposits or costs of                                
19       exploring for, developing, or producing gas deposits, or that are costs of exploring for,                         
20       developing, or producing oil or gas deposits located within different leases or                                   
21       properties.                                                                                                       
22    * Sec. 51. AS 43.55.170(c) is amended to read:                                                                     
23            (c)  For purposes of AS 43.55.023(a) [AND (b)] and only as to expenditures                                   
24       incurred to explore for an oil or gas deposit located within land in which an explorer                            
25       does not own a working interest, the term "producer" in this section includes                                     
26       "explorer." For purposes of AS 43.55.023(b), for expenditures incurred before                                 
27       January 1, 2017, to explore for an oil or gas deposit located within land in which                            
28       an explorer does not own a working interest, the term "producer" in this section                              
29       includes "explorer."                                                                                          
30    * Sec. 52. AS 43.55.170(c), as amended by sec. 51 of this Act, is amended to read:                                 
31            (c)  [FOR PURPOSES OF AS 43.55.023(a) AND ONLY AS TO                                                         
01       EXPENDITURES INCURRED TO EXPLORE FOR AN OIL OR GAS DEPOSIT                                                        
02       LOCATED WITHIN LAND IN WHICH AN EXPLORER DOES NOT OWN A                                                           
03       WORKING INTEREST, THE TERM "PRODUCER" IN THIS SECTION                                                             
04       INCLUDES "EXPLORER."] For purposes of AS 43.55.023(b), for expenditures                                           
05       incurred before January 1, 2017, to explore for an oil or gas deposit located within                              
06       land in which an explorer does not own a working interest, the term "producer" in this                            
07       section includes "explorer."                                                                                      
08    * Sec. 53. AS 43.55.890 is amended to read:                                                                        
09            Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary                                
10       provision of AS 40.25.100, and regardless of whether the information is considered                                
11       under AS 43.05.230(e) to constitute statistics classified to prevent the identification of                        
12       particular returns or reports, the department may publish the following information                               
13       under this chapter, if aggregated among three or more producers or explorers, showing                             
14       by month or calendar year and by lease or property, unit, or area of the state:                                   
15                 (1)  the amount of oil or gas production;                                                               
16                 (2)  the amount of taxes levied under this chapter or paid under this                                   
17       chapter;                                                                                                          
18                 (3)  the effective tax rates under this chapter;                                                        
19                 (4)  the gross value of oil or gas at the point of production;                                          
20                 (5)  the transportation costs for oil or gas;                                                           
21                 (6)  qualified capital expenditures [, AS DEFINED IN AS 43.55.023];                                     
22                 (7)  exploration expenditures under AS 43.55.025;                                                       
23                 (8)  production tax values of oil or gas under AS 43.55.160;                                            
24                 (9)  lease expenditures under AS 43.55.165;                                                             
25                 (10)  adjustments to lease expenditures under AS 43.55.170;                                             
26                 (11)  tax credits applicable or potentially applicable against taxes levied                             
27       by this chapter.                                                                                                  
28    * Sec. 54. AS 43.55.895(b) is amended to read:                                                                     
29            (b)  A municipal entity subject to taxation because of this section                                          
30                 (1)  is eligible for [ALL] tax credits proportionate to its production                          
31       taxable under AS 43.55.011(e); and                                                                            
01                 (2)  shall allocate its lease expenditures in proportion to its                                     
02       production taxable under AS 43.55.011(e) [UNDER THIS CHAPTER TO THE                                           
03       SAME EXTENT AS ANY OTHER PRODUCER].                                                                               
04    * Sec. 55. AS 43.55.900 is amended by adding a new paragraph to read:                                              
05                 (26)  "qualified capital expenditure"                                                                   
06                      (A)  means, except as otherwise provided in (B) of this                                            
07            paragraph, an expenditure that is a lease expenditure under AS 43.55.165 and                                 
08            is                                                                                                           
09                           (i)  incurred for geological or geophysical exploration;                                      
10                           (ii)  treated as a capitalized expenditure under 26 U.S.C.                                    
11                 (Internal Revenue Code), as amended, regardless of elections made                                       
12                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
13                 treated as a capitalized expenditure for federal income tax reporting                                   
14                 purposes by the person incurring the expenditure; or                                                    
15                           (iii)  treated as a capitalized expenditure under 26 U.S.C.                                   
