txt

CSSB 130(RES): "An Act relating to interest applicable to delinquent tax; relating to the oil and gas production tax, tax payments, and credits; relating to refunds for the gas storage facility tax credit, the liquefied natural gas storage facility tax credit, and the qualified in-state oil refinery infrastructure expenditures tax credit; relating to oil and gas lease expenditures and production tax credits for municipal entities; relating to a bond or cash deposit required for an oil or gas business; and providing for an effective date."

00                       CS FOR SENATE BILL NO. 130(RES)                                                                   
01 "An Act relating to interest applicable to delinquent tax; relating to the oil and gas                                  
02 production tax, tax payments, and credits; relating to refunds for the gas storage facility                             
03 tax credit, the liquefied natural gas storage facility tax credit, and the qualified in-state                           
04 oil refinery infrastructure expenditures tax credit; relating to oil and gas lease                                      
05 expenditures and production tax credits for municipal entities; relating to a bond or                                   
06 cash deposit required for an oil or gas business; and providing for an effective date."                                 
07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
08    * Section 1. AS 38.05.036(a) is amended to read:                                                                   
09            (a)  The department may conduct audits regarding royalty and net profits under                               
10       oil and gas contracts, agreements, or leases under this chapter and regarding costs                               
11       related to exploration licenses entered into under AS 38.05.131 - 38.05.134 and                                   
12       exploration incentive credits under this chapter [OR UNDER AS 41.09]. For purposes                                
13       of an audit under this section,                                                                               
01                 (1)  the department may examine the books, papers, records, or                                          
02       memoranda of a person regarding matters related to the audit; and                                                 
03                 (2)  the records and premises where a business is conducted shall be                                    
04       open at all reasonable times for inspection by the department.                                                    
05    * Sec. 2. AS 38.05.036(b) is amended to read:                                                                      
06            (b)  The Department of Revenue may obtain from the department information                                    
07       relating to royalty and net profits payments and to exploration incentive credits under                           
08       this chapter [OR UNDER AS 41.09], whether or not that information is confidential.                                
09       The Department of Revenue may use the information in carrying out its functions and                               
10       responsibilities under AS 43, and shall hold that information confidential to the extent                          
11       required by an agreement with the department or by AS 38.05.035(a)(8) [,                                          
12       AS 41.09.010(d),] or AS 43.05.230.                                                                                
13    * Sec. 3. AS 38.05.036(c) is amended to read:                                                                      
14            (c)  The department may obtain from the Department of Revenue all                                            
15       information obtained under AS 43 relating to royalty and net profits and to exploration                           
16       incentive credits. The department may use the information for purposes of carrying out                            
17       its responsibilities and functions under this chapter [AND AS 41.09]. Information                                 
18       made available to the department that was obtained under AS 43 is confidential and                                
19       subject to the provisions of AS 43.05.230.                                                                        
20    * Sec. 4. AS 38.05.036(f) is amended to read:                                                                      
21            (f)  Except as otherwise provided in this section or in connection with official                             
22       investigations or proceedings of the department, it is unlawful for a current or former                           
23       officer, employee, or agent of the state to divulge information obtained by the                                   
24       department as a result of an audit under this section that is required by an agreement                            
25       with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)] to be kept                                      
26       confidential.                                                                                                     
27    * Sec. 5. AS 38.05.036(g) is amended to read:                                                                      
28            (g)  Nothing in this section prohibits the publication of statistics in a manner                             
29       that maintains the confidentiality of information to the extent required by an                                    
30       agreement with the department or by AS 38.05.035(a)(8) [OR AS 41.09.010(d)].                                      
31    * Sec. 6. AS 43.05.225 is amended to read:                                                                         
01            Sec. 43.05.225. Interest. Unless otherwise provided,                                                       
02                 (1)  a delinquent tax under this title,                                                                 
03                      (A)  before January 1, 2014, bears interest in each calendar                                       
04            quarter at the rate of five percentage points above the annual rate charged                                  
05            member banks for advances by the 12th Federal Reserve District as of the first                               
06            day of that calendar quarter, or at the annual rate of 11 percent, whichever is                              
07            greater, compounded quarterly as of the last day of that quarter; [OR]                                       
08                      (B)  on and after January 1, 2014, and before January 1, 2017,                                 
09            bears interest in each calendar quarter at the rate of three percentage points                               
10            above the annual rate charged member banks for advances by the 12th Federal                                  
11            Reserve District as of the first day of that calendar quarter, compounded                                
12            quarterly as of the last day of that quarter;                                                            
13                      (C)  on and after January 1, 2017,                                                             
14                           (i)  for the first three years after a tax becomes                                        
15                 delinquent, bears interest in each calendar quarter at the rate of                                  
16                 seven percentage points above the annual rate charged member                                        
17                 banks for advances by the 12th Federal Reserve District as of the                                   
18                 first day of that calendar quarter, compounded quarterly as of the                                  
19                 last day of that quarter; and                                                                       
20                           (ii)  after the first three years after a tax becomes                                     
21                 delinquent, does not bear interest;                                                                 
22                 (2)  the interest rate is 12 percent a year for                                                         
23                      (A)  delinquent fees payable under AS 05.15.095(c); and                                            
24                      (B)  unclaimed property that is not timely paid or delivered, as                                   
25            allowed by AS 34.45.470(a).                                                                                  
26    * Sec. 7. 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. 8. 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. 9. AS 43.20.053(e) is amended to read:                                                                      
20            (e)  Subject to the requirements in AS 43.55.028(j), the [THE] department                                
21       may use money available in the oil and gas tax credit fund established in AS 43.55.028                            
22       to make a refund or payment under (d) of this section in whole or in part if the                                  
23       department finds that,                                                                                        
24                 [(1)  THE CLAIMANT DOES NOT HAVE AN OUTSTANDING                                                         
25       LIABILITY TO THE STATE FOR UNPAID DELINQUENT TAXES UNDER THIS                                                     
26       TITLE; AND                                                                                                        
27                 (2)]  after application of all available tax credits, the claimant's total tax                          
28       liability under this chapter for the calendar year in which the claim is made is zero.                            
29    * Sec. 10. AS 43.55.011(e) is amended to read:                                                                     
30            (e)  There is levied on the producer of oil or gas a tax for all oil and gas                                 
31       produced each calendar year from each lease or property in the state, less any oil and                            
01       gas the ownership or right to which is exempt from taxation or constitutes a                                      
02       landowner's royalty interest or for which a tax is levied by AS 43.55.014, and less any                       
03       oil or gas to which (q) of this section applies. Except as otherwise provided under (f)                       
04       [, (j), (k), (o),] and (p) of this section, for oil and gas produced                                              
05                 (1)  before January 1, 2014, the tax is equal to the sum of                                             
06                      (A)  the annual production tax value of the taxable oil and gas                                    
07            as calculated under AS 43.55.160(a)(1) multiplied by 25 percent; and                                         
08                      (B)  the sum, over all months of the calendar year, of the tax                                     
09            amounts determined under (g) of this section;                                                                
10                 (2)  on and after January 1, 2014, and before January 1, 2022, the tax is                               
11       equal to the annual production tax value of the taxable oil and gas as calculated under                           
12       AS 43.55.160(a)(1) multiplied by 35 percent;                                                                      
13                 (3)  on and after January 1, 2022, the tax for                                                          
14                      (A)  oil is equal to the annual production tax value of the                                        
15            taxable oil as calculated under AS 43.55.160(h) multiplied by 35 percent;                                    
16                      (B)  gas is equal to 13 percent of the gross value at the point of                                 
17            production of the taxable gas; if the gross value at the point of production of                              
18            gas produced from a lease or property is less than zero, that gross value at the                             
19            point of production is considered zero for purposes of this subparagraph.                                    
