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SCS 2d CSHB 247(FIN): "An Act relating to the exploration incentive credits; relating to the powers and duties of the Alaska Oil and Gas Conservation Commission; relating to interest applicable to delinquent tax; relating to the oil and gas production tax, tax payments, and credits; relating to tax credit certificates; 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 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; and providing for an effective date."

00               SENATE CS FOR 2d CS FOR HOUSE BILL NO. 247(FIN)                                                           
01 "An Act relating to the exploration incentive credits; relating to the powers and duties                                
02 of the Alaska Oil and Gas Conservation Commission; relating to interest applicable to                                   
03 delinquent tax; relating to the oil and gas production tax, tax payments, and credits;                                  
04 relating to tax credit certificates; relating to refunds for the gas storage facility tax                               
05 credit, the liquefied natural gas storage facility tax credit, and the qualified in-state oil                           
06 refinery infrastructure expenditures tax credit; relating to oil and gas lease expenditures                             
07 and production tax credits for municipal entities; requiring a bond or cash deposit with                                
08 a business license application for an oil or gas business; and providing for an effective                               
09 date."                                                                                                                  
10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
11    * Section 1. AS 31.05.030 is amended by adding a new subsection to read:                                           
12            (n)  Upon request of the commissioner of revenue, the commission shall                                       
01                 (1)  verify regular production for the purposes of AS 43.55.023(b) and                                  
02       (l); and                                                                                                          
03                 (2)  determine the commencement of regular production from a lease or                                   
04       property for purposes of AS 43.55.160(f) and (g).                                                               
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)  under this title, before January 1, 2014, bears interest in                               
28            each calendar quarter at the rate of five percentage points above the annual rate                            
29            charged member banks for advances by the 12th Federal Reserve District as of                                 
30            the first day of that calendar quarter, or at the annual rate of 11 percent,                                 
31            whichever is greater, compounded quarterly as of the last day of that quarter;                               
01            [OR]                                                                                                         
02                      (B)  under this title, on and after January 1, 2014, except as                             
03            provided in (C) of this paragraph, bears interest in each calendar quarter at                            
04            the rate of three percentage points above the annual rate charged member                                     
05            banks for advances by the 12th Federal Reserve District as of the first day of                               
06            that calendar quarter;                                                                                   
07                      (C)  under AS 43.55, on and after January 1, 2017,                                             
08                           (i)  for the first three years after a tax becomes                                        
09                 delinquent, bears interest in each calendar quarter at the rate of                                  
10                 seven percentage points above the annual rate charged member                                        
11                 banks for advances by the 12th Federal Reserve District as of the                                   
12                 first day of that calendar quarter, compounded quarterly as of the                                  
13                 last day of that quarter; and                                                                       
14                           (ii)  after the first three years after a tax becomes                                     
15                 delinquent, does not bear interest;                                                                 
16                 (2)  the interest rate is 12 percent a year for                                                         
17                      (A)  delinquent fees payable under AS 05.15.095(c); and                                            
18                      (B)  unclaimed property that is not timely paid or delivered, as                                   
19            allowed by AS 34.45.470(a).                                                                                  
20    * Sec. 9. AS 43.05.230 is amended by adding a new subsection to read:                                              
21            (l)  For tax credit certificates purchased by the department in the preceding                                
22       calendar year under AS 43.55.028, the department shall make the aggregate amount of                               
23       tax credits purchased under each statutory section or subsection, as applicable,                                  
24       classified to prevent the identification of a particular taxpayer public by April 30 of                           
25       each year.                                                                                                        
26    * Sec. 10. AS 43.20.046(e) is amended to read:                                                                     
27            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
28       may use available money in the oil and gas tax credit fund established in AS 43.55.028                            
29       to make the refund applied for under (d) of this section in whole or in part if the                               
30       department finds that, [(1) THE CLAIMANT DOES NOT HAVE AN                                                     
31       OUTSTANDING LIABILITY TO THE STATE FOR UNPAID DELINQUENT                                                          
01       TAXES UNDER THIS TITLE; AND (2)] after application of all available tax credits,                                  
02       the claimant's total tax liability under this chapter for the calendar year in which the                          
03       claim is made is zero. [IN THIS SUBSECTION, "UNPAID DELINQUENT TAX"                                               
04       MEANS AN AMOUNT OF TAX FOR WHICH THE DEPARTMENT HAS ISSUED                                                        
05       AN ASSESSMENT THAT HAS NOT BEEN PAID AND, IF CONTESTED, HAS                                                       
06       NOT BEEN FINALLY RESOLVED IN THE TAXPAYER'S FAVOR.]                                                               
07    * Sec. 11. AS 43.20.047(e) is amended to read:                                                                     
08            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
09       may use money available in the oil and gas tax credit fund established in AS 43.55.028                            
10       to make a refund or payment under (d) of this section in whole or in part if the                                  
11       department finds that, [(1) THE CLAIMANT DOES NOT HAVE AN                                                     
12       OUTSTANDING LIABILITY TO THE STATE FOR UNPAID DELINQUENT                                                          
13       TAXES UNDER THIS TITLE; AND (2)] after application of all available tax credits,                                  
14       the claimant's total tax liability under this chapter for the calendar year in which the                          
15       claim is made is zero. [IN THIS SUBSECTION, "UNPAID DELINQUENT TAX"                                               
16       MEANS AN AMOUNT OF TAX FOR WHICH THE DEPARTMENT HAS ISSUED                                                        
17       AN ASSESSMENT THAT HAS NOT BEEN PAID AND, IF CONTESTED, HAS                                                       
18       NOT BEEN FINALLY RESOLVED IN THE TAXPAYER'S FAVOR.]                                                               
19    * Sec. 12. AS 43.20.053(a) is amended to read:                                                                     
20            (a)  A taxpayer that owns an in-state oil refinery whose primary function is the                             
21       manufacturing and sale of refined petroleum products to third parties in arm's length                             
22       transactions may apply a credit against the tax due under this chapter for a qualified                            
23       infrastructure expenditure incurred in the state.  For [FOR] a tax year beginning after                       
24       December 31, 2014, and before January 1, 2017, the [JANUARY 1, 2020. THE] total                               
25       amount of credit a taxpayer may receive under this section may not exceed the lesser                              
26       of 40 percent of qualified infrastructure expenditures incurred in the state during the                           
27       tax year or $10,000,000 for each in-state refinery for which qualified expenditures are                           
28       incurred. For a tax year beginning after December 31, 2016, and before                                        
29       January 1, 2018, the total amount of credit a taxpayer may receive under this                                 
30       section may not exceed the lesser of 20 percent of qualified infrastructure                                   
31       expenditures incurred in the state during the tax year or $5,000,000 for each in-                             
01       state refinery for which qualified expenditures are incurred.                                                 
02    * Sec. 13. AS 43.20.053(e) is amended to read:                                                                     
03            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
04       may use money available in the oil and gas tax credit fund established in AS 43.55.028                            
05       to make a refund or payment under (d) of this section in whole or in part if the                                  
06       department finds that,                                                                                        
07                 [(1)  THE CLAIMANT DOES NOT HAVE AN OUTSTANDING                                                         
08       LIABILITY TO THE STATE FOR UNPAID DELINQUENT TAXES UNDER THIS                                                     
09       TITLE; AND                                                                                                        
10                 (2)]  after application of all available tax credits, the claimant's total tax                          
11       liability under this chapter for the calendar year in which the claim is made is zero.                            
