SB 130: "An Act relating to confidential information status and public record status of information in the possession of the Department of Revenue; relating to interest applicable to delinquent tax; relating to disclosure of oil and gas production tax credit information; relating to refunds for the gas storage facility tax credit, the liquefied natural gas storage facility tax credit, and the qualified in-state oil refinery infrastructure expenditures tax credit; relating to the minimum tax for certain oil and gas production; relating to the minimum tax calculation for monthly installment payments of estimated tax; relating to interest on monthly installment payments of estimated tax; relating to limitations for the application of tax credits; relating to oil and gas production tax credits for certain losses and expenditures; relating to limitations for nontransferable oil and gas production tax credits based on oil production and the alternative tax credit for oil and gas exploration; relating to purchase of tax credit certificates from the oil and gas tax credit fund; relating to a minimum for gross value at the point of production; relating to lease expenditures and tax credits for municipal entities; adding a definition for "qualified capital expenditure"; adding a definition for "outstanding liability to the state"; repealing oil and gas exploration incentive credits; repealing the limitation on the application of credits against tax liability for lease expenditures incurred before January 1, 2011; repealing provisions related to the monthly installment payments for estimated tax for oil and gas produced before January 1, 2014; repealing the oil and gas production tax credit for qualified capital expenditures and certain well expenditures; repealing the calculation for certain lease expenditures applicable before January 1, 2011; making conforming amendments; and providing for an effective date."
00 SENATE BILL NO. 130 01 "An Act relating to confidential information status and public record status of 02 information in the possession of the Department of Revenue; relating to interest 03 applicable to delinquent tax; relating to disclosure of oil and gas production tax credit 04 information; relating to refunds for the gas storage facility tax credit, the liquefied 05 natural gas storage facility tax credit, and the qualified in-state oil refinery 06 infrastructure expenditures tax credit; relating to the minimum tax for certain oil and 07 gas production; relating to the minimum tax calculation for monthly installment 08 payments of estimated tax; relating to interest on monthly installment payments of 09 estimated tax; relating to limitations for the application of tax credits; relating to oil and 10 gas production tax credits for certain losses and expenditures; relating to limitations for 11 nontransferable oil and gas production tax credits based on oil production and the 12 alternative tax credit for oil and gas exploration; relating to purchase of tax credit
01 certificates from the oil and gas tax credit fund; relating to a minimum for gross value at 02 the point of production; relating to lease expenditures and tax credits for municipal 03 entities; adding a definition for "qualified capital expenditure"; adding a definition for 04 "outstanding liability to the state"; repealing oil and gas exploration incentive credits; 05 repealing the limitation on the application of credits against tax liability for lease 06 expenditures incurred before January 1, 2011; repealing provisions related to the 07 monthly installment payments for estimated tax for oil and gas produced before 08 January 1, 2014; repealing the oil and gas production tax credit for qualified capital 09 expenditures and certain well expenditures; repealing the calculation for certain lease 10 expenditures applicable before January 1, 2011; making conforming amendments; and 11 providing for an effective date." 12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 13 * Section 1. AS 38.05.036(a) is amended to read: 14 (a) The department may conduct audits regarding royalty and net profits under 15 oil and gas contracts, agreements, or leases under this chapter and regarding costs 16 related to exploration licenses entered into under AS 38.05.131 - 38.05.134 and 17 exploration incentive credits under this chapter [OR UNDER AS 41.09]. For purposes 18 of audit under this section, 19 (1) the department may examine the books, papers, records, or 20 memoranda of a person regarding matters related to the audit; and 21 (2) the records and premises where a business is conducted shall be 22 open at all reasonable times for inspection by the department. 23 * Sec. 2. AS 38.05.036(b) is amended to read: 24 (b) The Department of Revenue may obtain from the department information 25 relating to royalty and net profits payments and to exploration incentive credits under 26 this chapter [OR UNDER AS 41.09], whether or not that information is confidential. 27 The Department of Revenue may use the information in carrying out its functions and
01 responsibilities under AS 43, and shall hold that information confidential to the extent 02 required by an agreement with the department or by AS 38.05.035(a)(8) [, 03 AS 41.09.010(d),] or AS 43.05.230. 04 * Sec. 3. AS 38.05.036(c) is amended to read: 05 (c) The department may obtain from the Department of Revenue all 06 information obtained under AS 43 relating to royalty and net profits and to exploration 07 incentive credits. The department may use the information for purposes of carrying out 08 its responsibilities and functions under this chapter [AND AS 41.09]. Information 09 made available to the department that was obtained under AS 43 is confidential and 10 subject to the provisions of AS 43.05.230. 11 * Sec. 4. AS 38.05.036(f) is amended to read: 12 (f) Except as otherwise provided in this section or in connection with official 13 investigations or proceedings of the department, it is unlawful for a current or former 14 officer, employee, or agent of the state to divulge information obtained by the 15 department as a result of an audit under this section that is required by an agreement 16 with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)] to be kept 17 confidential. 18 * Sec. 5. AS 38.05.036(g) is amended to read: 19 (g) Nothing in this section prohibits the publication of statistics in a manner 20 that maintains the confidentiality of information to the extent required by an 21 agreement with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)]. 22 * Sec. 6. AS 40.25.100(a) is amended to read: 23 (a) Information in the possession of the Department of Revenue that discloses 24 the particulars of the business or affairs of a taxpayer or other person, including 25 information under AS 38.05.020(b)(11) that is subject to a confidentiality agreement 26 under AS 38.05.020(b)(12), is not a matter of public record, except as provided in 27 AS 43.05.230(i) - (l) [AS 43.05.230(i) OR (k)] or for purposes of investigation and 28 law enforcement. The information shall be kept confidential except when its 29 production is required in an official investigation, administrative adjudication under 30 AS 43.05.405 - 43.05.499, or court proceeding. These restrictions do not prohibit the 31 publication of statistics presented in a manner that prevents the identification of