20    * Sec. 11. AS 43.55.011(f) is amended to read:                                                                     
21            (f)  The levy of tax under (e) of this section for                                                           
22                 (1)  oil and gas produced before January 1, 2022, from leases or                                        
23       properties that include land north of 68 degrees North latitude [, OTHER THAN GAS                                 
24       SUBJECT TO (o) OF THIS SECTION,] may not be less than                                                             
25                      (A)  four percent of the gross value at the point of production                                    
26            when the average price per barrel for Alaska North Slope crude oil for sale on                               
27            the United States West Coast during the calendar year for which the tax is due                               
28            is more than $25;                                                                                            
29                      (B)  three percent of the gross value at the point of production                                   
30            when the average price per barrel for Alaska North Slope crude oil for sale on                               
31            the United States West Coast during the calendar year for which the tax is due                               
01            is over $20 but not over $25;                                                                                
02                      (C)  two percent of the gross value at the point of production                                     
03            when the average price per barrel for Alaska North Slope crude oil for sale on                               
04            the United States West Coast during the calendar year for which the tax is due                               
05            is over $17.50 but not over $20;                                                                             
06                      (D)  one percent of the gross value at the point of production                                     
07            when the average price per barrel for Alaska North Slope crude oil for sale on                               
08            the United States West Coast during the calendar year for which the tax is due                               
09            is over $15 but not over $17.50; or                                                                          
10                      (E)  zero percent of the gross value at the point of production                                    
11            when the average price per barrel for Alaska North Slope crude oil for sale on                               
12            the United States West Coast during the calendar year for which the tax is due                               
13            is $15 or less; and                                                                                          
14                 (2)  oil produced on and after January 1, 2022, from leases or properties                               
15       that include land north of 68 degrees North latitude, may not be less than                                        
16                      (A)  four percent of the gross value at the point of production                                    
17            when the average price per barrel for Alaska North Slope crude oil for sale on                               
18            the United States West Coast during the calendar year for which the tax is due                               
19            is more than $25;                                                                                            
20                      (B)  three percent of the gross value at the point of production                                   
21            when the average price per barrel for Alaska North Slope crude oil for sale on                               
22            the United States West Coast during the calendar year for which the tax is due                               
23            is over $20 but not over $25;                                                                                
24                      (C)  two percent of the gross value at the point of production                                     
25            when the average price per barrel for Alaska North Slope crude oil for sale on                               
26            the United States West Coast during the calendar year for which the tax is due                               
27            is over $17.50 but not over $20;                                                                             
28                      (D)  one percent of the gross value at the point of production                                     
29            when the average price per barrel for Alaska North Slope crude oil for sale on                               
30            the United States West Coast during the calendar year for which the tax is due                               
31            is over $15 but not over $17.50; or                                                                          
01                      (E)  zero percent of the gross value at the point of production                                    
02            when the average price per barrel for Alaska North Slope crude oil for sale on                               
03            the United States West Coast during the calendar year for which the tax is due                               
04            is $15 or less.                                                                                              
05    * Sec. 12. AS 43.55.011 is amended by adding a new subsection to read:                                             
06            (q)  On and after January 1, 2018,                                                                           
07                 (1)  no tax is levied on oil or gas produced from a lease or property in                                
08       the Cook Inlet sedimentary basin;                                                                                 
09                 (2)  a producer or explorer may not earn a tax credit under this chapter                                
10       for expenditures incurred in the Cook Inlet sedimentary basin.                                                    
11    * Sec. 13. AS 43.55.020(a) is amended to read:                                                                     
12            (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                             
13       the tax as follows:                                                                                               
14                 (1)  for oil and gas produced before January 1, 2014, an installment                                    
15       payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                            
16       as allowed by law, is due for each month of the calendar year on the last day of the                              
17       following month; [EXCEPT AS OTHERWISE PROVIDED UNDER (2) OF THIS                                                  
18       SUBSECTION,] the amount of the installment payment is the sum of the following                                    
19       amounts, less 1/12 of the tax credits that are allowed by law to be applied against the                           
20       tax levied by AS 43.55.011(e) for the calendar year, but the amount of the installment                            
21       payment may not be less than zero:                                                                                
22                      (A)  for oil and gas not subject to AS 43.55.011(p)                                            
23            [AS 43.55.011(o) OR (p)] produced from leases or properties in the state                                     
24            outside the Cook Inlet sedimentary basin, other than leases or properties                                    
25            subject to AS 43.55.011(f), the greater of                                                                   
26                           (i)  zero; or                                                                                 
27                           (ii)  the sum of 25 percent and the tax rate calculated for                                   
28                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
29                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
30                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
31                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
01                 at the point of production of the oil and gas produced from the leases or                               
02                 properties during the month for which the installment payment is                                        
03                 calculated;                                                                                             
04                      (B)  for oil and gas produced from leases or properties subject                                    
05            to AS 43.55.011(f), the greatest of                                                                          
06                           (i)  zero;                                                                                    
07                           (ii)  zero percent, one percent, two percent, three                                           
08                 percent, or four percent, as applicable, of the gross value at the point of                             
09                 production of the oil and gas produced from the leases or properties                                    
10                 during the month for which the installment payment is calculated; or                                    
11                           (iii)  the sum of 25 percent and the tax rate calculated for                                  
12                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
13                 by 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 and gas under AS 43.55.160 from the gross value                                  
16                 at the point of production of the oil and gas produced from those leases                                
17                 or properties during the month for which the installment payment is                                     
18                 calculated;                                                                                             
19                      (C)  [FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k),                                              
20            OR (o), FOR EACH LEASE OR PROPERTY, THE GREATER OF                                                           
21                           (i)  ZERO; OR                                                                                 
22                           (ii)  THE SUM OF 25 PERCENT AND THE TAX                                                       
23                 RATE CALCULATED FOR THE MONTH UNDER AS 43.55.011(g)                                                     
24                 MULTIPLIED BY THE REMAINDER OBTAINED BY                                                                 
25                 SUBTRACTING 1/12 OF THE PRODUCER'S ADJUSTED LEASE                                                       
26                 EXPENDITURES FOR THE CALENDAR YEAR OF PRODUCTION                                                        
27                 UNDER AS 43.55.165 AND 43.55.170 THAT ARE DEDUCTIBLE                                                    
28                 UNDER AS 43.55.160 FOR THE OIL OR GAS, RESPECTIVELY,                                                    
29                 PRODUCED FROM THE LEASE OR PROPERTY FROM THE                                                            
30                 GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL                                                       
31                 OR GAS, RESPECTIVELY, PRODUCED FROM THE LEASE OR                                                        
01                 PROPERTY DURING THE MONTH FOR WHICH THE                                                                 
02                 INSTALLMENT PAYMENT IS CALCULATED;                                                                      
03                      (D)]  for oil and gas subject to AS 43.55.011(p), the lesser of                                    
04                           (i)  the sum of 25 percent and the tax rate calculated for                                    
05                 the month under AS 43.55.011(g) multiplied by the remainder obtained                                    
06                 by subtracting 1/12 of the producer's adjusted lease expenditures for the                               
07                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
08                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
09                 at the point of production of the oil and gas produced from the leases or                               
10                 properties during the month for which the installment payment is                                        
11                 calculated, but not less than zero; or                                                                  
12                           (ii)  four percent of the gross value at the point of                                         
13                 production of the oil and gas produced from the leases or properties                                    
14                 during the month, but not less than zero;                                                               
15                 (2)  [AN AMOUNT CALCULATED UNDER (1)(C) OF THIS                                                         
16       SUBSECTION FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k), OR (o) MAY                                             
17       NOT EXCEED THE PRODUCT OBTAINED BY CARRYING OUT THE                                                               
18       CALCULATION SET OUT IN AS 43.55.011(j)(1) OR (2) OR 43.55.011(o), AS                                              
19       APPLICABLE, FOR GAS OR SET OUT IN AS 43.55.011(k)(1) OR (2), AS                                                   
20       APPLICABLE, FOR OIL, BUT SUBSTITUTING IN AS 43.55.011(j)(1)(A) OR                                                 
21       (2)(A) OR 43.55.011(o), AS APPLICABLE, THE AMOUNT OF TAXABLE GAS                                                  
22       PRODUCED DURING THE MONTH FOR THE AMOUNT OF TAXABLE GAS                                                           
23       PRODUCED DURING THE CALENDAR YEAR AND SUBSTITUTING IN                                                             
24       AS 43.55.011(k)(1)(A) OR (2)(A), AS APPLICABLE, THE AMOUNT OF                                                     
25       TAXABLE OIL PRODUCED DURING THE MONTH FOR THE AMOUNT OF                                                           
26       TAXABLE OIL PRODUCED DURING THE CALENDAR YEAR;                                                                    
27                 (3)]  an installment payment of the estimated tax levied by                                             
28       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
29       on the last day of the following month; the amount of the installment payment is the                              
30       sum of                                                                                                            
31                      (A)  the applicable tax rate for oil provided under                                                
01            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
02            oil taxable under AS 43.55.011(i) and produced from the lease or property                                    
03            during the month; and                                                                                        
04                      (B)  the applicable tax rate for gas provided under                                                
05            AS 43.55.011(i), multiplied by the gross value at the point of production of the                             
06            gas taxable under AS 43.55.011(i) and produced from the lease or property                                    
07            during the month;                                                                                            
08                 (3) [(4)]  any amount of tax levied by AS 43.55.011, net of any credits                             
09       applied as allowed by law, that exceeds the total of the amounts due as installment                               
10       payments of estimated tax is due on March 31 of the year following the calendar year                              