12    * Sec. 14. AS 43.55.011(j) is amended to read:                                                                     
13            (j)  For a calendar year [BEFORE 2022], the tax levied by (e) of this section                                
14       for gas produced from a lease or property in the Cook Inlet sedimentary basin may not                             
15       exceed                                                                                                            
16                 (1)  for a lease or property that first commenced commercial production                                 
17       of gas before April 1, 2006, the product obtained by multiplying (A) the amount of                                
18       taxable gas produced during the calendar year from the lease or property, times (B) the                           
19       average rate of tax that was imposed under this chapter for taxable gas produced from                             
20       the lease or property for the 12-month period ending on March 31, 2006, times (C) the                             
21       quotient obtained by dividing the total gross value at the point of production of the                             
22       taxable gas produced from the lease or property during the 12-month period ending on                              
23       March 31, 2006, by the total amount of that gas;                                                                  
24                 (2)  for a lease or property that first commences commercial production                                 
25       of gas after March 31, 2006, the product obtained by multiplying (A) the amount of                                
26       taxable gas produced during the calendar year from the lease or property, times (B) the                           
27       average rate of tax that was imposed under this chapter for taxable gas produced from                             
28       all leases or properties in the Cook Inlet sedimentary basin for the 12-month period                              
29       ending on March 31, 2006, times (C) the average prevailing value for gas delivered in                             
30       the Cook Inlet area for the 12-month period ending March 31, 2006, as determined by                               
31       the department under AS 43.55.020(f).                                                                             
01    * Sec. 15. AS 43.55.011(k) is amended to read:                                                                     
02            (k)  For a calendar year [BEFORE 2022], the tax levied by (e) of this section                                
03       may not exceed one dollar per barrel of oil for oil produced from a lease or property                         
04       in the Cook Inlet sedimentary basin [MAY NOT EXCEED                                                               
05                 (1)  FOR A LEASE OR PROPERTY THAT FIRST COMMENCED                                                       
06       COMMERCIAL PRODUCTION OF OIL BEFORE APRIL 1, 2006, THE PRODUCT                                                    
07       OBTAINED BY MULTIPLYING (A) THE AMOUNT OF TAXABLE OIL                                                             
08       PRODUCED DURING THE CALENDAR YEAR FROM THE LEASE OR                                                               
09       PROPERTY, TIMES (B) THE AVERAGE RATE OF TAX THAT WAS IMPOSED                                                      
10       UNDER THIS CHAPTER FOR TAXABLE OIL PRODUCED FROM THE LEASE                                                        
11       OR PROPERTY FOR THE 12-MONTH PERIOD ENDING ON MARCH 31, 2006,                                                     
12       TIMES (C) THE QUOTIENT OBTAINED BY DIVIDING THE TOTAL GROSS                                                       
13       VALUE AT THE POINT OF PRODUCTION OF THE TAXABLE OIL PRODUCED                                                      
14       FROM THE LEASE OR PROPERTY DURING THE 12-MONTH PERIOD                                                             
15       ENDING ON MARCH 31, 2006, BY THE TOTAL AMOUNT OF THAT OIL;                                                        
16                 (2)  FOR A LEASE OR PROPERTY THAT FIRST COMMENCES                                                       
17       COMMERCIAL PRODUCTION OF OIL AFTER MARCH 31, 2006, THE                                                            
18       PRODUCT OBTAINED BY MULTIPLYING (A) THE AMOUNT OF TAXABLE                                                         
19       OIL PRODUCED DURING THE CALENDAR YEAR FROM THE LEASE OR                                                           
20       PROPERTY, TIMES (B) THE AVERAGE RATE OF TAX THAT WAS IMPOSED                                                      
21       UNDER THIS CHAPTER FOR TAXABLE OIL PRODUCED FROM ALL LEASES                                                       
22       OR PROPERTIES IN THE COOK INLET SEDIMENTARY BASIN FOR THE 12-                                                     
23       MONTH PERIOD ENDING ON MARCH 31, 2006, TIMES (C) THE AVERAGE                                                      
24       PREVAILING VALUE FOR OIL PRODUCED AND DELIVERED IN THE COOK                                                       
25       INLET AREA FOR THE 12-MONTH PERIOD ENDING ON MARCH 31, 2006, AS                                                   
26       DETERMINED BY THE DEPARTMENT UNDER AS 43.55.020(f)].                                                              
27    * Sec. 16. AS 43.55.011(o) is amended to read:                                                                     
28            (o)  Notwithstanding other provisions of this section, for a calendar year                                   
29       [BEFORE 2022], the tax levied under (e) of this section for each 1,000 cubic feet of                              
30       gas for gas produced from a lease or property outside the Cook Inlet sedimentary basin                            
31       and used in the state, other than gas subject to (p) of this section, may not exceed the                          
01       amount of tax for each 1,000 cubic feet of gas that is determined under (j)(2) of this                            
02       section.                                                                                                          
03    * Sec. 17. AS 43.55.020(a) is amended to read:                                                                     
04            (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                             
05       the tax as follows:                                                                                               
06                 (1)  for oil and gas produced before January 1, 2014, an installment                                    
07       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
08       as allowed by law, is due for each month of the calendar year on the last day of the                              
09       following month; except as otherwise provided under (2) of this subsection, the                                   
10       amount of the installment payment is the sum of the following amounts, less 1/12 of                               
11       the tax credits that are allowed by law to be applied against the tax levied by                                   
12       AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                              
13       not be less than zero:                                                                                            
14                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
15            produced from leases or properties in the state outside the cook inlet                                       
16            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
17            the greater of                                                                                               
18                           (i)  zero; or                                                                                 
19                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
20                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
21                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
22                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
23                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
24                 at the point of production of the oil and gas produced from the leases or                               
25                 properties during the month for which the installment payment is                                        
26                 calculated;                                                                                             
27                      (B)  for oil and gas produced from leases or properties subject                                    
28            to AS 43.55.011(f), the greatest of                                                                          
29                           (i)  zero;                                                                                    
30                           (ii)  zero percent, one percent, two percent, three                                           
31                 percent, or four percent, as applicable, of the gross value at the point of                             
01                 production of the oil and gas produced from the leases or properties                                    
02                 during the month for which the installment payment is calculated; or                                    
03                           (iii)  the sum of 25 percent and the tax rate calculated for                                  
04                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
05                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
06                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
07                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
08                 at the point of production of the oil and gas produced from those leases                                
09                 or properties during the month for which the installment payment is                                     
10                 calculated;                                                                                             
11                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
12            each lease or property, the greater of                                                                       
13                           (i)  zero; or                                                                                 
14                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
15                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
16                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
17                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
18                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
19                 produced from the lease or property from the gross value at the point of                                
20                 production of the oil or gas, respectively, produced from the lease or                                  
21                 property during the month for which the installment payment is                                          
22                 calculated;                                                                                             
23                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
24                           (i)  the sum of 25 percent and the tax rate calculated for                                    
25                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
26                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
27                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
28                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
29                 at the point of production of the oil and gas produced from the leases or                               
30                 properties during the month for which the installment payment is                                        
31                 calculated, but not less than zero; or                                                                  
01                           (ii)  four percent of the gross value at the point of                                         
02                 production of the oil and gas produced from the leases or properties                                    
03                 during the month, but not less than zero;                                                               
04                 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                
05       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
06       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
07       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
08       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
09       amount of taxable gas produced during the month for the amount of taxable gas                                     
10       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
11       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
12       amount of taxable oil produced during the calendar year;                                                          
13                 (3)  an installment payment of the estimated tax levied by                                              
14       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
15       on the last day of the following month; the amount of the installment payment is the                              
16       sum of                                                                                                            
17                      (A)  the applicable tax rate for oil provided under                                                
18            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
19            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
20            during the month; and                                                                                        
21                      (B)  the applicable tax rate for gas provided under                                                
22            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
23            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
24            during the month;                                                                                            
25                 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                       
26       applied as allowed by law, that exceeds the total of the amounts due as installment                               
27       payments of estimated tax is due on March 31 of the year following the calendar year                              
28       of production;                                                                                                    
29                 (5)  for oil and gas produced on and after January 1, 2014, and before                                  
30       January 1, 2022, an installment payment of the estimated tax levied by                                            
31       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
01       month of the calendar year on the last day of the following month; except as otherwise                            
02       provided under (6) of this subsection, the amount of the installment payment is the                               
03       sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be                          
04       applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                           
05       of the installment payment may not be less than zero:                                                             
06                      (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                         
07            produced from leases or properties in the state outside the Cook Inlet                                       
08            sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                               
09            the greater of                                                                                               
10                           (i)  zero; or                                                                                 
11                           (ii)  35 percent multiplied by the remainder obtained by                                      
12                 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 the leases or                               
16                 properties during the month for which the installment payment is                                        
17                 calculated;                                                                                             
18                      (B)  for oil and gas produced from leases or properties subject                                    
19            to AS 43.55.011(f), the greatest of                                                                          
20                           (i)  zero;                                                                                    
21                           (ii)  zero percent, one percent, two percent, three                                           
22                 percent, or four percent, as applicable, of the gross value at the point of                             
23                 production of the oil and gas produced from the leases or properties                                    