01 particular reports and items, prohibit the publication of tax lists showing the names of 02 taxpayers who are delinquent and relevant information that may assist in the collection 03 of delinquent taxes, or prohibit the publication of records, proceedings, and decisions 04 under AS 43.05.405 - 43.05.499. 05 * Sec. 7. AS 43.05.225 is amended to read: 06 Sec. 43.05.225. Interest. Unless otherwise provided, 07 (1) a delinquent tax under this title, 08 [(A) BEFORE JANUARY 1, 2014, BEARS INTEREST IN 09 EACH CALENDAR QUARTER AT THE RATE OF FIVE PERCENTAGE 10 POINTS ABOVE THE ANNUAL RATE CHARGED MEMBER BANKS 11 FOR ADVANCES BY THE 12TH FEDERAL RESERVE DISTRICT AS OF 12 THE FIRST DAY OF THAT CALENDAR QUARTER, OR AT THE 13 ANNUAL RATE OF 11 PERCENT, WHICHEVER IS GREATER, 14 COMPOUNDED QUARTERLY AS OF THE LAST DAY OF THAT 15 QUARTER; OR 16 (B) ON AND AFTER JANUARY 1, 2014,] bears interest in 17 each calendar quarter at the rate of seven [THREE] percentage points above 18 the annual rate charged member banks for advances by the 12th Federal 19 Reserve District as of the first day of that calendar quarter compounded 20 quarterly as of the last day of that quarter; 21 (2) the interest rate is 12 percent a year for 22 (A) delinquent fees payable under AS 05.15.095(c); and 23 (B) unclaimed property that is not timely paid or delivered, as 24 allowed by AS 34.45.470(a). 25 * Sec. 8. AS 43.05.230 is amended by adding a new subsection to read: 26 (l) The name of each person claiming a credit under AS 43.55, the aggregate 27 amount of credits under AS 43.55, except for the credit in AS 43.55.024(j), claimed by 28 the taxpayer in the calendar year, and a description of the taxpayer's activities that 29 generated the credits claimed are public information. 30 * Sec. 9. AS 43.20.046(e) is amended to read: 31 (e) The department may use available money in the oil and gas tax credit fund
01 established in AS 43.55.028 to make the refund applied for under (d) of this section in 02 whole or in part if the department finds that (1) the claimant does not have an 03 outstanding liability to the state [FOR UNPAID DELINQUENT TAXES UNDER 04 THIS TITLE]; and (2) after application of all available tax credits, the claimant's total 05 tax liability under this chapter for the calendar year in which the claim is made is zero. 06 [IN THIS SUBSECTION, "UNPAID DELINQUENT TAX" MEANS AN AMOUNT 07 OF TAX FOR WHICH THE DEPARTMENT HAS ISSUED AN ASSESSMENT 08 THAT HAS NOT BEEN PAID AND, IF CONTESTED, HAS NOT BEEN FINALLY 09 RESOLVED IN THE TAXPAYER'S FAVOR.] 10 * Sec. 10. AS 43.20.047(e) is amended to read: 11 (e) The department may use money available in the oil and gas tax credit fund 12 established in AS 43.55.028 to make a refund or payment under (d) of this section in 13 whole or in part if the department finds that 14 (1) the claimant does not have an outstanding liability to the state 15 [FOR UNPAID DELINQUENT TAXES UNDER THIS TITLE]; and 16 (2) after application of all available tax credits, the claimant's total tax 17 liability under this chapter for the calendar year in which the claim is made is zero. [IN 18 THIS SUBSECTION, "UNPAID DELINQUENT TAX" MEANS AN AMOUNT OF 19 TAX FOR WHICH THE DEPARTMENT HAS ISSUED AN ASSESSMENT THAT 20 HAS NOT BEEN PAID AND, IF CONTESTED, HAS NOT BEEN FINALLY 21 RESOLVED IN THE TAXPAYER'S FAVOR.] 22 * Sec. 11. AS 43.20.053(e) is amended to read: 23 (e) The department may use money available in the oil and gas tax credit fund 24 established in AS 43.55.028 to make a refund or payment under (d) of this section in 25 whole or in part if the department finds that 26 (1) the claimant does not have an outstanding liability to the state 27 [FOR UNPAID DELINQUENT TAXES UNDER THIS TITLE]; and 28 (2) after application of all available tax credits, the claimant's total tax 29 liability under this chapter for the calendar year in which the claim is made is zero. 30 * Sec. 12. AS 43.55.011(f) is repealed and reenacted to read: 31 (f) The levy of tax under (e) of this section for
01 (1) oil and gas produced before January 1, 2022, from leases or 02 properties that include land north of 68 degrees North latitude, other than gas subject 03 to (o) of this section, may not be less than five percent of the gross value at the point 04 of production; and 05 (2) oil produced on and after January 1, 2022, from leases or properties 06 that include land north of 68 degrees North latitude, may not be less than five percent 07 of the gross value at the point of production. 08 * Sec. 13. AS 43.55.020(a) is amended to read: 09 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 10 the tax as follows: 11 (1) for oil and gas produced before January 1, 2014, an installment 12 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 13 as allowed by law, is due for each month of the calendar year on the last day of the 14 following month; except as otherwise provided under (2) of this subsection, the 15 amount of the installment payment is the sum of the following amounts, less 1/12 of 16 the tax credits that are allowed by law to be applied against the tax levied by 17 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 18 not be less than zero: 19 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 20 produced from leases or properties in the state outside the Cook Inlet 21 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 22 the greater of 23 (i) zero; or 24 (ii) the sum of 25 percent and the tax rate calculated for 25 the month under AS 43.55.011(g) multiplied by the remainder obtained 26 by subtracting 1/12 of the producer's adjusted lease expenditures for the 27 calendar year of production under AS 43.55.165 and 43.55.170 that are 28 deductible for the oil and gas under AS 43.55.160 from the gross value 29 at the point of production of the oil and gas produced from the leases or 30 properties during the month for which the installment payment is 31 calculated;
01 (B) for oil and gas produced from leases or properties subject 02 to AS 43.55.011(f), the greatest of 03 (i) zero; 04 (ii) zero percent, one percent, two percent, three 05 percent, or four percent, as applicable, of the gross value at the point of 06 production of the oil and gas produced from the leases or properties 07 during the month for which the installment payment is calculated; or 08 (iii) the sum of 25 percent and the tax rate calculated for 09 the month under AS 43.55.011(g) multiplied by the remainder obtained 10 by subtracting 1/12 of the producer's adjusted lease expenditures for the 11 calendar year of production under AS 43.55.165 and 43.55.170 that are 12 deductible for the oil and gas under AS 43.55.160 from the gross value 13 at the point of production of the oil and gas produced from those leases 14 or properties during the month for which the installment payment is 15 calculated; 16 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 17 each lease or property, the greater of 18 (i) zero; or 19 (ii) the sum of 25 percent and the tax rate calculated for 20 the month under AS 43.55.011(g) multiplied by the remainder obtained 21 by subtracting 1/12 of the producer's adjusted lease expenditures for the 22 calendar year of production under AS 43.55.165 and 43.55.170 that are 23 deductible under AS 43.55.160 for the oil or gas, respectively, 24 produced from the lease or property from the gross value at the point of 25 production of the oil or gas, respectively, produced from the lease or 26 property during the month for which the installment payment is 27 calculated; 28 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 29 (i) the sum of 25 percent and the tax rate calculated for 30 the month under AS 43.55.011(g) multiplied by the remainder obtained 31 by subtracting 1/12 of the producer's adjusted lease expenditures for the