16                 (Internal Revenue Code), as amended, regardless of elections made                                       
17                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
18                 eligible to be deducted as an expense under 26 U.S.C. 263(c) (Internal                                  
19                 Revenue Code), as amended;                                                                              
20                      (B)  does not include an expenditure incurred to acquire an asset                                  
21            the cost of previously acquiring which was a lease expenditure under                                         
22            AS 43.55.165 or would have been a lease expenditure under AS 43.55.165 if it                                 
23            had been incurred after March 31, 2006, or that has previously been placed in                                
24            service in the state; an expenditure to acquire an asset is not excluded under                               
25            this subparagraph if not more than an immaterial portion of the asset meets a                                
26            description under this subparagraph; for purposes of this subparagraph, "asset"                              
27            includes geological, geophysical, and well data and interpretations.                                         
28    * Sec. 56. AS 43.70 is amended by adding new sections to read:                                                     
29            Sec. 43.70.025. Bond or cash deposit required for an oil or gas business. (a)                              
30       At the time of applying for a license under this chapter, an applicant engaged in the                             
31       business of oil or gas exploration, development, or production shall file a surety bond                           
01       in the amount of $250,000 running to the state, conditioned upon the applicant's                                  
02       promise to pay all                                                                                                
03                 (1)  taxes and contributions due the state and political subdivisions; and                              
04                 (2)  unsecured creditors furnishing labor or material or renting or                                     
05       supplying equipment to the applicant.                                                                             
06            (b)  In lieu of the surety bond required under this section, the applicant may                               
07       file with the commissioner a cash deposit or other negotiable security acceptable to the                          
08       commissioner in the amount of $250,000.                                                                           
09            (c)  The bond required by this section remains in effect until cancelled by                                  
10       action of the surety, the principal, or, if the commissioner finds that the business is                           
11       producing oil or gas in commercial quantities, by the commissioner.                                               
12            Sec. 43.70.028. Claims against an oil or gas business. (a) A person having a                               
13       claim against a person required to file a surety bond under AS 43.70.025 because of                               
14       the failure to pay a liability described in AS 43.70.025(a) may bring suit upon the                               
15       bond. A copy of the complaint shall be served by registered or certified mail on the                              
16       commissioner at the time suit is filed, and the commissioner shall maintain a record,                             
17       available for public inspection, of all suits commenced. This service on the                                      
18       commissioner shall constitute service on the surety, and the commissioner shall                                   
19       transmit the complaint or a copy of it to the surety within 72 hours after it is received.                        
20       The surety on the bond is not liable in an aggregate amount in excess of that named in                            
21       the bond, but, if claims pending at any one time exceed the amount of the bond, the                               
22       claims shall be satisfied from the bond in the following order:                                                   
23                 (1)  material, equipment, and supplies delivered in the state by an                                     
24       unsecured creditor;                                                                                               
25                 (2)  labor, including employee benefits provided by an unsecured                                        
26       creditor;                                                                                                         
27                 (3)  taxes and other amounts due to the city and borough, in that order;                                
28                 (4)  repair of public facilities;                                                                       
29                 (5)  taxes and other amounts due to the state.                                                          
30            (b)  If a judgment is entered against a cash deposit, the commissioner, upon                                 
31       receipt of a certified copy of a final judgment, shall pay the judgment from the amount                           
01       of the deposit in accordance with the priorities set out in (a) of this section.                                  