24                 during the month for which the installment payment is calculated; or                                    
25                           (iii)  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 those leases                                
30                 or properties during the month for which the installment payment is                                     
31                 calculated, except that, for the purposes of this calculation, a reduction                              
01                 from the gross value at the point of production may apply for oil and                                   
02                 gas subject to AS 43.55.160(f) or (g);                                                                  
03                      (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                   
04            each lease or property, the greater of                                                                       
05                           (i)  zero; or                                                                                 
06                           (ii)  35 percent multiplied by the remainder obtained by                                      
07                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
08                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
09                 deductible under AS 43.55.160 for the oil or gas, respectively,                                         
10                 produced from the lease or property from the gross value at the point of                                
11                 production of the oil or gas, respectively, produced from the lease or                                  
12                 property during the month for which the installment payment is                                          
13                 calculated;                                                                                             
14                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
15                           (i)  35 percent multiplied by the remainder obtained by                                       
16                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
17                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
18                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
19                 at the point of production of the oil and gas produced from the leases or                               
20                 properties during the month for which the installment payment is                                        
21                 calculated, but not less than zero; or                                                                  
22                           (ii)  four percent of the gross value at the point of                                         
23                 production of the oil and gas produced from the leases or properties                                    
24                 during the month, but not less than zero;                                                               
25                 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                
26       subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                    
27       carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                             
28       applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but                          
29       substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the                               
30       amount of taxable gas produced during the month for the amount of taxable gas                                     
31       produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or                                    
01       (2)(A), as applicable, the amount of taxable oil produced during the month for the                                
02       amount of taxable oil produced during the calendar year;                                                          
03                 (7)  for oil and gas produced on or after January 1, 2022, an installment                               
04       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
05       as allowed by law, is due for each month of the calendar year on the last day of the                              
06       following month; except as otherwise provided under (10) of this subsection, the                              
07       amount of the installment payment is the sum of the following amounts, less 1/12 of                               
08       the tax credits that are allowed by law to be applied against the tax levied by                                   
09       AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                              
10       not be less than zero:                                                                                            
11                      (A)  for oil produced from leases or properties that include land                                  
12            north of 68 degrees North latitude, the greatest of                                                          
13                           (i)  zero;                                                                                    
14                           (ii)  zero percent, one percent, two percent, three                                           
15                 percent, or four percent, as applicable, of the gross value at the point of                             
16                 production of the oil produced from the leases or properties during the                                 
17                 month for which the installment payment is calculated; or                                               
18                           (iii)  35 percent multiplied by the remainder obtained by                                     
19                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
20                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
21                 deductible for the oil under AS 43.55.160(h)(1) from the gross value at                                 
22                 the point of production of the oil produced from those leases or                                        
23                 properties during the month for which the installment payment is                                        
24                 calculated, except that, for the purposes of this calculation, a reduction                              
25                 from the gross value at the point of production may apply for oil                                       
26                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
27                      (B)  for oil produced before or during the last calendar year                                      
28            under AS 43.55.024(b) for which the producer could take a tax credit under                                   
29            AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                               
30            sedimentary basin, no part of which is north of 68 degrees North latitude, other                             
31            than leases or properties subject to AS 43.55.011(o) or (p) [AS 43.55.011(p)],                           
01            the greater of                                                                                               
02                           (i)  zero; or                                                                                 
03                           (ii)  35 percent multiplied by the remainder obtained by                                      
04                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
05                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
06                 deductible for the oil under AS 43.55.160(h)(2) from the gross value at                                 
07                 the point of production of the oil produced from the leases or properties                               
08                 during the month for which the installment payment is calculated;                                       
09                      (C)  for oil and gas produced from leases or properties subject                                    
10            to AS 43.55.011(p), except as otherwise provided under (8) of this subsection,                               
11            the sum of                                                                                                   
12                           (i)  35 percent multiplied by the remainder obtained by                                       
13                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
14                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
15                 deductible for the oil under AS 43.55.160(h)(3) from the gross value at                                 
16                 the point of production of the oil produced from the leases or properties                               
17                 during the month for which the installment payment is calculated, but                                   
18                 not less than zero; and                                                                                 
19                           (ii)  13 percent of the gross value at the point of                                           
20                 production of the gas produced from the leases or properties during the                                 
21                 month, but not less than zero;                                                                          
22                      (D)  for oil produced from leases or properties in the state, no                                   
23            part of which is north of 68 degrees North latitude, other than leases or                                    
24            properties subject to (B), [OR] (C), or (F) of this paragraph, the greater of                        
25                           (i)  zero; or                                                                                 
26                           (ii)  35 percent multiplied by the remainder obtained by                                      
27                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
28                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
29                 deductible for the oil under AS 43.55.160(h)(4) from the gross value at                                 
30                 the point of production of the oil produced from the leases or properties                               
31                 during the month for which the installment payment is calculated;                                       
01                      (E)  for gas produced from each lease or property in the state,                                    
02            other than a lease or property subject to AS 43.55.011(o) or (p)                                         
03            [AS 43.55.011(p)], 13 percent of the gross value at the point of production of                               
04            the gas produced from the lease or property during the month for which the                                   
05            installment payment is calculated, but not less than zero;                                                   
06                      (F)  for oil subject to AS 43.55.011(k), for each lease or                                     
07            property, the greater of                                                                                 
08                           (i)  zero; or                                                                             
09                           (ii)  35 percent multiplied by the remainder obtained                                     
10                 by subtracting 1/12 of the producer's adjusted lease expenditures                                   
11                 for the calendar year of production under AS 43.55.165 and                                          
12                 43.55.170 that are deductible under AS 43.55.160 for the oil,                                       
13                 produced from the lease or property from the gross value at the                                     
14                 point of production of the oil, produced from the lease or property                                 
15                 during the month for which the installment payment is calculated;                                   
16                      (G)  for gas subject to AS 43.55.011(j) or (o), for each lease                                 
17            or property, the greater of                                                                              
18                           (i)  zero; or                                                                             
19                           (ii)  13 percent of the gross value at the point of                                       
20                 production of the gas produced from the lease or property during                                    
21                 the month for which the installment payment is calculated;                                          
22                 (8)  an amount calculated under (7)(C) of this subsection may not                                       
23       exceed four percent of the gross value at the point of production of the oil and gas                              
24       produced from leases or properties subject to AS 43.55.011(p) during the month for                                
25       which the installment payment is calculated;                                                                      
26                 (9)  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and                                  
27       (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point                          
28       of production is determined under AS 43.55.011(f)(1) or (2) but substituting the                                  
29       phrase "month for which the installment payment is calculated" in AS 43.55.011(f)(1)                              
30       and (2) for the phrase "calendar year for which the tax is due";                                              
31                 (10)  an amount calculated under (7)(F) or (G) of this subsection                                   
01       for oil or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product                             
02       obtained by carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or                              
03       43.55.011(o), as applicable, for gas, or set out in AS 43.55.011(k)(1) or (2), as                             
04       applicable, for oil, but substituting in AS 43.55.011(j)(1)(A) or (2)(A) or                                   
05       43.55.011(o), as applicable, the amount of taxable gas produced during the month                              
06       for the amount of taxable gas produced during the calendar year and substituting                              
07       in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the amount of taxable oil                                  
08       produced during the month for the amount of taxable oil produced during the                                   
09       calendar year. ["]                                                                                            
10    * Sec. 18. AS 43.55.023(a) is amended to read:                                                                     
11            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
12       expenditure as follows:                                                                                           
13                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
14       deductible lease expenditure for purposes of calculating the production tax value of oil                          
15       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
16       [AS 38.05.180(i), AS 41.09.010,] AS 43.20.043 [,] or AS 43.55.025, a producer or                                  
17       explorer that incurs a qualified capital expenditure in the Cook Inlet sedimentary                            
18       basin may also elect to apply a tax credit against a tax levied by AS 43.55.011(e) in                         
19       the amount of 10 [20] percent of that expenditure;                                                            
20                 (2)  a producer or explorer may take a credit for a qualified capital                                   
21       expenditure incurred in connection with geological or geophysical exploration or in                               
22       connection with an exploration well only if the producer or explorer                                              
23                      (A)  agrees, in writing, to the applicable provisions of                                           
24            AS 43.55.025(f)(2); and                                                                                      
25                      (B)  submits to the Department of Natural Resources all data                                       
26            that would be required to be submitted under AS 43.55.025(f)(2) [;                                           
27                 (3)  A CREDIT FOR A QUALIFIED CAPITAL EXPENDITURE                                                       
28       INCURRED TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS                                                           
29       DEPOSITS LOCATED NORTH OF 68 DEGREES NORTH LATITUDE MAY BE                                                        
30       TAKEN ONLY IF THE EXPENDITURE IS INCURRED BEFORE JANUARY 1,                                                       