01 calendar year of production under AS 43.55.165 and 43.55.170 that are 02 deductible for the oil and gas under AS 43.55.160 from the gross value 03 at the point of production of the oil and gas produced from the leases or 04 properties during the month for which the installment payment is 05 calculated, but not less than zero; or 06 (ii) four percent of the gross value at the point of 07 production of the oil and gas produced from the leases or properties 08 during the month, but not less than zero; 09 (2) an amount calculated under (1)(C) of this subsection for oil or gas 10 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 11 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 12 applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but 13 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 14 amount of taxable gas produced during the month for the amount of taxable gas 15 produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or 16 (2)(A), as applicable, the amount of taxable oil produced during the month for the 17 amount of taxable oil produced during the calendar year; 18 (3) an installment payment of the estimated tax levied by 19 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 20 on the last day of the following month; the amount of the installment payment is the 21 sum of 22 (A) the applicable tax rate for oil provided under 23 AS 43.55.011(i), multiplied by the gross value at the point of production of the 24 oil taxable under AS 43.55.011(i) and produced from the lease or property 25 during the month; and 26 (B) the applicable tax rate for gas provided under 27 AS 43.55.011(i), multiplied by the gross value at the point of production of the 28 gas taxable under AS 43.55.011(i) and produced from the lease or property 29 during the month; 30 (4) any amount of tax levied by AS 43.55.011, net of any credits 31 applied as allowed by law, that exceeds the total of the amounts due as installment
01 payments of estimated tax is due on March 31 of the year following the calendar year 02 of production; 03 (5) for oil and gas produced on and after January 1, 2014, and before 04 January 1, 2022, an installment payment of the estimated tax levied by 05 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 06 month of the calendar year on the last day of the following month; except as otherwise 07 provided under (6) of this subsection, the amount of the installment payment is the 08 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 09 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 10 of the installment payment may not be less than zero: 11 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 12 produced from leases or properties in the state outside the Cook Inlet 13 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 14 the greater of 15 (i) zero; or 16 (ii) 35 percent multiplied by the remainder obtained by 17 subtracting 1/12 of the producer's adjusted lease expenditures for the 18 calendar year of production under AS 43.55.165 and 43.55.170 that are 19 deductible for the oil and gas under AS 43.55.160 from the gross value 20 at the point of production of the oil and gas produced from the leases or 21 properties during the month for which the installment payment is 22 calculated; 23 (B) for oil and gas produced from leases or properties subject 24 to AS 43.55.011(f), the greatest of 25 (i) zero; 26 (ii) five [ZERO PERCENT, ONE PERCENT, TWO 27 PERCENT, THREE PERCENT, OR FOUR] percent [, AS 28 APPLICABLE,] of the gross value at the point of production of the oil 29 and gas produced from the leases or properties during the month for 30 which the installment payment is calculated; or 31 (iii) 35 percent multiplied by the remainder obtained by
01 subtracting 1/12 of the producer's adjusted lease expenditures for the 02 calendar year of production under AS 43.55.165 and 43.55.170 that are 03 deductible for the oil and gas under AS 43.55.160 from the gross value 04 at the point of production of the oil and gas produced from those leases 05 or properties during the month for which the installment payment is 06 calculated, except that, for the purposes of this calculation, a reduction 07 from the gross value at the point of production may apply for oil and 08 gas subject to AS 43.55.160(f) or (g); 09 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 10 each lease or property, the greater of 11 (i) zero; or 12 (ii) 35 percent multiplied by the remainder obtained by 13 subtracting 1/12 of the producer's adjusted lease expenditures for the 14 calendar year of production under AS 43.55.165 and 43.55.170 that are 15 deductible under AS 43.55.160 for the oil or gas, respectively, 16 produced from the lease or property from the gross value at the point of 17 production of the oil or gas, respectively, produced from the lease or 18 property during the month for which the installment payment is 19 calculated; 20 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 21 (i) 35 percent multiplied by the remainder obtained by 22 subtracting 1/12 of the producer's adjusted lease expenditures for the 23 calendar year of production under AS 43.55.165 and 43.55.170 that are 24 deductible for the oil and gas under AS 43.55.160 from the gross value 25 at the point of production of the oil and gas produced from the leases or 26 properties during the month for which the installment payment is 27 calculated, but not less than zero; or 28 (ii) four percent of the gross value at the point of 29 production of the oil and gas produced from the leases or properties 30 during the month, but not less than zero; 31 (6) an amount calculated under (5)(C) of this subsection for oil or gas
01 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 02 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 03 applicable, for gas or set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, but 04 substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the 05 amount of taxable gas produced during the month for the amount of taxable gas 06 produced during the calendar year and substituting in AS 43.55.011(k)(1)(A) or 07 (2)(A), as applicable, the amount of taxable oil produced during the month for the 08 amount of taxable oil produced during the calendar year; 09 (7) for oil and gas produced on or after January 1, 2022, an installment 10 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 11 as allowed by law, is due for each month of the calendar year on the last day of the 12 following month; the amount of the installment payment is the sum of the following 13 amounts, less 1/12 of the tax credits that are allowed by law to be applied against the 14 tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment 15 payment may not be less than zero: 16 (A) for oil produced from leases or properties that include land 17 north of 68 degrees North latitude, the greatest of 18 (i) zero; 19 (ii) five [ZERO PERCENT, ONE PERCENT, TWO 20 PERCENT, THREE PERCENT, OR FOUR] percent [, AS 21 APPLICABLE,] of the gross value at the point of production of the oil 22 produced from the leases or properties during the month for which the 23 installment payment is calculated; or 24 (iii) 35 percent multiplied by the remainder obtained by 25 subtracting 1/12 of the producer's adjusted lease expenditures for the 26 calendar year of production under AS 43.55.165 and 43.55.170 that are 27 deductible for the oil under AS 43.55.160(h)(1) from the gross value at 28 the point of production of the oil produced from those leases or 29 properties during the month for which the installment payment is 30 calculated, except that, for the purposes of this calculation, a reduction 31 from the gross value at the point of production may apply for oil