02            (c)  An action described in (a) of this section may not be commenced on the                                  
03       bond more than three years after the bond's cancellation.                                                         
04    * Sec. 57. AS 38.05.180(i); AS 41.09.010, 41.09.020, 41.09.030, 41.09.090; and                                     
05 AS 43.20.053(j)(4) are repealed January 1, 2017.                                                                        
06    * Sec. 58.  AS 43.55.011(j), 43.55.011(k), 43.55.011(m), 43.55.011(o), 43.55.023(l), and                           
07 43.55.023(n) are repealed January 1, 2019.                                                                            
08    * Sec. 59. AS 43.55.023(a), 43.55.023(o), 43.55.028(i), 43.55.075(d)(1), 43.55.165(j), and                         
09 43.55.165(k) are repealed January 1, 2022.                                                                              
10    * Sec. 60. The uncodified law of the State of Alaska is amended by adding a new section to                         
11 read:                                                                                                                   
12       LEGISLATIVE WORKING GROUP. (a) A legislative working group is established                                         
13 to analyze the Cook Inlet fiscal regime for oil and gas, review the state's tax structure and                           
14 rates on oil and gas produced south of 68 degrees North latitude, recommend changes to the                              
15 legislature for consideration during the First Regular Session of the Thirtieth Alaska State                            
16 Legislature, and develop terms for a comprehensive fiscal regime, including                                             
17            (1)  a tax structure that accounts for the unique circumstances for each oil and                             
18 gas producing area south of 68 degrees North latitude;                                                                  
19            (2)  incentives other than direct monetary support from the state for the                                    
20 exploration, development, and production of oil and gas south of 68 degrees North latitude;                             
21            (3)  consideration of the competitiveness of the area south of 68 degrees North                              
22 latitude to attract new oil and gas development;                                                                        
23            (4)  consideration of the unique market considerations of the Cook Inlet                                     
24 sedimentary basin and the need to support energy supply security for communities in                                     
25 Southcentral Alaska;                                                                                                    
26            (5)  alternative means of state support for the exploration, development, and                                
27 production of oil and gas in the Cook Inlet sedimentary basin, including loan guarantees or                             
28 other financial support through the Alaska Industrial Development and Export Authority, or                              
29 other state corporation or entity;                                                                                      
30            (6) the applicability of the recommended tax structure to gas currently subject                              
31 to AS 43.55.011(o).                                                                                                     
01       (b)  The recommended changes under (a) of this section may not include refundable or                              
02 deductible tax credits or carried-forward lease expenditures.                                                           
03       (c) The working group consists of                                                                                 
04            (1) two co-chairs, one of whom is a member of the house of representatives                                   
05 appointed by the speaker of the house of representatives, and one of whom is a member of the                            
06 senate appointed by the president of the senate; and                                                                    
07            (2) members appointed by the co-chairs; members must be legislators and must                                 
08 include members of the majority and minority caucuses.                                                                  
09       (d) The co-chairs of the working group may form an advisory group to the working                                  
10 group, composed of members who are not legislators and who have expertise and skills to                                 
11 assist in the review and development of a new plan for the tax structure and rates on oil and                           
12 gas produced south of 68 degrees North latitude. The members of an advisory group may                                   
13 include commissioners or employees of state departments, members of the oil and gas                                     
14 industry or trade associations, and economists.                                                                         
15       (e) The working group may be supported by legislative consultants under contract                                  
16 through the Legislative Budget and Audit Committee.                                                                     
17    * Sec. 61. The uncodified law of the State of Alaska is amended by adding a new section to                         
18 read:                                                                                                                   
19       APPLICABILITY. AS 43.20.046(e), as amended by sec. 10 of this Act,                                                
20 AS 43.20.047(e), as amended by sec. 11 of this Act, AS 43.20.053(e), as amended by sec. 12                              
21 of this Act, AS 43.55.028(e), as amended by sec. 34 of this Act, AS 43.55.028(j), added by                              
22 sec. 36 of this Act, and regulations related to a tax credit certificate purchase preference for                        
23 applicants with a workforce of resident workers, adopted under AS 43.55.028(g), as amended                              
24 by sec. 35 of this Act, apply to a purchase applied for on or after the effective date of secs. 10                      
25 - 12 and 34 - 36 of this Act.                                                                                           
26    * Sec. 62. The uncodified law of the State of Alaska is amended by adding a new section to                         
27 read:                                                                                                                   
28       TRANSITION: WELL LEASE EXPENDITURES. (a) Notwithstanding the repeal of                                            
29 AS 43.55.023(l) and (n) by sec. 58 of this Act, and the amendment to AS 43.55.029(a) by sec.                            
30 37 of this Act, a taxpayer who incurs a well lease expenditure before the repeal of                                     
31 AS 43.55.023(l) and (n) by sec. 58 of this Act that qualifies for a well lease expenditure credit                       
01 under AS 43.55.023(l) may apply for a credit or transferable tax credit certificate under                               
02 AS 43.55.023 and assign the tax credit under AS 43.55.029, as those sections read on the day                            
03 before the repeal of AS 43.55.023(l) and (n) by sec. 58 of this Act.                                                    
04       (b) The Department of Revenue may continue to apply and enforce AS 43.55.023(l),                                  
05 as that section read on the day before the repeal of AS 43.55.023(l) by sec. 58 of this Act, for                        
06 well lease expenditures incurred before the repeal of AS 43.55.023(l) by sec. 58 of this Act.                           