11       of production;                                                                                                    
12                 (4) [(5)]  for oil and gas produced on and after January 1, 2014, and                               
13       before January 1, 2022, an installment payment of the estimated tax levied by                                     
14       AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                
15       month of the calendar year on the last day of the following month; [EXCEPT AS                                     
16       OTHERWISE PROVIDED UNDER (6) OF THIS SUBSECTION,] the amount of the                                               
17       installment payment is the sum of the following amounts, less 1/12 of the tax credits                             
18       that are allowed by law to be applied against the tax levied by AS 43.55.011(e) for the                           
19       calendar year, but the amount of the installment payment may not be less than zero:                               
20                      (A)  for oil and gas not subject to AS 43.55.011(p)                                            
21            [AS 43.55.011(o) OR (p)] produced from leases or properties in the state                                     
22            outside the Cook Inlet sedimentary basin, other than leases or properties                                    
23            subject to AS 43.55.011(f), the greater of                                                                   
24                           (i)  zero; or                                                                                 
25                           (ii)  35 percent multiplied by the remainder obtained by                                      
26                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
27                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
28                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
29                 at the point of production of the oil and gas produced from the leases or                               
30                 properties during the month for which the installment payment is                                        
31                 calculated;                                                                                             
01                      (B)  for oil and gas produced from leases or properties subject                                    
02            to AS 43.55.011(f), the greatest of                                                                          
03                           (i)  zero;                                                                                    
04                           (ii)  zero percent, one percent, two percent, three                                           
05                 percent, or four percent, as applicable, of the gross value at the point of                             
06                 production of the oil and gas produced from the leases or properties                                    
07                 during the month for which the installment payment is calculated; or                                    
08                           (iii)  35 percent multiplied by the remainder obtained by                                     
09                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
10                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
11                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
12                 at the point of production of the oil and gas produced from those leases                                
13                 or properties during the month for which the installment payment is                                     
14                 calculated, except that, for the purposes of this calculation, a reduction                              
15                 from the gross value at the point of production may apply for oil and                                   
16                 gas subject to AS 43.55.160(f) or (g);                                                                  
17                      (C)  [FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k),                                              
18            OR (o), FOR EACH LEASE OR PROPERTY, THE GREATER OF                                                           
19                           (i)  ZERO; OR                                                                                 
20                           (ii)  35 PERCENT MULTIPLIED BY THE                                                            
21                 REMAINDER OBTAINED BY SUBTRACTING 1/12 OF THE                                                           
22                 PRODUCER'S ADJUSTED LEASE EXPENDITURES FOR THE                                                          
23                 CALENDAR YEAR OF PRODUCTION UNDER AS 43.55.165 AND                                                      
24                 43.55.170 THAT ARE DEDUCTIBLE UNDER AS 43.55.160 FOR                                                    
25                 THE OIL OR GAS, RESPECTIVELY, PRODUCED FROM THE                                                         
26                 LEASE OR PROPERTY FROM THE GROSS VALUE AT THE                                                           
27                 POINT OF PRODUCTION OF THE OIL OR GAS, RESPECTIVELY,                                                    
28                 PRODUCED FROM THE LEASE OR PROPERTY DURING THE                                                          
29                 MONTH FOR WHICH THE INSTALLMENT PAYMENT IS                                                              
30                 CALCULATED;                                                                                             
31                      (D)]  for oil and gas subject to AS 43.55.011(p), the lesser of                                    
01                           (i)  35 percent multiplied by the remainder obtained by                                       
02                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
03                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
04                 deductible for the oil and gas under AS 43.55.160 from the gross value                                  
05                 at the point of production of the oil and gas produced from the leases or                               
06                 properties during the month for which the installment payment is                                        
07                 calculated, but not less than zero; or                                                                  
08                           (ii)  four percent of the gross value at the point of                                         
09                 production of the oil and gas produced from the leases or properties                                    
10                 during the month, but not less than zero;                                                               
11                 (5) [(6)  AN AMOUNT CALCULATED UNDER (5)(C) OF THIS                                                 
12       SUBSECTION FOR OIL OR GAS SUBJECT TO AS 43.55.011(j), (k), OR (o) MAY                                             
13       NOT EXCEED THE PRODUCT OBTAINED BY CARRYING OUT THE                                                               
14       CALCULATION SET OUT IN AS 43.55.011(j)(1) OR (2) OR 43.55.011(o), AS                                              
15       APPLICABLE, FOR GAS OR SET OUT IN AS 43.55.011(k)(1) OR (2), AS                                                   
16       APPLICABLE, FOR OIL, BUT SUBSTITUTING IN AS 43.55.011(j)(1)(A) OR                                                 
17       (2)(A) OR 43.55.011(o), AS APPLICABLE, THE AMOUNT OF TAXABLE GAS                                                  
18       PRODUCED DURING THE MONTH FOR THE AMOUNT OF TAXABLE GAS                                                           
19       PRODUCED DURING THE CALENDAR YEAR AND SUBSTITUTING IN                                                             
20       AS 43.55.011(k)(1)(A) OR (2)(A), AS APPLICABLE, THE AMOUNT OF                                                     
21       TAXABLE OIL PRODUCED DURING THE MONTH FOR THE AMOUNT OF                                                           
22       TAXABLE OIL PRODUCED DURING THE CALENDAR YEAR;                                                                    
23                 (7)]  for oil and gas produced on or after January 1, 2022, an                                          
24       installment payment of the estimated tax levied by AS 43.55.011(e), net of any tax                                
25       credits applied as allowed by law, is due for each month of the calendar year on the                              
26       last day of the following month; the amount of the installment payment is the sum of                              
27       the following amounts, less 1/12 of the tax credits that are allowed by law to be                                 
28       applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                           
29       of the installment payment may not be less than zero:                                                             
30                      (A)  for oil produced from leases or properties that include land                                  
31            north of 68 degrees North latitude, the greatest of                                                          
01                           (i)  zero;                                                                                    
02                           (ii)  zero percent, one percent, two percent, three                                           
03                 percent, or four percent, as applicable, of the gross value at the point of                             
04                 production of the oil produced from the leases or properties during the                                 
05                 month for which the installment payment is calculated; or                                               
06                           (iii)  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 for the oil under AS 43.55.160(h)(1) from the gross value at                                 
10                 the point of production of the oil produced from those leases or                                        
11                 properties during the month for which the installment payment is                                        
12                 calculated, except that, for the purposes of this calculation, a reduction                              
13                 from the gross value at the point of production may apply for oil                                       
14                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
15                      (B)  for oil produced before or during the last calendar year                                      
16            under AS 43.55.024(b) for which the producer could take a tax credit under                                   
17            AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                               
18            sedimentary basin, no part of which is north of 68 degrees North latitude, other                             
19            than leases or properties subject to AS 43.55.011(p), the greater of                                         
20                           (i)  zero; or                                                                                 
21                           (ii)  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 under AS 43.55.160(h)(2) from the gross value at                                 
25                 the point of production of the oil produced from the leases or properties                               
26                 during the month for which the installment payment is calculated;                                       
27                      (C)  for oil and gas produced from leases or properties subject                                    
28            to AS 43.55.011(p), except as otherwise provided under (6) [(8)] of this                                 
29            subsection, the sum of                                                                                       
30                           (i)  35 percent multiplied by the remainder obtained by                                       
31                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
01                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
02                 deductible for the oil under AS 43.55.160(h)(3) from the gross value at                                 
03                 the point of production of the oil produced from the leases or properties                               
04                 during the month for which the installment payment is calculated, but                                   
05                 not less than zero; and                                                                                 
06                           (ii)  13 percent of the gross value at the point of                                           
07                 production of the gas produced from the leases or properties during the                                 
08                 month, but not less than zero;                                                                          
09                      (D)  for oil produced from leases or properties in the state, no                                   
10            part of which is north of 68 degrees North latitude, other than leases or                                    
11            properties subject to (B) or (C) of this paragraph, the greater of                                           
12                           (i)  zero; or                                                                                 
13                           (ii)  35 percent multiplied by the remainder obtained by                                      
14                 subtracting 1/12 of the producer's adjusted lease expenditures for the                                  
15                 calendar year of production under AS 43.55.165 and 43.55.170 that are                                   
16                 deductible for the oil under AS 43.55.160(h)(4) from the gross value at                                 
17                 the point of production of the oil produced from the leases or properties                               
18                 during the month for which the installment payment is calculated;                                       
19                      (E)  for gas produced from each lease or property in the state,                                    
20            other than a lease or property subject to AS 43.55.011(p), 13 percent of the                                 
21            gross value at the point of production of the gas produced from the lease or                                 
22            property during the month for which the installment payment is calculated, but                               
23            not less than zero;                                                                                          
24                 (6) [(8)]  an amount calculated under (5)(C) [(7)(C)] of this subsection                        
25       may not exceed four percent of the gross value at the point of production of the oil and                          
26       gas produced from leases or properties subject to AS 43.55.011(p) during the month                                
27       for which the installment payment is calculated;                                                                  
28                 (7) [(9)]  for purposes of the calculation under (1)(B)(ii), (4)(B)(ii)                         
29       [(5)(B)(ii)], and (5)(A)(ii) [(7)(A)(ii)] of this subsection, the applicable percentage of                    
30       the gross value at the point of production is determined under AS 43.55.011(f)(1) or                              
31       (2) but substituting the phrase "month for which the installment payment is calculated"                           
01       in AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is due."                            
02    * Sec. 14. AS 43.55.020(g) is amended to read:                                                                     
03            (g)  Notwithstanding any contrary provision of AS 43.05.225,                                                 
04                 (1)  before January 1, 2014, an unpaid amount of an installment                                         
05       payment required under (a)(1) and (2) [(a)(1) - (3)] of this section that is not paid                         
06       when due bears interest (A) at the rate provided for an underpayment under 26 U.S.C.                              