01 subject to AS 43.55.160(f) or 43.55.160(f) and (g); 02 (B) for oil produced before or during the last calendar year 03 under AS 43.55.024(b) for which the producer could take a tax credit under 04 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 05 sedimentary basin, no part of which is north of 68 degrees North latitude, other 06 than leases or properties subject to AS 43.55.011(p), the greater of 07 (i) zero; or 08 (ii) 35 percent multiplied by the remainder obtained by 09 subtracting 1/12 of the producer's adjusted lease expenditures for the 10 calendar year of production under AS 43.55.165 and 43.55.170 that are 11 deductible for the oil under AS 43.55.160(h)(2) from the gross value at 12 the point of production of the oil produced from the leases or properties 13 during the month for which the installment payment is calculated; 14 (C) for oil and gas produced from leases or properties subject 15 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection, 16 the sum of 17 (i) 35 percent multiplied by the remainder obtained by 18 subtracting 1/12 of the producer's adjusted lease expenditures for the 19 calendar year of production under AS 43.55.165 and 43.55.170 that are 20 deductible for the oil under AS 43.55.160(h)(3) from the gross value at 21 the point of production of the oil produced from the leases or properties 22 during the month for which the installment payment is calculated, but 23 not less than zero; and 24 (ii) 13 percent of the gross value at the point of 25 production of the gas produced from the leases or properties during the 26 month, but not less than zero; 27 (D) for oil produced from leases or properties in the state, no 28 part of which is north of 68 degrees North latitude, other than leases or 29 properties subject to (B) or (C) of this paragraph, the greater of 30 (i) zero; or 31 (ii) 35 percent multiplied by the remainder obtained by
01 subtracting 1/12 of the producer's adjusted lease expenditures for the 02 calendar year of production under AS 43.55.165 and 43.55.170 that are 03 deductible for the oil under AS 43.55.160(h)(4) from the gross value at 04 the point of production of the oil produced from the leases or properties 05 during the month for which the installment payment is calculated; 06 (E) for gas produced from each lease or property in the state, 07 other than a lease or property subject to AS 43.55.011(p), 13 percent of the 08 gross value at the point of production of the gas produced from the lease or 09 property during the month for which the installment payment is calculated, but 10 not less than zero; 11 (8) an amount calculated under (7)(C) of this subsection may not 12 exceed four percent of the gross value at the point of production of the oil and gas 13 produced from leases or properties subject to AS 43.55.011(p) during the month for 14 which the installment payment is calculated; 15 (9) for purposes of the calculation under [(1)(B)(ii),] (5)(B)(ii) [,] and 16 (7)(A)(ii) of this subsection, the [APPLICABLE] percentage of the gross value at the 17 point of production is determined under AS 43.55.011(f)(1) or (2) but substituting the 18 phrase "month for which the installment payment is calculated" in AS 43.55.011(f)(1) 19 and (2) for the phrase "calendar year for which the tax is due." 20 * Sec. 14. AS 43.55.020(g) is repealed and reenacted to read: 21 (g) Notwithstanding any contrary provision of AS 43.05.225, an unpaid 22 amount of an installment payment required under (a)(3), (5), (6), or (7) of this section 23 that is not paid when due bears interest (1) at the rate provided for an underpayment 24 under 26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from 25 the date the installment payment is due until March 31 following the calendar year of 26 production; and (2) as provided for a delinquent tax under AS 43.05.225 after that 27 March 31, interest accrued under (1) of this subsection that remains unpaid after that 28 March 31 is treated as an addition to tax that bears interest under (2) of this subsection, 29 an unpaid amount of tax due under (a)(4) of this section that is not paid when due 30 bears interest as provided for a delinquent tax under AS 43.05.225. 31 * Sec. 15. AS 43.55.020(h) is amended to read:
01 (h) Notwithstanding any contrary provision of AS 43.05.280, 02 (1) an overpayment of an installment payment required under (a)(3) 03 [(a)(1), (2), (3)], (5), (6), or (7) of this section bears interest at the rate provided for an 04 overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as amended, 05 compounded daily, from the later of the date the installment payment is due or the date 06 the overpayment is made, until the earlier of 07 (A) the date it is refunded or is applied to an underpayment; or 08 (B) March 31 following the calendar year of production; 09 (2) except as provided under (1) of this subsection, interest with 10 respect to an overpayment is allowed only on any net overpayment of the payments 11 required under (a) of this section that remains after the later of March 31 following the 12 calendar year of production or the date that the statement required under 13 AS 43.55.030(a) is filed; 14 (3) interest is allowed under (2) of this subsection only from a date that 15 is 90 days after the later of March 31 following the calendar year of production or the 16 date that the statement required under AS 43.55.030(a) is filed; interest is not allowed 17 if the overpayment was refunded within the 90-day period; 18 (4) interest under (2) and (3) of this subsection is paid at the rate and in 19 the manner provided in AS 43.05.225(1). 20 * Sec. 16. AS 43.55.020(i) is amended to read: 21 (i) Notwithstanding any contrary provision of AS 43.05.225 or (g) or (h) of 22 this section, if the amount of a tax payment, including an installment payment, due 23 under (a)(3) - (5) [(a)(1) - (4)] of this section is affected by the retroactive application 24 of a regulation adopted under this chapter, the department shall determine whether the 25 retroactive application of the regulation caused an underpayment or an overpayment of 26 the amount due and adjust the interest due on the affected payment as follows: 27 (1) if an underpayment of the amount due occurred, the department 28 shall waive interest that would otherwise accrue for the underpayment before the first 29 day of the second month following the month in which the regulation became 30 effective, if 31 (A) the department determines that the producer's
01 underpayment resulted because the regulation was not in effect when the 02 payment was due; and 03 (B) the producer demonstrates that it made a good faith 04 estimate of its tax obligation in light of the regulations then in effect when the 05 payment was due and paid the estimated tax; 06 (2) if an overpayment of the amount due occurred and the department 07 determines that the producer's overpayment resulted because the regulation was not in 08 effect when the payment was due, the obligation for a refund for the overpayment does 09 not begin to accrue interest earlier than the following, as applicable: 10 (A) except as otherwise provided under (B) of this paragraph, 11 the first day of the second month following the month in which the regulation 12 became effective; 13 (B) 90 days after an amended statement under AS 43.55.030(a) 14 and an application to request a refund of production tax paid is filed, if the 15 overpayment was for a period for which an amended statement under 16 AS 43.55.030(a) was required to be filed before the regulation became 17 effective. 18 * Sec. 17. AS 43.55 is amended by adding a new section to read: 19 Sec. 43.55.022. Limitations on tax credits. (a) Notwithstanding any contrary 20 provision of AS 43.55, the application of tax credits under AS 43.55 is subject to the 21 limitations set out in this section. 22 (b) A tax credit or a fraction of a tax credit under AS 43.55.023, 43.55.024, 23 and 43.55.025 may not be subtracted in calculating an installment payment of 24 estimated tax required under AS 43.55.020(a) if the resulting amount of the 25 installment payment would be less than the amount in AS 43.55.020(a)(5)(B)(ii) or 26 43.55.020(a)(7)(A)(ii), as applicable. 27 (c) The total amount of tax credits under AS 43.55.023, 43.55.024, and 28 43.55.025 that may be applied against a tax levied by AS 43.55.011(e) for a calendar 29 year may not exceed the sum of the amount of the tax credits or fractions of tax credits 30 that are allowed under (b) of this section to be subtracted in calculating the installment 31 payments of estimated tax for each month in the calendar year.