07    * Sec. 63. The uncodified law of the State of Alaska is amended by adding a new section to                         
08 read:                                                                                                                   
09       TRANSITION: QUALIFIED CAPITAL EXPENDITURES. (a) Notwithstanding the                                               
10 repeal of AS 43.55.023(a) and (o) by sec. 59 of this Act, and the amendments to                                         
11 AS 45.55.023(d) by sec. 25 of this Act, AS 43.55.029(a) by sec. 38 of this Act,                                         
12 AS 43.55.030(a) and (e) by secs. 39 and 40 of this Act, AS 43.55.165(f) by sec. 49 of this Act,                         
13 and AS 43.55.170(c) by sec. 52 of this Act, a taxpayer who incurs a qualified capital                                   
14 expenditure before the repeal of AS 43.55.023(a) and (o) by sec. 59 of this Act that qualifies                          
15 for a qualified capital expenditure credit under AS 43.55.023(a) may apply for a credit or tax                          
16 credit certificate under AS 43.55.023(d) and, as applicable, assign the tax credit under                                
17 AS 43.55.029, as those sections read on the day before the repeal of AS 43.55.023(a) by sec.                            
18 59 of this Act.                                                                                                         
19       (b) The Department of Revenue may continue to apply and enforce AS 43.55.023(a)                                   
20 and (o) and 43.55.029, as those sections read on the day before the repeal of AS 43.55.023(a)                           
21 by sec. 59 of this Act, for qualified capital expenditures incurred before the repeal of                                
22 AS 43.55.023(a) by sec. 59 of this Act.                                                                                 
23    * Sec. 64. The uncodified law of the State of Alaska is amended by adding a new section to                         
24 read:                                                                                                                   
25       TRANSITION: LEASE EXPENDITURES FOR A CALENDAR YEAR AFTER                                                          
26 2006 AND BEFORE 2010. Notwithstanding AS 43.55.165(a), as amended by sec. 46 of this                                    
27 Act, and the repeal of AS 43.55.165(j) and (k) by sec. 59 of this Act, AS 43.55.165(j) and (k)                          
28 apply to a producer's total lease expenditures for a calendar year after 2006 and before 2010                           
29 under AS 43.55.165, as that section read on the day before the repeal of AS 43.55.165(j) and                            
30 (k) by sec. 59 of this Act.                                                                                             
31    * Sec. 65. The uncodified law of the State of Alaska is amended by adding a new section to                         
01 read:                                                                                                                   
02       TRANSITION: PAYMENT OF TAX; FILING. (a) Notwithstanding the amendments                                            
03 to AS 43.55.020 by secs. 18 - 21 of this Act,                                                                           
04            (1) a person subject to tax under AS 43.55 that is required to make one or more                              
05 installment payments of estimated tax or other payments of tax under AS 43.55.020 for                                   
06 production before the effective date of secs. 18 - 21 of this Act shall pay the tax under                               
07 AS 43.55.020, as that section read on the day before the effective date of secs. 18 - 21 of this                        
08 Act;                                                                                                                    
09            (2) an unpaid amount of an installment payment required under AS 43.55.020                                   
10 for production before the effective date of secs. 18 - 21 of this Act that is not paid when due                         
11 bears interest under AS 43.55.020, as that section read on the day before the effective date of                         
12 secs. 18 - 21 of this Act;                                                                                              
13            (3) an overpayment of an installment payment required under AS 43.55.020 for                                 
14 production before the effective date of secs. 18 - 21 of this Act bears interest under                                  
15 AS 43.55.020, as that section read on the day before the effective date of secs. 18 - 21 of this                        
16 Act.                                                                                                                    
17       (b) The Department of Revenue may continue to apply and enforce AS 43.55.020, as                                  
18 that section read on the day before the effective date of secs. 18 - 21 of this Act, for a tax or                       
19 installment payment for production before the effective date of secs. 18 - 21 of this Act.                              