07       6621 (Internal Revenue Code), as amended, compounded daily, from the date the                                     
08       installment payment is due until March 31 following the calendar year of production,                              
09       and (B) as provided for a delinquent tax under AS 43.05.225 after that March 31;                                  
10       interest accrued under (A) of this paragraph that remains unpaid after that March 31 is                           
11       treated as an addition to tax that bears interest under (B) of this paragraph; an unpaid                          
12       amount of tax due under (a)(3) [(a)(4)] of this section that is not paid when due bears                       
13       interest as provided for a delinquent tax under AS 43.05.225;                                                     
14                 (2)  on and after January 1, 2014, an unpaid amount of an installment                                   
15       payment required under (a)(2), (4), or (5) [(a)(3), (5), (6), OR (7)] of this section that                    
16       is not paid when due bears interest (A) at the rate provided for an underpayment under                            
17       26 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the                                    
18       date the installment payment is due until March 31 following the calendar year of                                 
19       production, and (B) as provided for a delinquent tax under AS 43.05.225 after that                                
20       March 31; interest accrued under (A) of this paragraph that remains unpaid after that                             
21       March 31 is treated as an addition to tax that bears interest under (B) of this paragraph;                        
22       an unpaid amount of tax due under (a)(3) [(a)(4)] of this section that is not paid when                       
23       due bears interest as provided for a delinquent tax under AS 43.05.225.                                           
24    * Sec. 15. AS 43.55.020(h) is amended to read:                                                                     
25            (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                 
26                 (1)  an overpayment of an installment payment required under (a)(1),                                
27       (2), (4), or (5) [(a)(1), (2), (3), (5), (6), OR (7)] of this section bears interest at the rate              
28       provided for an overpayment under 26 U.S.C. 6621 (Internal Revenue Code), as                                      
29       amended, compounded daily, from the later of the date the installment payment is due                              
30       or the date the overpayment is made, until the earlier of                                                         
31                      (A)  the date it is refunded or is applied to an underpayment; or                                  
01                      (B)  March 31 following the calendar year of production;                                           
02                 (2)  except as provided under (1) of this subsection, interest with                                     
03       respect to an overpayment is allowed only on any net overpayment of the payments                                  
04       required under (a) of this section that remains after the later of March 31 following the                         
05       calendar year of production or the date that the statement required under                                         
06       AS 43.55.030(a) is filed;                                                                                         
07                 (3)  interest is allowed under (2) of this subsection only from a date that                             
08       is 90 days after the later of March 31 following the calendar year of production or the                           
09       date that the statement required under AS 43.55.030(a) is filed; interest is not allowed                          
10       if the overpayment was refunded within the 90-day period;                                                         
11                 (4)  interest under (2) and (3) of this subsection is paid at the rate and in                           
12       the manner provided in AS 43.05.225(1).                                                                           
13    * Sec. 16. AS 43.55.020(i) is amended to read:                                                                     
14            (i)  Notwithstanding any contrary provision of AS 43.05.225 or (g) or (h) of                                 
15       this section, if the amount of a tax payment, including an installment payment, due                               
16       under (a)(1) - (5) [(a)(1) - (4)] of this section is affected by the retroactive application                  
17       of a regulation adopted under this chapter, the department shall determine whether the                            
18       retroactive application of the regulation caused an underpayment or an overpayment of                             
19       the amount due and adjust the interest due on the affected payment as follows:                                    
20                 (1)  if an underpayment of the amount due occurred, the department                                      
21       shall waive interest that would otherwise accrue for the underpayment before the first                            
22       day of the second month following the month in which the regulation became                                        
23       effective, if                                                                                                     
24                      (A)  the department determines that the producer's                                                 
25            underpayment resulted because the regulation was not in effect when the                                      
26            payment was due; and                                                                                         
27                      (B)  the producer demonstrates that it made a good faith                                           
28            estimate of its tax obligation in light of the regulations then in effect when the                           
29            payment was due and paid the estimated tax;                                                                  
30                 (2)  if an overpayment of the amount due occurred and the department                                    
31       determines that the producer's overpayment resulted because the regulation was not in                             
01       effect when the payment was due, the obligation for a refund for the overpayment does                             
02       not begin to accrue interest earlier than the following, as applicable:                                           
03                      (A)  except as otherwise provided under (B) of this paragraph,                                     
04            the first day of the second month following the month in which the regulation                                
05            became effective;                                                                                            
06                      (B)  90 days after an amended statement under AS 43.55.030(a)                                      
07            and an application to request a refund of production tax paid is filed, if the                               
08            overpayment was for a period for which an amended statement under                                            
09            AS 43.55.030(a) was required to be filed before the regulation became                                        
10            effective.                                                                                                   
11    * Sec. 17. AS 43.55.023(a) is amended to read:                                                                     
12            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
13       expenditure as follows:                                                                                           
14                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
15       deductible lease expenditure for purposes of calculating the production tax value of oil                          
16       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
17       [AS 38.05.180(i), AS 41.09.010,] AS 43.20.043 [,] or AS 43.55.025, a producer or                                  
18       explorer that incurs a qualified capital expenditure may also elect to apply a tax credit                         
19       against a tax levied by AS 43.55.011(e) in the amount of 10 [20] percent of that                              
20       expenditure;                                                                                                      
21                 (2)  a producer or explorer may take a credit for a qualified capital                                   
22       expenditure incurred in connection with geological or geophysical exploration or in                               
23       connection with an exploration well only if the producer or explorer                                              
24                      (A)  agrees, in writing, to the applicable provisions of                                           
25            AS 43.55.025(f)(2); and                                                                                      
26                      (B)  submits to the Department of Natural Resources all data                                       
27            that would be required to be submitted under AS 43.55.025(f)(2);                                             
28                 (3)  a credit for a qualified capital expenditure incurred to explore for,                              
29       develop, or produce oil or gas deposits located north of 68 degrees North latitude may                            
30       be taken only if the expenditure is incurred before January 1, 2014.                                              
31    * Sec. 18. AS 43.55.023(a), as amended by sec. 17 of this Act, is amended to read:                                 
01            (a)  A producer or explorer may take a tax credit for a qualified capital                                    
02       expenditure as follows:                                                                                           
03                 (1)  notwithstanding that a qualified capital expenditure may be a                                      
04       deductible lease expenditure for purposes of calculating the production tax value of oil                          
05       and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under                                
06       AS 43.20.043 or AS 43.55.025, a producer or explorer that incurs a qualified capital                              
07       expenditure may also elect to apply a tax credit against a tax levied by                                          
08       AS 43.55.011(e) in the amount of 10 percent of that expenditure;                                                  
09                 (2)  a producer or explorer may take a credit for a qualified capital                                   
10       expenditure incurred in connection with geological or geophysical exploration or in                               
11       connection with an exploration well only if 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                 (3)  a credit for a qualified capital expenditure incurred to explore for,                              
17       develop, or produce oil or gas deposits located                                                                   
18                      (A)  north of 68 degrees North latitude may be taken only if the                               
19            expenditure is incurred before January 1, 2014;                                                          
20                      (B)  in the Cook Inlet sedimentary basin may be taken only                                     
21            if the expenditure is incurred before January 1, 2018.                                                   
22    * Sec. 19. AS 43.55.023(b) is amended to read:                                                                     
23            (b)  Before January 1, 2014, a producer or explorer may elect to take a tax                                  
24       credit in the amount of 25 percent of a carried-forward annual loss. For lease                                    
25       expenditures incurred on and after January 1, 2014, and before January 1, 2016, to                                
26       explore for, develop, or produce oil or gas deposits located north of 68 degrees North                            
27       latitude, a producer or explorer may elect to take a tax credit in the amount of 45                               
28       percent of a carried-forward annual loss. For lease expenditures incurred on and after                            
29       January 1, 2016, to explore for, develop, or produce oil or gas deposits located north                            
30       of 68 degrees North latitude, a producer or explorer may elect to take a tax credit in                            
31       the amount of 35 percent of a carried-forward annual loss. For lease expenditures                                 
01       incurred on or after January 1, 2014, and before January 1, 2017, to explore for,                             
02       develop, or produce oil or gas deposits located south of 68 degrees North latitude, a                             
03       producer or explorer may elect to take a tax credit in the amount of 25 percent of a                              
04       carried-forward annual loss. For lease expenditures incurred on or after January 1,                           
05       2017, to explore for, develop, or produce oil or gas deposits located south of 68                             
06       degrees North latitude, a producer or explorer may elect to take a tax credit in                              
07       the amount of 15 percent of a carried-forward annual loss. A credit under this                                
08       subsection may be applied against a tax levied by AS 43.55.011(e). For purposes of                                
09       this subsection,                                                                                                  
10                 (1)  a carried-forward annual loss is the amount of a producer's or                                 
11       explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                     
12       previous calendar year that was not deductible in calculating production tax values for                           
13       that calendar year under AS 43.55.160;                                                                        
14                 (2)  for lease expenditures incurred on or after January 1, 2017,                                   
15       any reduction under AS 43.55.160(f) or (g) is added back to the calculation of                                
16       production tax values for that calendar year under AS 43.55.160 for the                                       
17       determination of a carried-forward annual loss.                                                             
18    * Sec. 20. AS 43.55.023(b), as amended by sec. 19 of this Act, is amended to read:                                 
19            (b)  Before January 1, 2014, a producer or explorer may elect to take a tax                                  
20       credit in the amount of 25 percent of a carried-forward annual loss. For lease                                    
21       expenditures incurred on and after January 1, 2014, and before January 1, 2016, to                                
22       explore for, develop, or produce oil or gas deposits located north of 68 degrees North                            
23       latitude, a producer or explorer may elect to take a tax credit in the amount of 45                               
24       percent of a carried-forward annual loss. For lease expenditures incurred on and after                            
25       January 1, 2016, to explore for, develop, or produce oil or gas deposits located north                            
26       of 68 degrees North latitude, a producer or explorer may elect to take a tax credit in                            
27       the amount of 35 percent of a carried-forward annual loss. For lease expenditures                                 