01 * Sec. 18. AS 43.55.023(b) is amended to read: 02 (b) [BEFORE JANUARY 1, 2014, A PRODUCER OR EXPLORER MAY 03 ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A 04 CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES 05 INCURRED ON AND AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1, 06 2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS 07 LOCATED NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR 08 EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 45 09 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS.] For lease expenditures 10 incurred on and after January 1, 2016, to explore for, develop, or produce oil or gas 11 deposits located north of 68 degrees North latitude, a producer or explorer may elect to 12 take a tax credit in the amount of 35 percent of a carried-forward annual loss. For lease 13 expenditures incurred on or after January 1, 2014, to explore for, develop, or produce 14 oil or gas deposits located south of 68 degrees North latitude, a producer or explorer 15 may elect to take a tax credit in the amount of 25 percent of a carried-forward annual 16 loss. A credit under this subsection may be applied against a tax levied by 17 AS 43.55.011(e). For purposes of this subsection, a carried-forward annual loss is the 18 amount of a producer's or explorer's adjusted lease expenditures under AS 43.55.165 19 and 43.55.170 for a previous calendar year that was not deductible in calculating 20 production tax values for that calendar year under AS 43.55.160. For the purpose of 21 a credit under this subsection, any reduction under AS 43.55.160(f) or (g) is 22 added back to the calculation of production tax values for that calendar year 23 under AS 43.55.160 for the determination of a carried-forward annual loss. 24 * Sec. 19. AS 43.55.023(c) is amended to read: 25 (c) A credit or portion of a credit under this section may not be used to reduce 26 a person's tax liability under AS 43.55.011(e) for any calendar year below the amount 27 calculated under AS 43.55.011(f) [ZERO], and any unused credit or portion of a 28 credit not used under this subsection may be applied in a later calendar year. An 29 unused credit or portion of a credit may not be applied in a calendar year later 30 than the 10th calendar year in which the carried-forward annual loss for which 31 the credit is claimed was incurred.
01 * Sec. 20. AS 43.55.023(d) is amended to read: 02 (d) A person that is entitled to take a tax credit under this section that wishes 03 to transfer the unused credit to another person or obtain a cash payment under 04 AS 43.55.028 may apply to the department for a transferable tax credit certificate. An 05 application under this subsection must be in a form prescribed by the department and 06 must include supporting information and documentation that the department 07 reasonably requires. The department shall grant or deny an application, or grant an 08 application as to a lesser amount than that claimed and deny it as to the excess, not 09 later than 120 days after the latest of (1) March 31 of the year following the calendar 10 year in which the [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward 11 annual loss for which the credit is claimed was incurred; (2) the date the statement 12 required under AS 43.55.030(a) or (e) was filed for the calendar year in which the 13 [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward annual loss for which 14 the credit is claimed was incurred; or (3) the date the application was received by the 15 department. If, based on the information then available to it, the department is 16 reasonably satisfied that the applicant is entitled to a credit, the department shall issue 17 the applicant a transferable tax credit certificate for the amount of the credit. A 18 certificate issued under this subsection expires after 10 years from the calendar 19 year in which the carried-forward annual loss for which the credit is claimed was 20 incurred [DOES NOT EXPIRE]. 21 * Sec. 21. AS 43.55.023(e) is amended to read: 22 (e) A person to which a transferable tax credit certificate is issued under (d) of 23 this section may transfer the certificate to another person, and a transferee may further 24 transfer the certificate. Subject to the limitations set out in (b) - (d) [(a) - (d)] of this 25 section, and notwithstanding any action the department may take with respect to the 26 applicant under (g) of this section, the owner of a certificate may apply the credit or a 27 portion of the credit shown on the certificate only against a tax levied by 28 AS 43.55.011(e). However, a credit shown on a transferable tax credit certificate may 29 not be applied to reduce a transferee's total tax liability under AS 43.55.011(e) for oil 30 and gas produced during a calendar year to less than 80 percent of the tax that would 31 otherwise be due without applying that credit. Any portion of a credit not used under
01 this subsection may be applied in a later period. 02 * Sec. 22. AS 43.55.023 is amended by adding a new section to read: 03 (q) A producer or explorer shall comply with the notice and information 04 provision requirements in AS 43.55.025(f)(2) for the lease expenditures incurred 05 towards a credit under this section. The Department of Natural Resources shall hold 06 the confidential information under AS 43.55.025(f)(2)(C). For a producer or explorer 07 required to comply with the notice and information requirements of this section, the 08 Department of Natural Resources may publish the name of the producer or explorer, 09 the location of the well or seismic exploration, and the date on which information 10 required to be submitted under this section may be released. 11 * Sec. 23. AS 43.55.024(g) is amended to read: 12 (g) A tax credit authorized by (c) of this section may not be applied to reduce 13 a producer's tax liability for any calendar year under AS 43.55.011(e) below the 14 amount calculated under AS 43.55.011(f) [ZERO]. 15 * Sec. 24. AS 43.55.024(i) is amended to read: 16 (i) A producer may apply against the producer's tax liability for the calendar 17 year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under 18 AS 43.55.011(e) that meets one or more of the criteria in AS 43.55.160(f) or (g) and 19 that is produced during a calendar year after December 31, 2013. A tax credit 20 authorized by this subsection may not reduce a producer's tax liability for a calendar 21 year under AS 43.55.011(e) below the amount calculated under AS 43.55.011(f) 22 [ZERO]. 23 * Sec. 25. AS 43.55.025(i) is amended to read: 24 (i) For a production tax credit under this section, 25 (1) a credit may not be applied to reduce a taxpayer's tax liability under 26 AS 43.55.011(e) below the amount calculated under AS 43.55.011(f) [ZERO] for a 27 calendar year; and 28 (2) an amount of the production tax credit in excess of the amount that 29 may be applied for a calendar year under this subsection may be carried forward and 30 applied against the taxpayer's tax liability under AS 43.55.011(e) in one or more later 31 calendar years.