20    * Sec. 66. The uncodified law of the State of Alaska is amended by adding a new section to                         
21 read:                                                                                                                   
22       TRANSITION: PRODUCTION TAX AND CARRIED-FORWARD ANNUAL                                                             
23 LOSSES. Notwithstanding the repeal of AS 43.55.011(j), (k), (m), and (o) by sec. 58 of this                             
24 Act, and the amendments to AS 43.55.011(e) and (f) by secs. 13 and 15 of this Act,                                      
25 43.55.160(a) and (e) by secs. 42 and 43 of this Act, and 43.55.165(h) by sec. 50 of this Act,                           
26            (1) for oil and gas produced before the repeal of AS 43.55.011(j), (k), (m), and                             
27 (o) by sec. 58 of this Act, the production tax and production tax value of that oil and gas shall                       
28 be determined under AS 43.55.011 and 43.55.160, as those sections read on the day before the                            
29 repeal of AS 43.55.011(j), (k), (m), and (o) by sec. 58 of this Act;                                                    
30            (2) in determining lease expenditures incurred before the effective date of sec.                             
31 50 of this Act, the Department of Revenue shall continue to apply regulations that were                                 
01 adopted under AS 43.55.165(h) that were in effect on the day before the effective date of sec.                          
02 50 of this Act; and                                                                                                     
03            (3) a lease expenditure incurred before the effective date of sec. 43 of this Act                            
04 may be used to establish a carried-forward annual loss under AS 43.55.160(e), as that                                   
05 subsection read on the day before the effective date of sec. 43 of this Act.                                            
06    * Sec. 67. The uncodified law of the State of Alaska is amended by adding a new section to                         
07 read:                                                                                                                   
08       TRANSITION: REGULATIONS. The Department of Revenue and the Department of                                          
09 Natural Resources may adopt regulations necessary to implement the changes made by this                                 
10 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not                                 
11 before the effective date of the law implemented by the regulation. The Department of                                   
12 Revenue shall adopt regulations governing the use of tax credits under AS 43.55 for a                                   
13 calendar year for which the applicable tax credit provisions of AS 43.55 differ as between                              
14 parts of the year as a result of this Act.                                                                              
15    * Sec. 68. The uncodified law of the State of Alaska is amended by adding a new section to                         
16 read:                                                                                                                   
17       TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any                                                     
18 contrary provision of AS 44.62.240,                                                                                     
19            (1) if the Department of Revenue expressly designates in a regulation that the                               
20 regulation applies retroactively, a regulation adopted by the Department of Revenue to                                  
21 implement, interpret, make specific, or otherwise carry out this Act may apply retroactively to                         
22 the effective date of the law implemented by the regulation;                                                            
23            (2) if the Department of Natural Resources expressly designates in the                                       
24 regulation that the regulation applies retroactively, a regulation adopted by the Department of                         
25 Natural Resources to implement, interpret, make specific, or otherwise carry out the statutory                          
26 amendments in this Act affecting the administration of oil and gas leases issued under                                  
27 AS 38.05.180(f)(3)(B), (D), or (E), to the extent the regulation relates to the treatment of oil                        
28 and gas production taxes in determining net profits under those leases, may apply                                       
29 retroactively to the effective date of the law implemented by the regulation.                                           
30    * Sec. 69. Sections 31, 60, 67, and 68 of this Act take effect immediately under                                   
31 AS 01.10.070(c).                                                                                                        
01    * Sec. 70. Section 22 of this Act takes effect July 1, 2016.                                                       
02    * Sec. 71. Sections 13, 15, 18 - 21, 37, 42, 43, 50, 58, 62, 65, and 66 of this Act take effect                    
03 January 1, 2019.                                                                                                        
04    * Sec. 72. Sections 25, 26, 38 - 40, 46, 47, 49, 52, 53, 55, 59, 63, and 64 of this Act take                       
05 effect January 1, 2022.                                                                                                 
06    * Sec. 73. Except as provided in secs. 69 - 72 of this Act, this Act takes effect January 1,                       
07 2017.