28       incurred on or after January 1, 2014, and before January 1, 2017, to explore for,                                 
29       develop, or produce oil or gas deposits located south of 68 degrees North latitude, a                             
30       producer or explorer may elect to take a tax credit in the amount of 25 percent of a                              
31       carried-forward annual loss. For lease expenditures incurred on or after January 1,                               
01       2017, to explore for, develop, or produce oil or gas deposits located south of 68                                 
02       degrees North latitude, a producer or explorer may elect to take a tax credit in the                              
03       amount of 15 percent of a carried-forward annual loss, except that a credit for lease                         
04       expenditures incurred to explore for, develop, or produce oil or gas deposits                                 
05       located in the Cook Inlet sedimentary basin may only be taken if the expenditure                              
06       is incurred before January 1, 2018. A credit under this subsection may be applied                             
07       against a tax levied by AS 43.55.011(e). For purposes of this subsection,                                         
08                 (1)  a carried-forward annual loss is the amount of a producer's or                                   
09       explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                     
10       previous calendar year that was not deductible in calculating production tax values for                           
11       that calendar year under AS 43.55.160;                                                                            
12                 (2)  for lease expenditures incurred on or after January 1, 2017, any                                   
13       reduction under AS 43.55.160(f) or (g) is added back to the calculation of production                             
14       tax values for that calendar year under AS 43.55.160 for the determination of a                                   
15       carried-forward annual loss.                                                                                      
16    * Sec. 21. AS 43.55.023(d) is amended to read:                                                                     
17            (d)  A person that is entitled to take a tax credit under this section that wishes                           
18       to transfer the unused credit to another person or obtain a cash payment under                                    
19       AS 43.55.028 may apply to the department for a transferable tax credit certificate. An                            
20       application under this subsection must be in a form prescribed by the department and                              
21       must include supporting information and documentation that the department                                         
22       reasonably requires. The department shall grant or deny an application, or grant an                               
23       application as to a lesser amount than that claimed and deny it as to the excess, not                             
24       later than 120 days after the latest of (1) March 31 of the year following the calendar                           
25       year in which the [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward                                              
26       annual loss for which the credit is claimed was incurred; (2) the date the statement                              
27       required under AS 43.55.030(a) or (e) was filed for the calendar year in which the                                
28       [QUALIFIED CAPITAL EXPENDITURE OR] carried-forward annual loss for which                                          
29       the credit is claimed was incurred; or (3) the date the application was received by the                           
30       department. If, based on the information then available to it, the department is                                  
31       reasonably satisfied that the applicant is entitled to a credit, the department shall issue                       
01       the applicant a transferable tax credit certificate for the amount of the credit. A                               
02       certificate issued under this subsection does not expire.                                                         
03    * Sec. 22. AS 43.55.023(e) is amended to read:                                                                     
04            (e)  A person to which a transferable tax credit certificate is issued under (d) of                          
05       this section may transfer the certificate to another person, and a transferee may further                         
06       transfer the certificate. Subject to the limitations set out in former (a) of this section                    
07       and (b) - (d) [(a) - (d)] of this section, and notwithstanding any action the department                      
08       may take with respect to the applicant under (g) of this section, the owner of a                                  
09       certificate may apply the credit or a portion of the credit shown on the certificate only                         
10       against a tax levied by AS 43.55.011(e). However, a credit shown on a transferable tax                            
11       credit certificate may not be applied to reduce a transferee's total tax liability under                          
12       AS 43.55.011(e) for oil and gas produced during a calendar year to less than 80                                   
13       percent of the tax that would otherwise be due without applying that credit. Any                                  
14       portion of a credit not used under this subsection may be applied in a later period.                              
15    * Sec. 23. AS 43.55.023(l) is amended to read:                                                                     
16            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
17       expenditure incurred in the state south of 68 degrees North latitude after June 30,                               
18       2010, as follows:                                                                                                 
19                 (1)  notwithstanding that a well lease expenditure incurred in the state                                
20       south of 68 degrees North latitude may be a deductible lease expenditure for purposes                             
21       of calculating the production tax value of oil and gas under AS 43.55.160(a), unless a                            
22       credit for that expenditure is taken under (a) of this section, [AS 38.05.180(i),                                 
23       AS 41.09.010,] AS 43.20.043, or AS 43.55.025, a producer or explorer that incurs a                                
24       well lease expenditure in the state south of 68 degrees North latitude may elect to                               
25       apply a tax credit against a tax levied by AS 43.55.011(e) in the amount of                                       
26                      (A)  40 percent of that expenditure incurred before January 1,                           
27            2017;                                                                                                    
28                      (B)  20 percent of that expenditure incurred on or after                                       
29            January 1, 2017 [; A TAX CREDIT UNDER THIS PARAGRAPH MAY BE                                              
30            APPLIED FOR A SINGLE CALENDAR YEAR];                                                                         
31                 (2)  a producer or explorer may take a credit for a well lease                                          
01       expenditure incurred in the state south of 68 degrees North latitude in connection with                           
02       geological or geophysical exploration or in connection with an exploration well only if                           
03       the producer or explorer                                                                                          
04                      (A)  agrees, in writing, to the applicable provisions of                                           
05            AS 43.55.025(f)(2); and                                                                                      
06                      (B)  submits to the Department of Natural Resources all data                                       
07            that would be required to be submitted under AS 43.55.025(f)(2).                                             
08    * Sec. 24. AS 43.55.023(l), as amended by sec. 23 of this Act, is amended to read:                                 
09            (l)  A producer or explorer may apply for a tax credit for a well lease                                      
10       expenditure incurred in the state south of 68 degrees North latitude after June 30,                               
11       2010, as follows:                                                                                                 
12                 (1)  notwithstanding that a well lease expenditure incurred in the state                                
13       south of 68 degrees North latitude may be a deductible lease expenditure for purposes                             
14       of calculating the production tax value of oil and gas under AS 43.55.160(a), unless a                            
15       credit for that expenditure is taken under (a) of this section, AS 43.20.043, or                                  
16       AS 43.55.025, a producer or explorer that incurs a well lease expenditure in the state                            
17       south of 68 degrees North latitude may elect to apply a tax credit against a tax levied                           
18       by AS 43.55.011(e) in the amount of                                                                               
19                      (A)  40 percent of that expenditure incurred before January 1,                                     
20            2017;                                                                                                        
21                      (B)  20 percent of that expenditure incurred on or after                                           
22            January 1, 2017;                                                                                           
23                 (2)  a producer or explorer may take a credit for a well lease                                          
24       expenditure incurred in the state south of 68 degrees North latitude in connection with                           
25       geological or geophysical exploration or in connection with an exploration well only if                           
26       the producer or explorer                                                                                          
27                      (A)  agrees, in writing, to the applicable provisions of                                           
28            AS 43.55.025(f)(2); and                                                                                      
29                      (B)  submits to the Department of Natural Resources all data                                       
30            that would be required to be submitted under AS 43.55.025(f)(2);                                         
31                      (3)  a credit for a well lease expenditure incurred to explore                                 
01            for, develop, or produce oil or gas deposits located in the Cook Inlet                                   
02            sedimentary basin may be taken only if the expenditure is incurred before                                
03            January 1, 2018.                                                                                         
04    * Sec. 25. AS 43.55.025(m) is amended to read:                                                                     
05            (m)  The persons that drill the first four exploration wells in the state and                                
06       within the areas described in (o) of this section on state lands, private lands, or federal                       
07       onshore lands for the purpose of discovering oil or gas that penetrate and evaluate a                             
08       prospect in a basin described in (o) of this section are eligible for a credit under (a)(6)                       
09       of this section. A credit under this subsection may not be taken for more than two                                
10       exploration wells in a single area described in (o)(1) - (6) of this section. Exploration                         
11       expenditures eligible for the credit in this subsection must be incurred for work                                 
12       performed after June 1, 2012, and before July 1, 2016, except that expenditures to                            
13       complete an exploration well that was spudded but not completed before July 1,                                
14       2016, are eligible for the credit under this subsection. A person planning to drill an                        
15       exploration well on private land and to apply for a credit under this subsection shall                            
16       obtain written consent from the owner of the oil and gas interest for the full public                             
17       release of all well data after the expiration of the confidentiality period applicable to                         
18       information collected under (f) of this section. The written consent of the owner of the                          
19       oil and gas interest must be submitted to the commissioner of natural resources before                            
20       approval of the proposed exploration well. In addition to the requirements in (c)(1),                             
21       (c)(2)(A), and (c)(2)(C) of this section and submission of the written consent of the                             
22       owner of the oil and gas interest, a person planning to drill an exploration well shall                           
23       obtain approval from the commissioner of natural resources before the well is                                     
24       spudded. The commissioner of natural resources shall make a written determination                                 
25       approving or rejecting an exploration well within 60 days after receiving the request                             
26       for approval or as soon as is practicable thereafter. Before approving the exploration                            
27       well, the commissioner of natural resources shall consider the following: the location                            
28       of the well; the proximity to a community in need of a local energy source; the                                   
29       proximity of existing infrastructure; the experience and safety record of the explorer in                         
30       conducting operations in remote or roadless areas; the projected cost schedule;                                   
31       whether seismic mapping and seismic data sufficiently identify a particular trap for                              
01       exploration; whether the targeted and planned depth and range are designed to                                     
02       penetrate and fully evaluate the hydrocarbon potential of the proposed prospect and                               
03       reach the level below which economic hydrocarbon reservoirs are likely to be found,                               
04       or reach 12,000 feet or more true vertical depth; and whether the exploration plan                                
05       provides for a full evaluation of the wellbore below surface casing to the depth of the                           
06       well. Whether the exploration well for which a credit is requested under this                                     
07       subsection is located within an area and a basin described under (o) of this section                              
08       shall be determined by the commissioner of natural resources and reported to the                                  
09       commissioner. A taxpayer that obtains a credit under this subsection may not claim a                              
10       tax credit under AS 43.55.023 or another provision in this section for the same                                   
11       exploration expenditure.                                                                                          