01 * Sec. 26. AS 43.55.028(e) is amended to read: 02 (e) The department, on the written application of a person to whom a 03 transferable tax credit certificate has been issued under AS 43.55.023(d) or former 04 AS 43.55.023(m) or to whom a production tax credit certificate has been issued under 05 AS 43.55.025(f), may use available money in the oil and gas tax credit fund to 06 purchase, in whole or in part, the certificate if the department finds that 07 (1) the calendar year of the purchase is not earlier than the first 08 calendar year for which the credit shown on the certificate would otherwise be allowed 09 to be applied against a tax; 10 (2) the applicant does not have an outstanding liability to the state 11 [FOR UNPAID DELINQUENT TAXES UNDER THIS TITLE]; 12 (3) the applicant's total tax liability under AS 43.55.011(e), after 13 application of all available tax credits, for the calendar year in which the application is 14 made is zero; 15 (4) the applicant's average daily production of oil and gas taxable 16 under AS 43.55.011(e) during the calendar year preceding the calendar year in which 17 the application is made was not more than 50,000 BTU equivalent barrels; [AND] 18 (5) the applicant's revenues generated from the applicant's oil and 19 gas business, including the revenues of the applicant's affiliates if the applicant is 20 part of an affiliated group, during the calendar year preceding the calendar year 21 in which the application is made were less than $10,000,000,000; 22 (6) the amount expended for the purchase and amounts previously 23 purchased from the applicant during the calendar year the sum of which would 24 not exceed $25,000,000; and 25 (7) the purchase is consistent with this section and regulations adopted 26 under this section. 27 * Sec. 27. AS 43.55.028 is amended by adding a new subsections to read: 28 (j) The percentage of a transferable tax credit certificate or a production tax 29 credit certificate purchased by the department may not exceed the percentage of the 30 applicant's workforce in the state in the previous calendar year that were resident 31 workers. The applicant's workforce in the state includes resident workers employed by
01 the applicant's contractors. An amount of a credit not purchased due to application of 02 this subsection may be applied against the applicant's tax liability under this chapter. 03 In this subsection, "resident worker" has the meaning given in AS 43.40.092(b). 04 * Sec. 28. AS 43.55.029(a) is amended to read: 05 (a) An explorer or producer that has applied for a production tax credit under 06 AS 43.55.023(b) [AS 43.55.023(a), (b), OR (l)] or 43.55.025(a) may make a present 07 assignment of the production tax credit certificate expected to be issued by the 08 department to a third-party assignee. The assignment may be made either when [AT 09 THE TIME] the application is filed with the department or not later than 30 days after 10 the date of filing with the department. Once a notice of assignment in compliance with 11 this section is filed with the department, the assignment is irrevocable and cannot be 12 modified by the explorer or producer without the written consent of the assignee 13 named in the assignment. If a production tax credit certificate is issued to the explorer 14 or producer, the notice of assignment remains effective and shall be filed with the 15 department by the explorer or producer together with any application for the 16 department to purchase the certificate under AS 43.55.028(e). 17 * Sec. 29. AS 43.55.030(a) is amended to read: 18 (a) A producer that produces oil or gas from a lease or property in the state 19 during a calendar year, whether or not any tax payment is due under AS 43.55.020(a) 20 for that oil or gas, shall file with the department on March 31 of the following year a 21 statement, under oath, in a form prescribed by the department, giving, with other 22 information required, the following: 23 (1) a description of each lease or property from which oil or gas was 24 produced, by name, legal description, lease number, or accounting codes assigned by 25 the department; 26 (2) the names of the producer and, if different, the person paying the 27 tax, if any; 28 (3) the gross amount of oil and the gross amount of gas produced from 29 each lease or property, separately identifying the gross amount of gas produced from 30 each oil and gas lease to which an effective election under AS 43.55.014(a) applies, 31 the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of
01 the gross amount of oil and gas owned by the producer; 02 (4) the gross value at the point of production of the oil and of the gas 03 produced from each lease or property owned by the producer and the costs of 04 transportation of the oil and gas; 05 (5) the name of the first purchaser and the price received for the oil and 06 for the gas, unless relieved from this requirement in whole or in part by the 07 department; 08 (6) the producer's qualified capital expenditures, [AS DEFINED IN 09 AS 43.55.023,] other lease expenditures under AS 43.55.165, and adjustments or other 10 payments or credits under AS 43.55.170; 11 (7) the production tax values of the oil and gas under AS 43.55.160(a) 12 or of the oil under AS 43.55.160(h), as applicable; 13 (8) any claims for tax credits to be applied; and 14 (9) calculations showing the amounts, if any, that were or are due 15 under AS 43.55.020(a) and interest on any underpayment or overpayment. 16 * Sec. 30. AS 43.55.030(e) is amended to read: 17 (e) An explorer or producer that incurs a lease expenditure under 18 AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar 19 year but does not produce oil or gas from a lease or property in the state during the 20 calendar year shall file with the department, on March 31 of the following year, a 21 statement, under oath, in a form prescribed by the department, giving, with other 22 information required, the following: 23 (1) the explorer's or producer's qualified capital expenditures, [AS 24 DEFINED IN AS 43.55.023,] other lease expenditures under AS 43.55.165, and 25 adjustments or other payments or credits under AS 43.55.170; and 26 (2) if the explorer or producer receives a payment or credit under 27 AS 43.55.170, calculations showing whether the explorer or producer is liable for a 28 tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount. 29 * Sec. 31. AS 43.55.150 is amended by adding a new subsection to read: 30 (d) The gross value at the point of production may not be less than zero. 31 * Sec. 32. AS 43.55.165(a) is amended to read:
01 (a) For [EXCEPT AS PROVIDED IN (j) AND (k) OF THIS SECTION, 02 FOR] purposes of this chapter, a producer's lease expenditures for a calendar year are 03 (1) costs, other than items listed in (e) of this section, that are 04 (A) incurred by the producer during the calendar year after 05 March 31, 2006, to explore for, develop, or produce oil or gas deposits located 06 within the producer's leases or properties in the state or, in the case of land in 07 which the producer does not own an operating right, operating interest, or 08 working interest, to explore for oil or gas deposits within other land in the 09 state; and 10 (B) allowed by the department by regulation, based on the 11 department's determination that the costs satisfy the following three 12 requirements: 13 (i) the costs must be incurred upstream of the point of 14 production of oil and gas; 15 (ii) the costs must be ordinary and necessary costs of 16 exploring for, developing, or producing, as applicable, oil or gas 17 deposits; and 18 (iii) the costs must be direct costs of exploring for, 19 developing, or producing, as applicable, oil or gas deposits; and 20 (2) a reasonable allowance for that calendar year, as determined under 21 regulations adopted by the department, for overhead expenses that are directly related 22 to exploring for, developing, or producing, as applicable, the oil or gas deposits. 23 * Sec. 33. AS 43.55.165(e) is amended to read: 24 (e) For purposes of this section, lease expenditures do not include 25 (1) depreciation, depletion, or amortization; 26 (2) oil or gas royalty payments, production payments, lease profit 27 shares, or other payments or distributions of a share of oil or gas production, profit, or 28 revenue, except that a producer's lease expenditures applicable to oil and gas produced 29 from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net 30 profit paid to the state under that lease; 31 (3) taxes based on or measured by net income;
01 (4) interest or other financing charges or costs of raising equity or debt 02 capital; 03 (5) acquisition costs for a lease or property or exploration license; 04 (6) costs arising from fraud, wilful misconduct, gross negligence, 05 violation of law, or failure to comply with an obligation under a lease, permit, or 06 license issued by the state or federal government; 07 (7) fines or penalties imposed by law; 08 (8) costs of arbitration, litigation, or other dispute resolution activities 09 that involve the state or concern the rights or obligations among owners of interests in, 10 or rights to production from, one or more leases or properties or a unit; 11 (9) costs incurred in organizing a partnership, joint venture, or other 12 business entity or arrangement; 13 (10) amounts paid to indemnify the state; the exclusion provided by 14 this paragraph does not apply to the costs of obtaining insurance or a surety bond from 15 a third-party insurer or surety; 16 (11) surcharges levied under AS 43.55.201 or 43.55.300; 17 (12) an expenditure otherwise deductible under (b) of this section that 18 is a result of an internal transfer, a transaction with an affiliate, or a transaction 19 between related parties, or is otherwise not an arm's length transaction, unless the 20 producer establishes to the satisfaction of the department that the amount of the 21 expenditure does not exceed the fair market value of the expenditure; 22 (13) an expenditure incurred to purchase an interest in any corporation, 23 partnership, limited liability company, business trust, or any other business entity, 24 whether or not the transaction is treated as an asset sale for federal income tax 25 purposes; 26 (14) a tax levied under AS 43.55.011 or 43.55.014; 27 (15) costs incurred for dismantlement, removal, surrender, or 28 abandonment of a facility, pipeline, well pad, platform, or other structure, or for the 29 restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in 30 conjunction with dismantlement, removal, surrender, or abandonment; a cost is not 31 excluded under this paragraph if the dismantlement, removal, surrender, or
01 abandonment for which the cost is incurred is undertaken for the purpose of replacing, 02 renovating, or improving the facility, pipeline, well pad, platform, or other structure; 03 (16) costs incurred for containment, control, cleanup, or removal in 04 connection with any unpermitted release of oil or a hazardous substance and any 05 liability for damages imposed on the producer or explorer for that unpermitted release; 06 this paragraph does not apply to the cost of developing and maintaining an oil 07 discharge prevention and contingency plan under AS 46.04.030; 08 (17) costs incurred to satisfy a work commitment under an exploration 09 license under AS 38.05.132; 10 (18) that portion of expenditures, that would otherwise be qualified 11 capital expenditures, [AS DEFINED IN AS 43.55.023,] incurred during a calendar 12 year that are less than the product of $0.30 multiplied by the total taxable production 13 from each lease or property, in BTU equivalent barrels, during that calendar year, 14 except that, when a portion of a calendar year is subject to this provision, the 15 expenditures and volumes shall be prorated within that calendar year; 16 (19) costs incurred for repair, replacement, or deferred maintenance of 17 a facility, a pipeline, a structure, or equipment, other than a well, that results in or is 18 undertaken in response to a failure, problem, or event that results in an unscheduled 19 interruption of, or reduction in the rate of, oil or gas production; or costs incurred for 20 repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or 21 equipment, other than a well, that is undertaken in response to, or is otherwise 22 associated with, an unpermitted release of a hazardous substance or of gas; however, 23 costs under this paragraph that would otherwise constitute lease expenditures under (a) 24 and (b) of this section may be treated as lease expenditures if the department 25 determines that the repair or replacement is solely necessitated by an act of war, by an 26 unanticipated grave natural disaster or other natural phenomenon of an exceptional, 27 inevitable, and irresistible character, the effects of which could not have been 28 prevented or avoided by the exercise of due care or foresight, or by an intentional or 29 negligent act or omission of a third party, other than a party or its agents in privity of 30 contract with, or employed by, the producer or an operator acting for the producer, but 31 only if the producer or operator, as applicable, exercised due care in operating and
01 maintaining the facility, pipeline, structure, or equipment, and took reasonable 02 precautions against the act or omission of the third party and against the consequences 03 of the act or omission; in this paragraph, 04 (A) "costs incurred for repair, replacement, or deferred 05 maintenance of a facility, a pipeline, a structure, or equipment" includes costs 06 to dismantle and remove the facility, pipeline, structure, or equipment that is 07 being replaced; 08 (B) "hazardous substance" has the meaning given in 09 AS 46.03.826; 10 (C) "replacement" includes renovation or improvement; 11 (20) costs incurred to construct, acquire, or operate a refinery or crude 12 oil topping plant, regardless of whether the products of the refinery or topping plant 13 are used in oil or gas exploration, development, or production operations; however, if 14 a producer owns a refinery or crude oil topping plant that is located on or near the 15 premises of the producer's lease or property in the state and that processes the 16 producer's oil produced from that lease or property into a product that the producer 17 uses in the operation of the lease or property in drilling for or producing oil or gas, the 18 producer's lease expenditures include the amount calculated by subtracting from the 19 fair market value of the product used the prevailing value, as determined under 20 AS 43.55.020(f), of the oil that is processed; 21 (21) costs of lobbying, public relations, public relations advertising, or 22 policy advocacy. 23 * Sec. 34. AS 43.55.165(f) is amended to read: 24 (f) For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as 25 to expenditures incurred to explore for an oil or gas deposit located within land in 26 which an explorer does not own a working interest, the term "producer" in this section 27 includes "explorer." 28 * Sec. 35. AS 43.55.170(c) is amended to read: 29 (c) For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as 30 to expenditures incurred to explore for an oil or gas deposit located within land in 31 which an explorer does not own a working interest, the term "producer" in this section