31       2014].                                                                                                            
01    * Sec. 19. 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 on and after                            
08       January 1, 2016, to explore for, develop, or produce oil or gas deposits located north                            
09       of 68 degrees North latitude, a producer or explorer may elect to take a tax credit in                            
10       the amount of 35 percent of a carried-forward annual loss. For lease expenditures                                 
11       incurred on or after January 1, 2014, and before January 1, 2017, to explore for,                             
12       develop, or produce oil or gas deposits located south of 68 degrees North latitude, a                             
13       producer or explorer may elect to take a tax credit in the amount of 25 percent of a                              
14       carried-forward annual loss. For lease expenditures incurred on or after January 1,                           
15       2017, to explore for, develop, or produce oil or gas deposits located in the Cook                             
16       Inlet sedimentary basin, a producer or explorer may elect to take a tax credit in                             
17       the amount of 15 percent of a carried-forward annual loss. A credit under this                                
18       subsection may be applied against a tax levied by AS 43.55.011(e). For purposes of                                
19       this subsection,                                                                                                  
20                 (1)  a carried-forward annual loss is the amount of a producer's or                                 
21       explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                     
22       previous calendar year that was not deductible in calculating production tax values for                           
23       that calendar year under AS 43.55.160;                                                                        
24                 (2)  for lease expenditures incurred on or after January 1, 2017,                                   
25       any reduction under AS 43.55.160(f) or (g) is added back to the calculation of                                
26       production tax values for that calendar year under AS 43.55.160 for the                                       
27       determination of a carried-forward annual loss.                                                             
28    * Sec. 20. AS 43.55.023(b), as amended by sec. 19 of this Act, is amended to read:                                 
29            (b)  Before January 1, 2014, a producer or explorer may elect to take a tax                                  
30       credit in the amount of 25 percent of a carried-forward annual loss. For lease                                    
31       expenditures incurred on and after January 1, 2014, and before January 1, 2016, to                                
01       explore for, develop, or produce oil or gas deposits located north of 68 degrees North                            
02       latitude, a producer or explorer may elect to take a tax credit in the amount of 45                               
03       percent of a carried-forward annual loss. For lease expenditures incurred on and after                            
04       January 1, 2016, to explore for, develop, or produce oil or gas deposits located north                            
05       of 68 degrees North latitude, a producer or explorer may elect to take a tax credit in                            
06       the amount of 35 percent of a carried-forward annual loss. [FOR LEASE                                             
07       EXPENDITURES INCURRED ON OR AFTER JANUARY 1, 2014, AND BEFORE                                                     
08       JANUARY 1, 2017, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS                                                   
09       DEPOSITS LOCATED SOUTH OF 68 DEGREES NORTH LATITUDE, A                                                            
10       PRODUCER OR EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE                                                        
11       AMOUNT OF 25 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS. FOR                                                        
12       LEASE EXPENDITURES INCURRED ON OR AFTER JANUARY 1, 2017, TO                                                       
13       EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED                                                      
14       IN THE COOK INLET SEDIMENTARY BASIN, A PRODUCER OR EXPLORER                                                       
15       MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 15 PERCENT OF                                                     
16       A CARRIED-FORWARD ANNUAL LOSS.] A credit under this subsection may be                                             
17       applied against a tax levied by AS 43.55.011(e). For purposes of this subsection,                                 
18                 (1)  a carried-forward annual loss is the amount of a producer's or                                     
19       explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                     
20       previous calendar year that was not deductible in calculating production tax values for                           
21       that calendar year under AS 43.55.160;                                                                            
22                 (2)  for lease expenditures incurred on or after January 1, 2017, any                                   
23       reduction under AS 43.55.160(f) or (g) is added back to the calculation of production                             
24       tax values for that calendar year under AS 43.55.160 for the determination of a                                   
25       carried-forward annual loss.                                                                                      
26    * Sec. 21. AS 43.55.023(d) is amended to read:                                                                     
27            (d)  A person that is entitled to take a tax credit under this section that wishes                           
28       to transfer the unused credit to another person or obtain a cash payment under                                    
29       AS 43.55.028 may apply to the department for a transferable tax credit certificate. An                            
30       application under this subsection must be in a form prescribed by the department and                              
31       must include supporting information and documentation that the department                                         
01       reasonably requires. The department shall grant or deny an application, or grant an                               
02       application as to a lesser amount than that claimed and deny it as to the excess, not                             
03       later than 120 days after the latest of (1) March 31 of the year following the calendar                           
04       year in which the [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward                                              
05       annual loss for which the credit is claimed was incurred; (2) the date the statement                              
06       required under AS 43.55.030(a) or (e) was filed for the calendar year in which the                                
07       [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward annual loss for which                                          
08       the credit is claimed was incurred; or (3) the date the application was received by the                           
09       department. If, based on the information then available to it, the department is                                  
10       reasonably satisfied that the applicant is entitled to a credit, the department shall issue                       
11       the applicant a transferable tax credit certificate for the amount of the credit. A                               
12       certificate issued under this subsection does not expire.                                                         
13    * Sec. 22. AS 43.55.023(e) is amended to read:                                                                     
14            (e)  A person to which a transferable tax credit certificate is issued under (d) of                          
15       this section may transfer the certificate to another person, and a transferee may further                         
16       transfer the certificate. Subject to the limitations set out in former (a) of this section                    
17       and (b) - (d) [(a) - (d)] of this section, and notwithstanding any action the department                      
18       may take with respect to the applicant under (g) of this section, the owner of a                                  
19       certificate may apply the credit or a portion of the credit shown on the certificate only                         
20       against a tax levied by AS 43.55.011(e). However, a credit shown on a transferable tax                            
21       credit certificate may not be applied to reduce a transferee's total tax liability under                          
22       AS 43.55.011(e) for oil and gas produced during a calendar year to less than 80                                   
23       percent of the tax that would otherwise be due without applying that credit. Any                                  
24       portion of a credit not used under this subsection may be applied in a later period.                              
25    * Sec. 23. AS 43.55.023(l) is amended to read:                                                                     
26            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
27       expenditure incurred in the state south of 68 degrees North latitude after June 30,                               
28       2010, as follows:                                                                                                 
29                 (1)  notwithstanding that a well lease expenditure incurred in the Cook                             
30       Inlet sedimentary basin [STATE SOUTH OF 68 DEGREES NORTH LATITUDE]                                            
31       may be a deductible lease expenditure for purposes of calculating the production tax                              
01       value of oil and gas under AS 43.55.160(a), unless a credit for that expenditure is                               
02       taken under (a) of this section, [AS 38.05.180(i), AS 41.09.010,] AS 43.20.043, or                                
03       AS 43.55.025, a producer or explorer that incurs a well lease expenditure in the Cook                         
04       Inlet sedimentary basin [STATE SOUTH OF 68 DEGREES NORTH LATITUDE]                                            
05       may elect to apply a tax credit against a tax levied by AS 43.55.011(e) in the amount                             
06       of 20 [40] percent of that expenditure [; A TAX CREDIT UNDER THIS                                           
07       PARAGRAPH MAY BE APPLIED FOR A SINGLE CALENDAR YEAR];                                                             
08                 (2)  a producer or explorer may take a credit for a well lease                                          
09       expenditure incurred in the state south of 68 degrees North latitude in connection with                           
10       geological or geophysical exploration or in connection with an exploration well only if                           
11       the producer or explorer                                                                                          
12                      (A)  agrees, in writing, to the applicable provisions of                                           
13            AS 43.55.025(f)(2); and                                                                                      
14                      (B)  submits to the Department of Natural Resources all data                                       
15            that would be required to be submitted under AS 43.55.025(f)(2).                                             
16    * Sec. 24. AS 43.55.024(i) is amended to read:                                                                     
17            (i)  A producer may apply against the producer's tax liability for the calendar                              
18       year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under                                
19       AS 43.55.011(e) that receives a reduction in the gross value at the point of                                  
20       production under [MEETS ONE OR MORE OF THE CRITERIA IN]                                                       
21       AS 43.55.160(f) or (g) and that is produced during a calendar year after December 31,                             
22       2013. A tax credit authorized by this subsection may not reduce a producer's tax                                  
23       liability for a calendar year under AS 43.55.011(e) below zero.                                                   
24    * Sec. 25. AS 43.55.024(j) is amended to read:                                                                     
25            (j)  A producer may apply against the producer's tax liability for the calendar                              
26       year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for                            
27       each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in                         
28       the gross value at the point of production under [MEET ANY OF THE CRITERIA                                    
29       IN] AS 43.55.160(f) or (g) and that is produced during a calendar year after                                      
30       December 31, 2013, from leases or properties north of 68 degrees North latitude. A tax                            
31       credit under this subsection may not reduce a producer's tax liability for a calendar                             
01       year under AS 43.55.011(e) below the amount calculated under AS 43.55.011(f). The                                 
02       amount of the tax credit for a barrel of taxable oil subject to this subsection produced                          
03       during a month of the calendar year is                                                                            
04                 (1)  $8 for each barrel of taxable oil if the average gross value at the                                
05       point of production for the month is less than $80 a barrel;                                                      
06                 (2)  $7 for each barrel of taxable oil if the average gross value at the                                
07       point of production for the month is greater than or equal to $80 a barrel, but less than                         
08       $90 a barrel;                                                                                                     
09                 (3)  $6 for each barrel of taxable oil if the average gross value at the                                
10       point of production for the month is greater than or equal to $90 a barrel, but less than                         
11       $100 a barrel;                                                                                                    
12                 (4)  $5 for each barrel of taxable oil if the average gross value at the                                
13       point of production for the month is greater than or equal to $100 a barrel, but less                             
14       than $110 a barrel;                                                                                               
15                 (5)  $4 for each barrel of taxable oil if the average gross value at the                                
16       point of production for the month is greater than or equal to $110 a barrel, but less                             
17       than $120 a barrel;                                                                                               
18                 (6)  $3 for each barrel of taxable oil if the average gross value at the                                
19       point of production for the month is greater than or equal to $120 a barrel, but less                             
20       than $130 a barrel;                                                                                               
21                 (7)  $2 for each barrel of taxable oil if the average gross value at the                                
22       point of production for the month is greater than or equal to $130 a barrel, but less                             
23       than $140 a barrel;                                                                                               
24                 (8)  $1 for each barrel of taxable oil if the average gross value at the                                
25       point of production for the month is greater than or equal to $140 a barrel, but less                             
26       than $150 a barrel;                                                                                               
27                 (9)  zero if the average gross value at the point of production for the                                 
28       month is greater than or equal to $150 a barrel.                                                                  
29    * Sec. 26. AS 43.55.028(a) is amended to read:                                                                     
30            (a)  The oil and gas tax credit fund is established as a separate fund of the state.                         