12    * Sec. 26. AS 43.55.028(e) is amended to read:                                                                     
13            (e)  The department, on the written application of a person to whom a                                        
14       transferable tax credit certificate has been issued under AS 43.55.023(d) or former                               
15       AS 43.55.023(m) or to whom a production tax credit certificate has been issued under                              
16       AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                                    
17       purchase, in whole or in part, the certificate. The department may not purchase a                             
18       total of more than $85,000,000 in tax credit certificates from a person in a                                  
19       calendar year. Before purchasing a certificate or part of a certificate, [IF] the                             
20       department shall find [FINDS] that                                                                            
21                 (1)  the calendar year of the purchase is not earlier than the first                                    
22       calendar year for which the credit shown on the certificate would otherwise be allowed                            
23       to be applied against a tax;                                                                                      
24                 (2)  the application is not the result of the division of a single entity                           
25       into multiple entities that would reasonably be expected to apply as a single entity                          
26       if the $85,000,000 limitation in this subsection did not exist [APPLICANT DOES                                
27       NOT HAVE AN OUTSTANDING LIABILITY TO THE STATE FOR UNPAID                                                         
28       DELINQUENT TAXES UNDER THIS TITLE];                                                                               
29                 (3)  the applicant's total tax liability under AS 43.55.011(e), after                                   
30       application of all available tax credits, for the calendar year in which the application is                       
31       made is zero;                                                                                                     
01                 (4)  the applicant's average daily production of oil and gas taxable                                    
02       under AS 43.55.011(e) during the calendar year preceding the calendar year in which                               
03       the application is made was not more than 50,000 BTU equivalent barrels; and                                      
04                 (5)  the purchase is consistent with this section and regulations adopted                               
05       under this section.                                                                                               
06    * Sec. 27. AS 43.55.028(g) is amended to read:                                                                     
07            (g)  The department shall [MAY] adopt regulations to carry out the purposes                              
08       of this section, including standards and procedures to allocate available money among                             
09       applications for purchases under this chapter and claims for refunds and payments                                 
10       under AS 43.20.046, 43.20.047, or 43.20.053 when the total amount of the                                          
11       applications for purchase and claims for refund exceed the amount of available money                              
12       in the fund. The regulations adopted by the department                                                            
13                 (1)  may not, when allocating available money in the fund under this                                
14       section, distinguish an application for the purchase of a credit certificate issued under                         
15       former AS 43.55.023(m) or a claim for a refund or payment under AS 43.20.046,                                     
16       43.20.047, or 43.20.053;                                                                                      
17                 (2)  must grant a preference to an applicant if at least 75 percent of                              
18       the applicant's workforce in the state in the previous calendar year was                                      
19       composed of resident workers; in this paragraph, "resident worker" has the                                    
20       meaning given in AS 43.40.092(b).                                                                             
21    * Sec. 28. AS 43.55.028 is amended by adding a new subsection to read:                                             
22            (j)  If an applicant or claimant has an outstanding liability to the state directly                          
23       related to the applicant's or claimant's oil or gas exploration, development, or                                  
24       production and the department has not previously reduced the amount paid to that                                  
25       applicant or claimant for a certificate or refund because of that outstanding liability,                          
26       the department may purchase only that portion of a certificate or pay only that portion                           
27       of a refund that exceeds the outstanding liability. With the applicant's or claimant's                            
28       consent, the department may apply the amount by which the department reduced its                                  
29       purchase of a certificate or payment for a refund because of an outstanding liability to                          
30       satisfy the outstanding liability. Satisfaction of an outstanding liability under this                            
31       subsection does not affect the applicant's ability to contest that liability. The                                 
01       department may enter into contracts or agreements with another department to which                                
02       the outstanding liability is owed. In this subsection, "outstanding liability" means an                           
03       amount of tax, interest, penalty, fee, rental, royalty, or other charge for which the state                       
04       has issued a demand for payment that has not been paid when due and, if contested,                                
05       has not been finally resolved against the state.                                                                  
06    * Sec. 29. AS 43.55.029(a) is amended to read:                                                                     
07            (a)  An explorer or producer that has applied for a production tax credit under                              
08       former AS 43.55.023(a) [, (b),] or (l) or under AS 43.55.023(b) or 43.55.025(a) may                       
09       make a present assignment of the production tax credit certificate expected to be                                 
10       issued by the department to a third-party assignee. The assignment may be made either                             
11       at the time the application is filed with the department or not later than 30 days after                          
12       the date of filing with the department. Once a notice of assignment in compliance with                            
13       this section is filed with the department, the assignment is irrevocable and cannot be                            
14       modified by the explorer or producer without the written consent of the assignee                                  
15       named in the assignment. If a production tax credit certificate is issued to the explorer                         
16       or producer, the notice of assignment remains effective and shall be filed with the                               
17       department by the explorer or producer together with any application for the                                      
18       department to purchase the certificate under AS 43.55.028(e).                                                     
19    * Sec. 30. AS 43.55.030(a) is amended to read:                                                                     
20            (a)  A producer that produces oil or gas from a lease or property in the state                               
21       during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                               
22       for that oil or gas, shall file with the department on March 31 of the following year a                           
23       statement, under oath, in a form prescribed by the department, giving, with other                                 
24       information required, the following:                                                                              
25                 (1)  a description of each lease or property from which oil or gas was                                  
26       produced, by name, legal description, lease number, or accounting codes assigned by                               
27       the department;                                                                                                   
28                 (2)  the names of the producer and, if different, the person paying the                                 
29       tax, if any;                                                                                                      
30                 (3)  the gross amount of oil and the gross amount of gas produced from                                  
31       each lease or property, separately identifying the gross amount of gas produced from                              
01       each oil and gas lease to which an effective election under AS 43.55.014(a) applies,                              
02       the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of                             
03       the gross amount of oil and gas owned by the producer;                                                            
04                 (4)  the gross value at the point of production of the oil and of the gas                               
05       produced from each lease or property owned by the producer and the costs of                                       
06       transportation of the oil and gas;                                                                                
07                 (5)  the name of the first purchaser and the price received for the oil and                             
08       for the gas, unless relieved from this requirement in whole or in part by the                                     
09       department;                                                                                                       
10                 (6)  the producer's qualified capital expenditures, [AS DEFINED IN                                      
11       AS 43.55.023,] other lease expenditures under AS 43.55.165, and adjustments or other                              
12       payments or credits under AS 43.55.170;                                                                           
13                 (7)  the production tax values of the oil and gas under AS 43.55.160(a)                                 
14       or of the oil under AS 43.55.160(h), as applicable;                                                               
15                 (8)  any claims for tax credits to be applied; and                                                      
16                 (9)  calculations showing the amounts, if any, that were or are due                                     
17       under AS 43.55.020(a) and interest on any underpayment or overpayment.                                            
18    * Sec. 31. AS 43.55.030(e) is amended to read:                                                                     
19            (e)  An explorer or producer that incurs a lease expenditure under                                           
20       AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar                                 
21       year but does not produce oil or gas from a lease or property in the state during the                             
22       calendar year shall file with the department, on March 31 of the following year, a                                
23       statement, under oath, in a form prescribed by the department, giving, with other                                 
24       information required, the following:                                                                              
25                 (1)  the explorer's or producer's qualified capital expenditures, [AS                                   
26       DEFINED IN AS 43.55.023,] other lease expenditures under AS 43.55.165, and                                        
27       adjustments or other payments or credits under AS 43.55.170; and                                                  
28                 (2)  if the explorer or producer receives a payment or credit under                                     
29       AS 43.55.170, calculations showing whether the explorer or producer is liable for a                               
30       tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount.                                                 
31    * Sec. 32. AS 43.55.160(a) is amended to read:                                                                     
01            (a)  For oil and gas produced before January 1, 2022, except as provided in (b),                             
02       (f), and (g) of this section, for the purposes of                                                                 
03                 (1)  AS 43.55.011(e)(1) and (2), the annual production tax value of                                     
04       taxable oil, gas, or oil and gas produced during a calendar year in a category for which                          
05       a separate annual production tax value is required to be calculated under this                                    
06       paragraph is the gross value at the point of production of that oil, gas, or oil and gas                          
07       taxable under AS 43.55.011(e), less the producer's lease expenditures under                                       
08       AS 43.55.165 for the calendar year applicable to the oil, gas, or oil and gas in that                             
09       category produced by the producer during the calendar year, as adjusted under                                     
10       AS 43.55.170; a separate annual production tax value shall be calculated for                                      
11                      (A)  oil and gas produced from leases or properties in the state                                   
12            that include land north of 68 degrees North latitude, other than gas produced                                
13            before 2022 and used in the state;                                                                           
14                      (B)  oil and gas produced from leases or properties in the state                                   
15            outside the Cook Inlet sedimentary basin, no part of which is north of 68                                    
16            degrees North latitude and that qualifies for a tax credit under AS 43.55.024(a)                             
17            and (b); this subparagraph does not apply to                                                                 
18                           (i)  gas produced before 2022 and used in the state; or                                       
19                           (ii)  oil and gas subject to AS 43.55.011(p);                                                 
20                      (C)  [OIL PRODUCED BEFORE 2022 FROM EACH LEASE                                                     
21            OR PROPERTY IN THE COOK INLET SEDIMENTARY BASIN;                                                             
22                      (D)  GAS PRODUCED BEFORE 2022 FROM EACH LEASE                                                      
23            OR PROPERTY IN THE COOK INLET SEDIMENTARY BASIN;                                                             
24                      (E)]  gas produced before 2022 from each lease or property in                                      
25            the state outside the Cook Inlet sedimentary basin and used in the state, other                              
26            than gas subject to AS 43.55.011(p);                                                                         