01 includes "explorer." 02 * Sec. 36. AS 43.55.890 is amended to read: 03 Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary 04 provision of AS 40.25.100, and regardless of whether the information is considered 05 under AS 43.05.230(e) to constitute statistics classified to prevent the identification of 06 particular returns or reports, the department may publish the following information 07 under this chapter, if aggregated among three or more producers or explorers, showing 08 by month or calendar year and by lease or property, unit, or area of the state: 09 (1) the amount of oil or gas production; 10 (2) the amount of taxes levied under this chapter or paid under this 11 chapter; 12 (3) the effective tax rates under this chapter; 13 (4) the gross value of oil or gas at the point of production; 14 (5) the transportation costs for oil or gas; 15 (6) qualified capital expenditures [, AS DEFINED IN AS 43.55.023]; 16 (7) exploration expenditures under AS 43.55.025; 17 (8) production tax values of oil or gas under AS 43.55.160; 18 (9) lease expenditures under AS 43.55.165; 19 (10) adjustments to lease expenditures under AS 43.55.170; 20 (11) tax credits applicable or potentially applicable against taxes levied 21 by this chapter. 22 * Sec. 37. AS 43.55.895(b) is amended to read: 23 (b) A municipal entity subject to taxation because of this section is eligible for 24 [ALL] tax credits proportionate to its production taxable under AS 43.55.011(e). A 25 municipal entity shall allocate its lease expenditures in proportion to its 26 production taxable under AS 43.55.011(e) [UNDER THIS CHAPTER TO THE 27 SAME EXTENT AS ANY OTHER PRODUCER]. 28 * Sec. 38. AS 43.55.900 is amended by adding a new paragraph to read: 29 (26) "qualified capital expenditure" 30 (A) means except as otherwise provided in (B) of this 31 paragraph, an expenditure that is a lease expenditure under AS 43.55.165 and
01 is 02 (i) incurred for geological or geophysical exploration; 03 (ii) treated as a capitalized expenditure under 26 U.S.C. 04 (Internal Revenue Code), as amended, regardless of elections made 05 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is 06 treated as a capitalized expenditure for federal income tax reporting 07 purposes by the person incurring the expenditure; or 08 (iii) treated as a capitalized expenditure under 26 U.S.C. 09 (Internal Revenue Code), as amended, regardless of elections made 10 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is 11 eligible to be deducted as an expense under 26 U.S.C. 263(c) (Internal 12 Revenue Code), as amended; 13 (B) does not include an expenditure incurred to acquire an asset 14 (i) the cost of previously acquiring which was a lease 15 expenditure under AS 43.55.165 or would have been a lease 16 expenditure under AS 43.55.165 if it had been incurred after March 31, 17 2006; or 18 (ii) that has previously been placed in service in the 19 state; an expenditure to acquire an asset is not excluded under this 20 paragraph if not more than an immaterial portion of the asset meets a 21 description under this paragraph; for purposes of this subparagraph, 22 "asset" includes geological, geophysical, and well data and 23 interpretations. 24 * Sec. 39. AS 43.99.950 is amended by adding a new paragraph to read: 25 (3) "outstanding liability to the state" means an amount of tax, interest, 26 penalty, fee, rental, royalty, or other charge for which the state has issued a demand 27 for payment that has not been paid when due and, if contested, has not been finally 28 resolved against the state. 29 * Sec. 40. AS 38.05.180(i); AS 41.09.010, 41.09.020, 41.09.030, 41.09.090; 30 AS 43.20.053(j)(4); AS 43.55.011(m), 43.55.020(a)(1), 43.55.020(a)(2), 43.55.023(a), 31 43.55.023(l), 43.55.023(n), AS 43.55.023(o), 43.55.028(i), 43.55.075(d)(1), 43.55.165(j), and
01 43.55.165(k) are repealed. 02 * Sec. 41. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 APPLICABILITY. (a) Section 17 of this Act applies to credits against the oil and gas 05 production tax levied by AS 43.55.011(e) for oil and gas produced on and after January 1, 06 2016. 07 (b) Sections 8 - 11 and 26 - 28 of this Act, and the repeal of AS 43.55.023(a) and (l) 08 in sec. 40 of this Act, apply to expenditures incurred on and after July 1, 2016. 09 (c) Sections 12, 13, and 16 of this Act apply to oil and gas produced on and after 10 July 1, 2016. 11 (d) For the purpose of determining the last calendar year that a credit or an unused 12 portion of a credit under AS 43.55.023(c) or credit certificate under AS 43.55.023(d) may be 13 carried forward due to the limitations in AS 43.55.023(c) and (d), as amended by secs. 19 and 14 20 of this Act, 15 (1) the carried-forward annual loss for a tax credit under AS 43.55.023(c), for 16 expenditures incurred before July 1, 2016, is considered to have been incurred on July 1, 17 2016; 18 (2) the carried-forward annual loss for a tax credit certificate under 19 AS 43.55.023(d), for expenditures incurred before July 1, 2016, is considered to have been 20 incurred on the later of July 1, 2016, or the date the tax credit certificate is issued. 21 * Sec. 42. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 TRANSITION: REGULATIONS. The Department of Revenue and the Department of 24 Natural Resources may adopt regulations necessary to implement the changes made by this 25 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 26 before the effective date of the law implemented by the regulation. The Department of 27 Revenue shall adopt regulations governing the use of tax credits under AS 43.55 for a 28 calendar year for which the applicable tax credit provisions of AS 43.55 differ as between 29 parts of the year as a result of this Act. 30 * Sec. 43. The uncodified law of the State of Alaska is amended by adding a new section to 31 read:
01 TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any 02 contrary provision of AS 44.62.240, 03 (1) if the Department of Revenue expressly designates in a regulation that the 04 regulation applies retroactively, a regulation adopted by the Department of Revenue to 05 implement, interpret, make specific, or otherwise carry out this Act may apply retroactively to 06 January 1, 2016 or July 1, 2016, as applicable; 07 (2) a regulation adopted by the Department of Natural Resources to 08 implement, interpret, make specific, or otherwise carry out statutory provisions for the 09 administration of oil and gas leases issued under AS 38.05.180(f)(3)(B), (D), or (E), to the 10 extent the regulation relates to the treatment of oil and gas production taxes in determining net 11 profits under those leases, may apply retroactively to January 1, 2016, or July 1, 2016, as 12 applicable, if the Department of Natural Resources expressly designates in the regulation that 13 the regulation applies retroactively to one of those dates. 14 * Sec. 44. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 RETROACTIVITY. Section. 17 of this Act is retroactive to January 1, 2016. 17 * Sec. 45. Sections 17 and 42 - 44 of this Act take effect immediately under 18 AS 01.10.070(c). 19 * Sec. 46. Except as provided in sec. 45 of this Act, this Act takes effect July 1, 2016.