31       The purpose of the fund is to purchase transferable tax credit certificates issued under                          
01       AS 43.55.023 and production tax credit certificates issued under AS 43.55.025 and to                              
02       pay refunds and payments claimed under AS 43.20.046 or [,] 43.20.047 [, OR                                    
03       43.20.053].                                                                                                       
04    * Sec. 27. AS 43.55.028(e) is amended to read:                                                                     
05            (e)  The department, on the written application of a person to whom a                                        
06       transferable tax credit certificate has been issued under AS 43.55.023(d) or former                               
07       AS 43.55.023(m) or to whom a production tax credit certificate has been issued under                              
08       AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                                    
09       purchase, in whole or in part, the certificate. The department may not purchase a                             
10       total of more than $70,000,000 in tax credit certificates from a person in a                                  
11       calendar year. Before purchasing a certificate or part of a certificate, [IF] the                             
12       department shall find [FINDS] that                                                                            
13                 (1)  the calendar year of the purchase is not earlier than the first                                    
14       calendar year for which the credit shown on the certificate would otherwise be allowed                            
15       to be applied against a tax;                                                                                      
16                 (2)  the application is not the result of the division of a single entity                           
17       into multiple entities that would reasonably be expected to apply as a single entity                          
18       if the $70,000,000 limitation in this subsection did not exist [APPLICANT DOES                                
19       NOT HAVE AN OUTSTANDING LIABILITY TO THE STATE FOR UNPAID                                                         
20       DELINQUENT TAXES UNDER THIS TITLE];                                                                               
21                 (3)  the applicant's total tax liability under AS 43.55.011(e), after                                   
22       application of all available tax credits, for the calendar year in which the application is                       
23       made is zero;                                                                                                     
24                 (4)  the applicant's average daily production of oil and gas taxable                                    
25       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
26       the application is made was not more than 50,000 BTU equivalent barrels; and                                      
27                 (5)  the purchase is consistent with this section and regulations adopted                               
28       under this section.                                                                                               
29    * Sec. 28. AS 43.55.028(g) is amended to read:                                                                     
30            (g)  The department shall [MAY] adopt regulations to carry out the purposes                              
31       of this section, including standards and procedures to allocate available money among                             
01       applications for purchases under this chapter and claims for refunds and payments                                 
02       under AS 43.20.046, 43.20.047, or 43.20.053 when the total amount of the                                          
03       applications for purchase and claims for refund exceed the amount of available money                              
04       in the fund. The regulations adopted by the department                                                            
05                 (1)  may not, when allocating available money in the fund under this                                
06       section, distinguish an application for the purchase of a credit certificate issued under                         
07       former AS 43.55.023(m) or a claim for a refund or payment under AS 43.20.046,                                     
08       43.20.047, or 43.20.053;                                                                                      
09                 (2)  must grant a preference to an applicant if at least 75 percent of                              
10       the applicant's workforce in the state in the previous calendar year was                                      
11       composed of resident workers; in this paragraph, "resident worker" has the                                    
12       meaning given in AS 43.40.092(b);                                                                             
13                 (3)  must provide for the purchase of the amount equal to the first                                 
14       50 percent of the credit repurchase limit per person under (e) of this section at a                           
15       rate of 100 percent of the value of the certificate or portion of the certificate                             
16       requested to be purchased and the amount equal to the next 50 percent of the                                  
17       credit repurchase limit per person under (e) of this section at a rate of 75 percent                          
18       of the value of the certificate or portion of the certificate requested to be                                 
19       purchased.                                                                                                    
20    * Sec. 29. AS 43.55.028(g), as amended by sec. 28 of this Act, is amended to read:                                 
21            (g)  The department shall adopt regulations to carry out the purposes of this                                
22       section, including standards and procedures to allocate available money among                                     
23       applications for purchases under this chapter and claims for refunds and payments                                 
24       under AS 43.20.046 or [,] 43.20.047  [, OR 43.20.053] when the total amount of the                            
25       applications for purchase and claims for refund exceed the amount of available money                              
26       in the fund. The regulations adopted by the department                                                            
27                 (1)  may not, when allocating available money in the fund under this                                    
28       section, distinguish an application for the purchase of a credit certificate issued under                         
29       former AS 43.55.023(m) or a claim for a refund or payment under AS 43.20.046 or [,]                           
30       43.20.047 [, OR 43.20.053];                                                                                       
31                 (2)  must grant a preference to an applicant if at least 75 percent of the                              
01       applicant's workforce in the state in the previous calendar year was composed of                                  
02       resident workers; in this paragraph, "resident worker" has the meaning given in                                   
03       AS 43.40.092(b);                                                                                                  
04                 (3)  must provide for the purchase of the amount equal to the first 50                                  
05       percent of the credit repurchase limit per person under (e) of this section at a rate of                          
06       100 percent of the value of the certificate or portion of the certificate requested to be                         
07       purchased and the amount equal to the next 50 percent of the credit repurchase limit                              
08       per person under (e) of this section at a rate of 75 percent of the value of the certificate                      
09       or portion of the certificate requested to be purchased.                                                          
10    * Sec. 30. AS 43.55.028 is amended by adding a new subsection to read:                                             
11            (j)  If an applicant or claimant has an outstanding liability to the state directly                          
12       related to the applicant's or claimant's oil or gas exploration, development, or                                  
13       production and the department has not previously reduced the amount paid to that                                  
14       applicant or claimant for a certificate or refund because of that outstanding liability,                          
15       the department may purchase only that portion of a certificate or pay only that portion                           
16       of a refund that exceeds the outstanding liability. After notifying the applicant or                              
17       claimant, the department may apply the amount by which the department reduced its                                 
18       purchase of a certificate or payment for a refund because of an outstanding liability to                          
19       satisfy the outstanding liability. Satisfaction of an outstanding liability under this                            
20       subsection does not affect the applicant's ability to contest that liability. The                                 
21       department may enter into contracts or agreements with another department to which                                
22       the outstanding liability is owed. In this subsection, "outstanding liability" means an                           
23       amount of tax, interest, penalty, fee, rental, royalty, or other charge for which the state                       
24       has issued a demand for payment that has not been paid when due and, if contested,                                
25       has not been finally resolved against the state.                                                                  
26    * Sec. 31. AS 43.55.029(a) is amended to read:                                                                     
27            (a)  An explorer or producer that has applied for a production tax credit under                              
28       former AS 43.55.023(a) [, (b),] or (l) or under AS 43.55.023(b) or 43.55.025(a) may                       
29       make a present assignment of the production tax credit certificate expected to be                                 
30       issued by the department to a third-party assignee. The assignment may be made either                             
31       at the time the application is filed with the department or not later than 30 days after                          
01       the date of filing with the department. Once a notice of assignment in compliance with                            
02       this section is filed with the department, the assignment is irrevocable and cannot be                            
03       modified by the explorer or producer without the written consent of the assignee                                  
04       named in the assignment. If a production tax credit certificate is issued to the explorer                         
05       or producer, the notice of assignment remains effective and shall be filed with the                               
06       department by the explorer or producer together with any application for the                                      
07       department to purchase the certificate under AS 43.55.028(e).                                                     
08    * Sec. 32. AS 43.55.030(a) is amended to read:                                                                     
09            (a)  A producer that produces oil or gas from a lease or property in the state                               
10       during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                               
11       for that oil or gas, shall file with the department on March 31 of the following year a                           
12       statement, under oath, in a form prescribed by the department, giving, with other                                 
13       information required, the following:                                                                              
14                 (1)  a description of each lease or property from which oil or gas was                                  
15       produced, by name, legal description, lease number, or accounting codes assigned by                               
16       the department;                                                                                                   
17                 (2)  the names of the producer and, if different, the person paying the                                 
18       tax, if any;                                                                                                      
19                 (3)  the gross amount of oil and the gross amount of gas produced from                                  
20       each lease or property, separately identifying the gross amount of gas produced from                              
21       each oil and gas lease to which an effective election under AS 43.55.014(a) applies,                              
22       the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of                             
23       the gross amount of oil and gas owned by the producer;                                                            
24                 (4)  the gross value at the point of production of the oil and of the gas                               
25       produced from each lease or property owned by the producer and the costs of                                       
26       transportation of the oil and gas;                                                                                
27                 (5)  the name of the first purchaser and the price received for the oil and                             
28       for the gas, unless relieved from this requirement in whole or in part by the                                     
29       department;                                                                                                       
30                 (6)  the producer's qualified capital expenditures, [AS DEFINED IN                                      
31       AS 43.55.023,] other lease expenditures under AS 43.55.165, and adjustments or other                              
01       payments or credits under AS 43.55.170;                                                                           
02                 (7)  the production tax values of the oil and gas under AS 43.55.160(a)                                 
03       or of the oil under AS 43.55.160(h), as applicable;                                                               
04                 (8)  any claims for tax credits to be applied; and                                                      
05                 (9)  calculations showing the amounts, if any, that were or are due                                     
06       under AS 43.55.020(a) and interest on any underpayment or overpayment.                                            
07    * Sec. 33. AS 43.55.030(e) is amended to read:                                                                     
08            (e)  An explorer or producer that incurs a lease expenditure under                                           
09       AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar                                 
10       year but does not produce oil or gas from a lease or property in the state during the                             
11       calendar year shall file with the department, on March 31 of the following year, a                                
12       statement, under oath, in a form prescribed by the department, giving, with other                                 
13       information required, the following:                                                                              
14                 (1)  the explorer's or producer's qualified capital expenditures, [AS                                   
15       DEFINED IN AS 43.55.023,] other lease expenditures under AS 43.55.165, and                                        
16       adjustments or other payments or credits under AS 43.55.170; and                                                  
17                 (2)  if the explorer or producer receives a payment or credit under                                     
18       AS 43.55.170, calculations showing whether the explorer or producer is liable for a                               
19       tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount.                                                 
20    * Sec. 34. AS 43.55.160(f) is amended to read:                                                                     
21            (f)  On and after January 1, 2014, in the calculation of an annual production tax                            
22       value of a producer under (a)(1)(A) or (h)(1) of this section, the gross value at the                             
23       point of production of oil or gas produced from a lease or property north of 68 degrees                           
24       North latitude meeting one or more of the following criteria is reduced by 20 percent:                            
25       (1) the oil or gas is produced from a lease or property that does not contain a lease that                        
26       was within a unit on January 1, 2003; (2) the oil or gas is produced from a                                       
27       participating area established after December 31, 2011, that is within a unit formed                              
28       under AS 38.05.180(p) before January 1, 2003, if the participating area does not                                  
29       contain a reservoir that had previously been in a participating area established before                           
30       December 31, 2011; (3) the oil or gas is produced from acreage that was added to an                               
31       existing participating area by the Department of Natural Resources on and after                                   
01       January 1, 2014, and the producer demonstrates to the department that the volume of                               
02       oil or gas produced is from acreage added to an existing participating area. This                                 
03       subsection does not apply to gas produced before 2022 that is used in the state or to                             
04       gas produced on and after January 1, 2022. For oil and gas first produced from a                              
05       lease or property after December 31, 2016, a reduction allowed under this                                     
06       subsection applies from the date of commencement of regular production of oil                                 
07       and gas from that lease or property and expires after three years, consecutive or                             
08       nonconsecutive, in which the average annual price per barrel for Alaska North                                 
09       Slope crude oil for sale on the United States West Coast is more than $70 or after                            
10       seven years, whichever occurs first.  For oil and gas first produced from a lease                             
11       or property before January 1, 2017, a reduction allowed under this subsection                                 
12       expires on the earlier of January 1, 2023, or January 1 following three years,                                
13       consecutive or nonconsecutive, in which the average annual price per barrel for                               
14       Alaska North Slope crude oil for sale on the United States West Coast is more                                 
15       than $70. The Alaska Oil and Gas Conservation Commission shall determine the                                  
16       commencement of regular production of oil and gas for purposes of this section.                               