27                      (D) [(F)]  oil and gas subject to AS 43.55.011(p) produced from                                
28            leases or properties in the state;                                                                           
29                      (E) [(G)]  oil and gas produced from leases or properties in the                               
30            state no part of which is north of 68 degrees North latitude, other than oil or                              
31            gas described in (B), (C), or (D) [, (E), OR (F)] of this paragraph;                                     
01                 (2)  AS 43.55.011(g), for oil and gas produced before January 1, 2014,                                  
02       the monthly production tax value of the taxable                                                                   
03                      (A)  oil and gas produced during a month from leases or                                            
04            properties in the state that include land north of 68 degrees North latitude is the                          
05            gross value at the point of production of the oil and gas taxable under                                      
06            AS 43.55.011(e) and produced by the producer from those leases or properties,                                
07            less 1/12 of the producer's lease expenditures under AS 43.55.165 for the                                    
08            calendar year applicable to the oil and gas produced by the producer from                                    
09            those leases or properties, as adjusted under AS 43.55.170; [THIS                                            
10            SUBPARAGRAPH DOES NOT APPLY TO GAS SUBJECT TO                                                                
11            AS 43.55.011(o);]                                                                                            
12                      (B)  oil and gas produced during a month from leases or                                            
13            properties in the state outside the Cook Inlet sedimentary basin, no part of                                 
14            which is north of 68 degrees North latitude, is the gross value at the point of                              
15            production of the oil and gas taxable under AS 43.55.011(e) and produced by                                  
16            the producer from those leases or properties, less 1/12 of the producer's lease                              
17            expenditures under AS 43.55.165 for the calendar year applicable to the oil and                              
18            gas produced by the producer from those leases or properties, as adjusted under                              
19            AS 43.55.170; [THIS SUBPARAGRAPH DOES NOT APPLY TO GAS                                                       
20            SUBJECT TO AS 43.55.011(o);]                                                                                 
21                      (C)  [OIL PRODUCED DURING A MONTH FROM A                                                           
22            LEASE OR PROPERTY IN THE COOK INLET SEDIMENTARY BASIN IS                                                     
23            THE GROSS VALUE AT THE POINT OF PRODUCTION OF THE OIL                                                        
24            TAXABLE UNDER AS 43.55.011(e) AND PRODUCED BY THE                                                            
25            PRODUCER FROM THAT LEASE OR PROPERTY, LESS 1/12 OF THE                                                       
26            PRODUCER'S LEASE EXPENDITURES UNDER AS 43.55.165 FOR THE                                                     
27            CALENDAR YEAR APPLICABLE TO THE OIL PRODUCED BY THE                                                          
28            PRODUCER FROM THAT LEASE OR PROPERTY, AS ADJUSTED                                                            
29            UNDER AS 43.55.170;                                                                                          
30                      (D)  GAS PRODUCED DURING A MONTH FROM A                                                            
31            LEASE OR PROPERTY IN THE COOK INLET SEDIMENTARY BASIN IS                                                     
01            THE GROSS VALUE AT THE POINT OF PRODUCTION OF THE GAS                                                        
02            TAXABLE UNDER AS 43.55.011(e) AND PRODUCED BY THE                                                            
03            PRODUCER FROM THAT LEASE OR PROPERTY, LESS 1/12 OF THE                                                       
04            PRODUCER'S LEASE EXPENDITURES UNDER AS 43.55.165 FOR THE                                                     
05            CALENDAR YEAR APPLICABLE TO THE GAS PRODUCED BY THE                                                          
06            PRODUCER FROM THAT LEASE OR PROPERTY, AS ADJUSTED                                                            
07            UNDER AS 43.55.170;                                                                                          
08                      (E)]  gas produced during a month from a lease or property                                         
09            outside the Cook Inlet sedimentary basin and used in the state is the gross                                  
10            value at the point of production of that gas taxable under AS 43.55.011(e) and                               
11            produced by the producer from that lease or property, less 1/12 of the                                       
12            producer's lease expenditures under AS 43.55.165 for the calendar year                                       
13            applicable to that gas produced by the producer from that lease or property, as                              
14            adjusted under AS 43.55.170.                                                                                 
15    * Sec. 33. AS 43.55.160(e) is amended to read:                                                                     
16            (e)  Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that                                   
17       would otherwise be deductible by a producer in a calendar year but whose deduction                                
18       would cause an annual production tax value calculated under (a)(1) or (h) of this                                 
19       section of taxable oil or gas produced during the calendar year to be less than zero                              
20       may be used to establish a carried-forward annual loss under AS 43.55.023(b).                                     
21       However, the department shall provide by regulation a method to ensure that, for a                                
22       period for which a producer's tax liability is limited by AS 43.55.011(p)                                     
23       [AS 43.55.011(j), (k), (o), OR (p)], any adjusted lease expenditures under                                        
24       AS 43.55.165 and 43.55.170 that would otherwise be deductible by a producer for that                              
25       period but whose deduction would cause a production tax value calculated under                                    
26       (a)(1)(C) or [,] (D) [, (E), OR (F),] or (h)(3) of this section to be less than zero are                      
27       accounted for as though the adjusted lease expenditures had first been used as                                    
28       deductions in calculating the production tax values of oil or gas subject to any of the                           
29       limitations under AS 43.55.011(p) [AS 43.55.011(j), (k), (o), OR (p)] that have                               
30       positive production tax values so as to reduce the tax liability calculated without                               
31       regard to the limitation to the maximum amount provided for under the applicable                                  
01       provision of AS 43.55.011(p) [AS 43.55.011(j), (k), (o), OR (p)]. Only the amount of                          
02       those adjusted lease expenditures remaining after the accounting provided for under                               
03       this subsection may be used to establish a carried-forward annual loss under                                      
04       AS 43.55.023(b). In this subsection, "producer" includes "explorer."                                              
05    * Sec. 34. AS 43.55.160(f) is amended to read:                                                                     
06            (f)  On and after January 1, 2014, in the calculation of an annual production tax                            
07       value of a producer under (a)(1)(A) or (h)(1) of this section, the gross value at the                             
08       point of production of oil or gas produced from a lease or property north of 68 degrees                           
09       North latitude meeting one or more of the following criteria is reduced by 20 percent:                            
10       (1) the oil or gas is produced from a lease or property that does not contain a lease that                        
11       was within a unit on January 1, 2003; (2) the oil or gas is produced from a                                       
12       participating area established after December 31, 2011, that is within a unit formed                              
13       under AS 38.05.180(p) before January 1, 2003, if the participating area does not                                  
14       contain a reservoir that had previously been in a participating area established before                           
15       December 31, 2011; (3) the oil or gas is produced from acreage that was added to an                               
16       existing participating area by the Department of Natural Resources on and after                                   
17       January 1, 2014, and the producer demonstrates to the department that the volume of                               
18       oil or gas produced is from acreage added to an existing participating area. This                                 
19       subsection does not apply to gas produced before 2022 that is used in the state or to                             
20       gas produced on and after January 1, 2022. For oil or gas first produced after                                
21       December 31, 2016, the reduction under this subsection shall apply to oil or gas                              
22       produced from a lease or property for the first five years after the                                          
23       commencement of production in commercial quantities of oil or gas from that                                   
24       lease or property. For oil or gas first produced before January 1, 2017, the                                  
25       reduction under this subsection for a lease or property shall expire January 1,                               
26       2021. A reduction under this subsection may not reduce the gross value at the point of                        
27       production below zero. In this subsection, "participating area" means a reservoir or                              
28       portion of a reservoir producing or contributing to production as approved by the                                 
29       Department of Natural Resources.                                                                                  
30    * Sec. 35. AS 43.55.160(g) is amended to read:                                                                     
31            (g)  On and after January 1, 2014, in addition to the reduction under (f) of this                            
01       section, in the calculation of an annual production tax value of a producer under                                 
02       (a)(1)(A) or (h)(1) of this section, the gross value at the point of production of oil or                         
03       gas produced from a lease or property north of 68 degrees North latitude that does not                            
04       contain a lease that was within a unit on January 1, 2003, is reduced by 10 percent if                            
05       the oil or gas is produced from a unit made up solely of leases that have a royalty                               
06       share of more than 12.5 percent in amount or value of the production removed or sold                              
07       from the lease as determined under AS 38.05.180(f). This subsection does not apply if                             
08       the royalty obligation for one or more of the leases in the unit has been reduced to 12.5                         
09       percent or less under AS 38.05.180(j) for all or part of the calendar year for which the                          
10       annual production tax value is calculated. This subsection does not apply to gas                                  
11       produced before 2022 that is used in the state or to gas produced on and after                                    
12       January 1, 2022. For oil or gas first produced after December 31, 2016, the                                   
13       reduction under this subsection shall apply to oil or gas produced from a lease or                            
14       property for the first five years after the commencement of production in                                     
15       commercial quantities of oil or gas from that lease or property. For oil or gas first                         
16       produced before January 1, 2017, the reduction under this subsection for a lease                              
17       or property shall expire January 1, 2021. A reduction under this subsection may not                           
18       reduce the gross value at the point of production below zero.                                                     
19    * Sec. 36. AS 43.55.165(a) is amended to read:                                                                     
20            (a)  For [EXCEPT AS PROVIDED IN (j) AND (k) OF THIS SECTION,                                             
21       FOR] purposes of this chapter, a producer's lease expenditures for a calendar year are                            
22                 (1)  costs, other than items listed in (e) of this section, that are                                    
23                      (A)  incurred by the producer during the calendar year after                                       
24            March 31, 2006, to explore for, develop, or produce oil or gas deposits located                              
25            within the producer's leases or properties in the state or, in the case of land in                           
26            which the producer does not own an operating right, operating interest, or                                   
27            working interest, to explore for oil or gas deposits within other land in the                                
28            state; and                                                                                                   
29                      (B)  allowed by the department by regulation, based on the                                         
30            department's determination that the costs satisfy the following three                                        
31            requirements:                                                                                                
01                           (i)  the costs must be incurred upstream of the point of                                      
02                 production of oil and gas;                                                                              
03                           (ii)  the costs must be ordinary and necessary costs of                                       
04                 exploring for, developing, or producing, as applicable, oil or gas                                      
05                 deposits; and                                                                                           
06                           (iii)  the costs must be direct costs of exploring for,                                       
07                 developing, or producing, as applicable, oil or gas deposits; and                                       
08                 (2)  a reasonable allowance for that calendar year, as determined under                                 
09       regulations adopted by the department, for overhead expenses that are directly related                            
10       to exploring for, developing, or producing, as applicable, the oil or gas deposits.                               