17       A reduction under this subsection may not reduce the gross value at the point of                                  
18       production below zero. In this subsection, "participating area" means a reservoir or                              
19       portion of a reservoir producing or contributing to production as approved by the                                 
20       Department of Natural Resources.                                                                                  
21    * Sec. 35. AS 43.55.160(g) is amended to read:                                                                     
22            (g)  On and after January 1, 2014, in addition to the reduction under (f) of this                            
23       section, in the calculation of an annual production tax value of a producer under                                 
24       (a)(1)(A) or (h)(1) of this section, the gross value at the point of production of oil or                         
25       gas produced from a lease or property north of 68 degrees North latitude that does not                            
26       contain a lease that was within a unit on January 1, 2003, is reduced by 10 percent if                            
27       the oil or gas is produced from a unit made up solely of leases that have a royalty                               
28       share of more than 12.5 percent in amount or value of the production removed or sold                              
29       from the lease as determined under AS 38.05.180(f). This subsection does not apply if                             
30       the royalty obligation for one or more of the leases in the unit has been reduced to 12.5                         
31       percent or less under AS 38.05.180(j) for all or part of the calendar year for which the                          
01       annual production tax value is calculated. This subsection does not apply to gas                                  
02       produced before 2022 that is used in the state or to gas produced on and after                                    
03       January 1, 2022. For oil or gas first produced after December 31, 2016, a                                     
04       reduction allowed under this subsection applies to oil or gas produced from a                                 
05       lease or property for the first seven years after the commencement of regular                                 
06       production of oil or gas from that lease or property. For oil or gas first produced                           
07       before January 1, 2017, a reduction allowed under this subsection for a lease or                              
08       property expires January 1, 2023. The Alaska Oil and Gas Conservation                                         
09       Commission shall determine the commencement of regular production for                                         
10       purposes of this subsection. A reduction under this subsection may not reduce the                             
11       gross value at the point of production below zero.                                                              
12    * Sec. 36. AS 43.55.165(a) is amended to read:                                                                     
13            (a)  For [EXCEPT AS PROVIDED IN (j) AND (k) OF THIS SECTION,                                             
14       FOR] purposes of this chapter, a producer's lease expenditures for a calendar year are                            
15                 (1)  costs, other than items listed in (e) of this section, that are                                    
16                      (A)  incurred by the producer during the calendar year after                                       
17            March 31, 2006, to explore for, develop, or produce oil or gas deposits located                              
18            within the producer's leases or properties in the state or, in the case of land in                           
19            which the producer does not own an operating right, operating interest, or                                   
20            working interest, to explore for oil or gas deposits within other land in the                                
21            state; and                                                                                                   
22                      (B)  allowed by the department by regulation, based on the                                         
23            department's determination that the costs satisfy the following three                                        
24            requirements:                                                                                                
25                           (i)  the costs must be incurred upstream of the point of                                      
26                 production of oil and gas;                                                                              
27                           (ii)  the costs must be ordinary and necessary costs of                                       
28                 exploring for, developing, or producing, as applicable, oil or gas                                      
29                 deposits; and                                                                                           
30                           (iii)  the costs must be direct costs of exploring for,                                       
31                 developing, or producing, as applicable, oil or gas deposits; and                                       
01                 (2)  a reasonable allowance for that calendar year, as determined under                                 
02       regulations adopted by the department, for overhead expenses that are directly related                            
03       to exploring for, developing, or producing, as applicable, the oil or gas deposits.                               
04    * Sec. 37. AS 43.55.165(e) is amended to read:                                                                     
05            (e)  For purposes of this section, lease expenditures do not include                                         
06                 (1)  depreciation, depletion, or amortization;                                                          
07                 (2)  oil or gas royalty payments, production payments, lease profit                                     
08       shares, or other payments or distributions of a share of oil or gas production, profit, or                        
09       revenue, except that a producer's lease expenditures applicable to oil and gas produced                           
10       from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net                             
11       profit paid to the state under that lease;                                                                        
12                 (3)  taxes based on or measured by net income;                                                          
13                 (4)  interest or other financing charges or costs of raising equity or debt                             
14       capital;                                                                                                          
15                 (5)  acquisition costs for a lease or property or exploration license;                                  
16                 (6)  costs arising from fraud, wilful misconduct, gross negligence,                                     
17       violation of law, or failure to comply with an obligation under a lease, permit, or                               
18       license issued by the state or federal government;                                                                
19                 (7)  fines or penalties imposed by law;                                                                 
20                 (8)  costs of arbitration, litigation, or other dispute resolution activities                           
21       that involve the state or concern the rights or obligations among owners of interests in,                         
22       or rights to production from, one or more leases or properties or a unit;                                         
23                 (9)  costs incurred in organizing a partnership, joint venture, or other                                
24       business entity or arrangement;                                                                                   
25                 (10)  amounts paid to indemnify the state; the exclusion provided by                                    
26       this paragraph does not apply to the costs of obtaining insurance or a surety bond from                           
27       a third-party insurer or surety;                                                                                  
28                 (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                
29                 (12)  an expenditure otherwise deductible under (b) of this section that                                
30       is a result of an internal transfer, a transaction with an affiliate, or a transaction                            
31       between related parties, or is otherwise not an arm's length transaction, unless the                              
01       producer establishes to the satisfaction of the department that the amount of the                                 
02       expenditure does not exceed the fair market value of the expenditure;                                             
03                 (13)  an expenditure incurred to purchase an interest in any corporation,                               
04       partnership, limited liability company, business trust, or any other business entity,                             
05       whether or not the transaction is treated as an asset sale for federal income tax                                 
06       purposes;                                                                                                         
07                 (14)  a tax levied under AS 43.55.011 or 43.55.014;                                                     
08                 (15)  costs incurred for dismantlement, removal, surrender, or                                          
09       abandonment of a facility, pipeline, well pad, platform, or other structure, or for the                           
10       restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in                       
11       conjunction with dismantlement, removal, surrender, or abandonment; a cost is not                                 
12       excluded under this paragraph if the dismantlement, removal, surrender, or                                        
13       abandonment for which the cost is incurred is undertaken for the purpose of replacing,                            
14       renovating, or improving the facility, pipeline, well pad, platform, or other structure;                          
15                 (16)  costs incurred for containment, control, cleanup, or removal in                                   
16       connection with any unpermitted release of oil or a hazardous substance and any                                   
17       liability for damages imposed on the producer or explorer for that unpermitted release;                           
18       this paragraph does not apply to the cost of developing and maintaining an oil                                    
19       discharge prevention and contingency plan under AS 46.04.030;                                                     
20                 (17)  costs incurred to satisfy a work commitment under an exploration                                  
21       license under AS 38.05.132;                                                                                       
22                 (18)  that portion of expenditures, that would otherwise be qualified                                   
23       capital expenditures, [AS DEFINED IN AS 43.55.023,] incurred during a calendar                                    
24       year that are less than the product of $0.30 multiplied by the total taxable production                           
25       from each lease or property, in BTU equivalent barrels, during that calendar year,                                
26       except that, when a portion of a calendar year is subject to this provision, the                                  
27       expenditures and volumes shall be prorated within that calendar year;                                             
28                 (19)  costs incurred for repair, replacement, or deferred maintenance of                                
29       a facility, a pipeline, a structure, or equipment, other than a well, that results in or is                       
30       undertaken in response to a failure, problem, or event that results in an unscheduled                             
31       interruption of, or reduction in the rate of, oil or gas production; or costs incurred for                        
01       repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or                           
02       equipment, other than a well, that is undertaken in response to, or is otherwise                                  
03       associated with, an unpermitted release of a hazardous substance or of gas; however,                              
04       costs under this paragraph that would otherwise constitute lease expenditures under (a)                           
05       and (b) of this section may be treated as lease expenditures if the department                                    
06       determines that the repair or replacement is solely necessitated by an act of war, by an                          
07       unanticipated grave natural disaster or other natural phenomenon of an exceptional,                               
08       inevitable, and irresistible character, the effects of which could not have been                                  
09       prevented or avoided by the exercise of due care or foresight, or by an intentional or                            
10       negligent act or omission of a third party, other than a party or its agents in privity of                        
11       contract with, or employed by, the producer or an operator acting for the producer, but                           
12       only if the producer or operator, as applicable, exercised due care in operating and                              
13       maintaining the facility, pipeline, structure, or equipment, and took reasonable                                  
14       precautions against the act or omission of the third party and against the consequences                           
15       of the act or omission; in this paragraph,                                                                        
16                      (A)  "costs incurred for repair, replacement, or deferred                                          
17            maintenance of a facility, a pipeline, a structure, or equipment" includes costs                             
18            to dismantle and remove the facility, pipeline, structure, or equipment that is                              
19            being replaced;                                                                                              
20                      (B)  "hazardous substance" has the meaning given in                                                
21            AS 46.03.826;                                                                                                
22                      (C)  "replacement" includes renovation or improvement;                                             
23                 (20)  costs incurred to construct, acquire, or operate a refinery or crude                              
24       oil topping plant, regardless of whether the products of the refinery or topping plant                            
25       are used in oil or gas exploration, development, or production operations; however, if                            
26       a producer owns a refinery or crude oil topping plant that is located on or near the                              
27       premises of the producer's lease or property in the state and that processes the                                  
28       producer's oil produced from that lease or property into a product that the producer                              
29       uses in the operation of the lease or property in drilling for or producing oil or gas, the                       
30       producer's lease expenditures include the amount calculated by subtracting from the                               
31       fair market value of the product used the prevailing value, as determined under                                   
01       AS 43.55.020(f), of the oil that is processed;                                                                    
02                 (21)  costs of lobbying, public relations, public relations advertising, or                             
03       policy advocacy.                                                                                                  
04    * Sec. 38. AS 43.55.165(f) is amended to read:                                                                     
05            (f)  For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as                               
06       to expenditures incurred to explore for an oil or gas deposit located within land in                              
07       which an explorer does not own a working interest, the term "producer" in this section                            
08       includes "explorer."                                                                                              
09    * Sec. 39. AS 43.55.170(c) is amended to read:                                                                     
10            (c)  For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as                               
11       to expenditures incurred to explore for an oil or gas deposit located within land in                              
12       which an explorer does not own a working interest, the term "producer" in this section                            
13       includes "explorer."                                                                                              
14    * Sec. 40. AS 43.55.890 is amended to read:                                                                        
15            Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary                                
16       provision of AS 40.25.100, and regardless of whether the information is considered                                
17       under AS 43.05.230(e) to constitute statistics classified to prevent the identification of                        
18       particular returns or reports, the department may publish the following information                               
19       under this chapter, if aggregated among three or more producers or explorers, showing                             
20       by month or calendar year and by lease or property, unit, or area of the state:                                   
21                 (1)  the amount of oil or gas production;                                                               
22                 (2)  the amount of taxes levied under this chapter or paid under this                                   
23       chapter;                                                                                                          
24                 (3)  the effective tax rates under this chapter;                                                        
25                 (4)  the gross value of oil or gas at the point of production;                                          
26                 (5)  the transportation costs for oil or gas;                                                           
27                 (6)  qualified capital expenditures [, AS DEFINED IN AS 43.55.023];                                     
28                 (7)  exploration expenditures under AS 43.55.025;                                                       
29                 (8)  production tax values of oil or gas under AS 43.55.160;                                            
30                 (9)  lease expenditures under AS 43.55.165;                                                             
31                 (10)  adjustments to lease expenditures under AS 43.55.170;                                             
01                 (11)  tax credits applicable or potentially applicable against taxes levied                             
02       by this chapter.                                                                                                  
03    * Sec. 41. AS 43.55.895(b) is amended to read:                                                                     
04            (b)  A municipal entity subject to taxation because of this section                                          
05                 (1)  is eligible for [ALL] tax credits proportionate to its production                          
06       taxable under AS 43.55.011(e); and                                                                            
07                 (2)  shall allocate its lease expenditures in proportion to its                                     
08       production taxable under AS 43.55.011(e) [UNDER THIS CHAPTER TO THE                                           
09       SAME EXTENT AS ANY OTHER PRODUCER].                                                                               
10    * Sec. 42. AS 43.55.900 is amended by adding new paragraphs to read:                                               
11                 (26)  "qualified capital expenditure"                                                                   
12                      (A)  means, except as otherwise provided in (B) of this                                            
13            paragraph, an expenditure that is a lease expenditure under AS 43.55.165 and                                 
14            is                                                                                                           
15                           (i)  incurred for geological or geophysical exploration;                                      
16                           (ii)  treated as a capitalized expenditure under 26 U.S.C.                                    
17                 (Internal Revenue Code), as amended, regardless of elections made                                       
18                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
19                 treated as a capitalized expenditure for federal income tax reporting                                   
20                 purposes by the person incurring the expenditure; or                                                    
21                           (iii)  treated as a capitalized expenditure under 26 U.S.C.                                   
22                 (Internal Revenue Code), as amended, regardless of elections made                                       
23                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
24                 eligible to be deducted as an expense under 26 U.S.C. 263(c) (Internal                                  
25                 Revenue Code), as amended;                                                                              
26                      (B)  does not include an expenditure incurred to acquire an asset                                  
27            the cost of previously acquiring which was a lease expenditure under                                         
28            AS 43.55.165 or would have been a lease expenditure under AS 43.55.165 if it                                 
29            had been incurred after March 31, 2006, or that has previously been placed in                                
30            service in the state; an expenditure to acquire an asset is not excluded under                               
31            this subparagraph if not more than an immaterial portion of the asset meets a                                
01            description under this subparagraph; for purposes of this subparagraph, "asset"                              
02            includes geological, geophysical, and well data and interpretations;                                         
03                 (27)  "regular production" has the meaning given in AS 31.05.170.                                       
04    * Sec. 43. AS 43.70 is amended by adding new sections to read:                                                     
05            Sec. 43.70.025. Bond or cash deposit required for an oil or gas business. (a)                              
06       At the time of applying for a license under this chapter, an applicant engaged in the                             
07       business of oil or gas exploration, development, or production shall file a surety bond                           
08       in the amount of $250,000 running to the state, conditioned upon the applicant's                                  
09       promise to pay all                                                                                                
10                 (1)  taxes and contributions due the state and political subdivisions;                                  
11                 (2)  persons furnishing labor or material or renting or supplying                                       
12       equipment to the applicant; and                                                                                   
13                 (3)  amounts that may be adjudged against the applicant because of                                      
14       negligent or improper work or breach of contract while engaged in the business of oil                             
15       or gas exploration, development, or production.                                                                   
16            (b)  In lieu of the surety bond required under this section, the applicant may                               
17       file with the commissioner a cash deposit or other negotiable security acceptable to the                          
18       commissioner in the amount of $250,000.                                                                           
19            (c)  The bond required by this section remains in effect until cancelled by                                  
20       action of the surety, the principal, or if the commissioner finds that the business is                            
21       producing oil or gas in commercial quantities, by the commissioner.                                               
22            Sec. 43.70.028. Claims against an oil or gas business. (a) A person having a                               
23       claim against a person required to file a surety bond under AS 43.70.025 because of                               
24       the failure to pay a liability described in AS 43.70.025(a) may bring suit upon the                               
25       bond. A copy of the complaint shall be served by registered or certified mail on the                              
26       commissioner at the time suit is filed, and the commissioner shall maintain a record,                             
27       available for public inspection, of all suits commenced. This service on the                                      
28       commissioner shall constitute service on the surety, and the commissioner shall                                   
29       transmit the complaint or a copy of it to the surety within 72 hours after it is received.                        
30       The surety on the bond is not liable in an aggregate amount in excess of that named in                            
31       the bond, but if claims pending at any one time exceed the amount of the bond, the                                
01       claims shall be satisfied from the bond in the following order:                                                   
02                 (1)  labor, including employee benefits;                                                                
03                 (2)  taxes and contributions due the state, city, and borough, in that                                  
04       order;                                                                                                            
05                 (3)  material and equipment;                                                                            
06                 (4)  claims for negligent or improper work or breach of contract;                                       
07                 (5)  repair of public facilities.                                                                       
08            (b)  If a judgment is entered against a cash deposit, the commissioner, upon                                 
09       receipt of a certified copy of a final judgment, shall pay the judgment from the amount                           
10       of the deposit in accordance with the priorities set out in (a) of this section.                                  
11            (c)  An action described in (a) of this section may not be commenced on the                                  
12       bond more than three years after the cancellation of the bond.                                                    
13    * Sec. 44. AS 38.05.180(i); AS 41.09.010, 41.09.020, 41.09.030, 41.09.090;                                         
14 AS 43.20.053(j)(4); and AS 43.55.011(m) are repealed January 1, 2017.                                                   
15    * Sec. 45. AS 43.20.053; AS 43.55.023(a), 43.55.023(l), 43.55.023(n), 43.55.023(o),                                
16 43.55.028(i), 43.55.075(d)(1), 43.55.165(j), and 43.55.165(k) are repealed January 1, 2018.                             
17    * Sec. 46. The uncodified law of the State of Alaska is amended by adding a new section to                         
18 read:                                                                                                                   
19       APPLICABILITY. (a) 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. 13                              
21 of this Act, AS 43.55.028(e), as amended by sec. 27 of this Act, AS 43.55.028(j), as amended                            
22 by sec. 30 of this Act, and regulations related to a tax credit certificate purchase preference for                     
23 applicants with a workforce of resident workers and tax credit purchase rates, adopted under                            
24 AS 43.55.028(g), as amended by sec. 29 of this Act, apply to a purchase applied for on or                               
25 after the effective date of secs. 10, 11, 13, 27, 29, and 30 of this Act.                                               
26       (b)  AS 43.55.011(k), as amended by sec. 15 of this Act, applies to oil produced after                            
27 the effective date of sec. 15 of this Act.                                                                              
28    * Sec. 47. The uncodified law of the State of Alaska is amended by adding a new section to                         
29 read:                                                                                                                   
30       TRANSITION: QUALIFIED IN-STATE OIL REFINERY INFRASTRUCTURE                                                        
31 EXPENDITURES TAX CREDIT. (a) Notwithstanding the repeal of AS 43.20.053 by sec. 45                                      
01 of this Act and the amendments to AS 43.55.028(a) and (g) by secs. 26 and 29 of this Act, a                             
02 taxpayer who incurs a qualified infrastructure expenditure before the repeal of AS 43.20.053                            
03 by sec. 45 of this Act that qualifies for a qualified in-state oil refinery infrastructure                              
04 expenditures tax credit under AS 43.20.053 may apply for a tax credit under AS 43.20.053, as                            
05 that section read the day before the repeal of AS 43.20.053 by sec. 45 of this Act, apply for a                         
06 refund or payment under AS 43.55.028(a) and (g), as those sections read the day before the                              
07 effective date of secs. 26 and 29 of this Act, carry forward a credit subject to the limitations of                     
08 AS 43.20.053, as that section read the day before the repeal of AS 43.20.053 by sec. 45 of this                         
09 Act, or be subject to additional tax liability under AS 43.20.053, as that section read the day                         
10 before the repeal of AS 43.20.053 by sec. 45 of this Act.                                                               
11       (b)  The Department of Revenue may continue to apply and enforce AS 43.20.053, as                                 
12 that section read the day before the repeal of AS 43.20.053 by sec. 45 of this Act.                                     
13    * Sec. 48. The uncodified law of the State of Alaska is amended by adding a new section to                         
14 read:                                                                                                                   
15       TRANSITION: QUALIFIED CAPITAL EXPENDITURES AND WELL LEASE                                                         
16 EXPENDITURES. (a) Notwithstanding the repeal of AS 43.55.023(a), (l), (n), and (o) by sec.                              
17 45 of this Act, and the amendments to AS 43.55.023(d) and (e) by secs. 21 and 22 of this Act,                           
18 AS 43.55.029(a) by sec. 31 of this Act, AS 43.55.165(f) by sec. 38 of this Act, and                                     
19 AS 43.55.170(c) by sec. 39 of this Act, a taxpayer who incurs                                                           
20            (1)  a qualified capital expenditure before the repeal of AS 43.55.023(a) and                                
21 (o) by sec. 45 of this Act that qualifies for a qualified capital expenditure credit under                              
22 AS 43.55.023(a) and (o) may apply for a credit or transferable tax credit certificate under                             
23 AS 43.55.023 and assign the tax credit under AS 43.55.029, as those sections read on the day                            
24 before the repeal of AS 43.55.023(a) and (o) by sec. 45 of this Act;                                                    
25            (2)  a well lease expenditure before the repeal of AS 43.55.023(l) and (n) by                                
26 sec. 45 of this Act that qualifies for a well lease expenditure credit under AS 43.55.023(l) and                        
27 (n) may apply for a credit or transferable tax credit certificate under AS 43.55.023 and assign                         
28 the tax credit under AS 43.55.029, as those sections read on the day before the repeal of                               
29 AS 43.55.023(l) and (n) by sec. 45 of this Act.                                                                         
30       (b)  The Department of Revenue may continue to apply and enforce AS 43.55.023(a),                                 
31 (l), (n), and (o) and AS 43.55.029, as those sections read on the day before the repeal of                              
01 AS 43.55.023(a), (l), (n), and (o) by sec. 45 of this Act, for qualified capital expenditures and                       
02 well lease expenditures incurred before the repeal of AS 43.55.023(a), (l), (n), and (o) by sec.                        
03 45 of this Act.                                                                                                         
04    * Sec. 49. The uncodified law of the State of Alaska is amended by adding a new section to                         
05 read:                                                                                                                   
06       TRANSITION: CARRY FORWARD ANNUAL NET OPERATING LOSS CREDIT.                                                       
07 Notwithstanding the amendment of AS 43.55.023(b) by sec. 20 of this Act, a taxpayer who                                 
08 incurs a carried-forward annual loss before the effective date of sec. 20 of this Act that                              
09 qualifies for a carried-forward annual loss credit under AS 43.55.023(b) may apply for a                                
10 credit or tax credit certificate under AS 43.55.023(d) and assign the tax credit under                                  
11 AS 43.55.029, subject to the requirements of AS 43.55.160(d) and (e), as those sections read                            
12 on the day before the effective date of sec. 20 of this Act.                                                            
13    * Sec. 50. The uncodified law of the State of Alaska is amended by adding a new section to                         
14 read:                                                                                                                   
15       TRANSITION: LEASE EXPENDITURES FOR A CALENDAR YEAR AFTER                                                          
16 2006 AND BEFORE 2010. Notwithstanding AS 43.55.165(a), as amended by sec. 36 of this                                    
17 Act, and the repeal of AS 43.55.165(j) and (k) by sec. 45 of this Act, AS 43.55.165(j) and (k)                          
18 apply to a producer's total lease expenditures for a calendar year after 2006 and before 2010                           
19 under AS 43.55.165, as that section read on the day before the repeal of AS 43.55.165(j) and                            
20 (k) by sec. 45 of this Act.                                                                                             
21    * Sec. 51. The uncodified law of the State of Alaska is amended by adding a new section to                         
22 read:                                                                                                                   
23       TRANSITION: REGULATIONS. The Department of Revenue, the Department of                                             
24 Natural Resources, the Department of Commerce, Community, and Economic Development,                                     
25 and the Alaska Oil and Gas Conservation Commission may adopt regulations necessary to                                   
26 implement the changes made by this Act. The regulations take effect under AS 44.62                                      
27 (Administrative Procedure Act), but not before the effective date of the law implemented by                             
28 the regulation. The Department of Revenue shall adopt regulations governing the use of tax                              
29 credits under AS 43.55 for a calendar year for which the applicable tax credit provisions of                            
30 AS 43.55 differ as between parts of the year as a result of this Act.                                                   
31    * Sec. 52. The uncodified law of the State of Alaska is amended by adding a new section to                         
01 read:                                                                                                                   
02       TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any                                                     
03 contrary provision of AS 44.62.240,                                                                                     
04            (1)  if the Department of Revenue expressly designates in a regulation that the                              
05 regulation applies retroactively, a regulation adopted by the Department of Revenue to                                  
06 implement, interpret, make specific, or otherwise carry out this Act may apply retroactively to                         
07 the effective date of the law implemented by the regulation;                                                            
08            (2)  if the Department of Natural Resources expressly designates in the                                      
09 regulation that the regulation applies retroactively, a regulation adopted by the Department of                         
10 Natural Resources to implement, interpret, make specific, or otherwise carry out the statutory                          
11 amendments in this Act affecting the administration of oil and gas leases issued under                                  
12 AS 38.05.180(f)(3)(B), (D), or (E), to the extent the regulation relates to the treatment of oil                        
13 and gas production taxes in determining net profits under those leases, may apply                                       
14 retroactively to the effective date of the law implemented by the regulation.                                           
15    * Sec. 53. Sections 51 and 52 of this Act take effect immediately under AS 01.10.070(c).                           
16    * Sec. 54. Sections 20 - 22, 26, 29, 31 - 33, 36 - 40, 45, 47 - 50, and AS 43.55.900(26),                          
17 added by sec. 42 of this Act, take effect January 1, 2018.                                                              
18    * Sec. 55. Except as provided in secs. 53 and 54 of this Act, this Act takes effect January 1,                     
19 2017.