11    * Sec. 37. AS 43.55.165(e) is amended to read:                                                                     
12            (e)  For purposes of this section, lease expenditures do not include                                         
13                 (1)  depreciation, depletion, or amortization;                                                          
14                 (2)  oil or gas royalty payments, production payments, lease profit                                     
15       shares, or other payments or distributions of a share of oil or gas production, profit, or                        
16       revenue, except that a producer's lease expenditures applicable to oil and gas produced                           
17       from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net                             
18       profit paid to the state under that lease;                                                                        
19                 (3)  taxes based on or measured by net income;                                                          
20                 (4)  interest or other financing charges or costs of raising equity or debt                             
21       capital;                                                                                                          
22                 (5)  acquisition costs for a lease or property or exploration license;                                  
23                 (6)  costs arising from fraud, wilful misconduct, gross negligence,                                     
24       violation of law, or failure to comply with an obligation under a lease, permit, or                               
25       license issued by the state or federal government;                                                                
26                 (7)  fines or penalties imposed by law;                                                                 
27                 (8)  costs of arbitration, litigation, or other dispute resolution activities                           
28       that involve the state or concern the rights or obligations among owners of interests in,                         
29       or rights to production from, one or more leases or properties or a unit;                                         
30                 (9)  costs incurred in organizing a partnership, joint venture, or other                                
31       business entity or arrangement;                                                                                   
01                 (10)  amounts paid to indemnify the state; the exclusion provided by                                    
02       this paragraph does not apply to the costs of obtaining insurance or a surety bond from                           
03       a third-party insurer or surety;                                                                                  
04                 (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                
05                 (12)  an expenditure otherwise deductible under (b) of this section that                                
06       is a result of an internal transfer, a transaction with an affiliate, or a transaction                            
07       between related parties, or is otherwise not an arm's length transaction, unless the                              
08       producer establishes to the satisfaction of the department that the amount of the                                 
09       expenditure does not exceed the fair market value of the expenditure;                                             
10                 (13)  an expenditure incurred to purchase an interest in any corporation,                               
11       partnership, limited liability company, business trust, or any other business entity,                             
12       whether or not the transaction is treated as an asset sale for federal income tax                                 
13       purposes;                                                                                                         
14                 (14)  a tax levied under AS 43.55.011 or 43.55.014;                                                     
15                 (15)  costs incurred for dismantlement, removal, surrender, or                                          
16       abandonment of a facility, pipeline, well pad, platform, or other structure, or for the                           
17       restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in                       
18       conjunction with dismantlement, removal, surrender, or abandonment; a cost is not                                 
19       excluded under this paragraph if the dismantlement, removal, surrender, or                                        
20       abandonment for which the cost is incurred is undertaken for the purpose of replacing,                            
21       renovating, or improving the facility, pipeline, well pad, platform, or other structure;                          
22                 (16)  costs incurred for containment, control, cleanup, or removal in                                   
23       connection with any unpermitted release of oil or a hazardous substance and any                                   
24       liability for damages imposed on the producer or explorer for that unpermitted release;                           
25       this paragraph does not apply to the cost of developing and maintaining an oil                                    
26       discharge prevention and contingency plan under AS 46.04.030;                                                     
27                 (17)  costs incurred to satisfy a work commitment under an exploration                                  
28       license under AS 38.05.132;                                                                                       
29                 (18)  that portion of expenditures, that would otherwise be qualified                                   
30       capital expenditures, [AS DEFINED IN AS 43.55.023,] incurred during a calendar                                    
31       year that are less than the product of $0.30 multiplied by the total taxable production                           
01       from each lease or property, in BTU equivalent barrels, during that calendar year,                                
02       except that, when a portion of a calendar year is subject to this provision, the                                  
03       expenditures and volumes shall be prorated within that calendar year;                                             
04                 (19)  costs incurred for repair, replacement, or deferred maintenance of                                
05       a facility, a pipeline, a structure, or equipment, other than a well, that results in or is                       
06       undertaken in response to a failure, problem, or event that results in an unscheduled                             
07       interruption of, or reduction in the rate of, oil or gas production; or costs incurred for                        
08       repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or                           
09       equipment, other than a well, that is undertaken in response to, or is otherwise                                  
10       associated with, an unpermitted release of a hazardous substance or of gas; however,                              
11       costs under this paragraph that would otherwise constitute lease expenditures under (a)                           
12       and (b) of this section may be treated as lease expenditures if the department                                    
13       determines that the repair or replacement is solely necessitated by an act of war, by an                          
14       unanticipated grave natural disaster or other natural phenomenon of an exceptional,                               
15       inevitable, and irresistible character, the effects of which could not have been                                  
16       prevented or avoided by the exercise of due care or foresight, or by an intentional or                            
17       negligent act or omission of a third party, other than a party or its agents in privity of                        
18       contract with, or employed by, the producer or an operator acting for the producer, but                           
19       only if the producer or operator, as applicable, exercised due care in operating and                              
20       maintaining the facility, pipeline, structure, or equipment, and took reasonable                                  
21       precautions against the act or omission of the third party and against the consequences                           
22       of the act or omission; in this paragraph,                                                                        
23                      (A)  "costs incurred for repair, replacement, or deferred                                          
24            maintenance of a facility, a pipeline, a structure, or equipment" includes costs                             
25            to dismantle and remove the facility, pipeline, structure, or equipment that is                              
26            being replaced;                                                                                              
27                      (B)  "hazardous substance" has the meaning given in                                                
28            AS 46.03.826;                                                                                                
29                      (C)  "replacement" includes renovation or improvement;                                             
30                 (20)  costs incurred to construct, acquire, or operate a refinery or crude                              
31       oil topping plant, regardless of whether the products of the refinery or topping plant                            
01       are used in oil or gas exploration, development, or production operations; however, if                            
02       a producer owns a refinery or crude oil topping plant that is located on or near the                              
03       premises of the producer's lease or property in the state and that processes the                                  
04       producer's oil produced from that lease or property into a product that the producer                              
05       uses in the operation of the lease or property in drilling for or producing oil or gas, the                       
06       producer's lease expenditures include the amount calculated by subtracting from the                               
07       fair market value of the product used the prevailing value, as determined under                                   
08       AS 43.55.020(f), of the oil that is processed;                                                                    
09                 (21)  costs of lobbying, public relations, public relations advertising, or                             
10       policy advocacy.                                                                                                  
11    * Sec. 38. AS 43.55.165(f) is amended to read:                                                                     
12            (f)  For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as                               
13       to expenditures incurred to explore for an oil or gas deposit located within land in                              
14       which an explorer does not own a working interest, the term "producer" in this section                            
15       includes "explorer."                                                                                              
16    * Sec. 39. AS 43.55.165(h) is amended to read:                                                                     
17            (h)  The department shall adopt regulations that provide for reasonable                                      
18       methods of allocating costs between oil and gas [, BETWEEN GAS SUBJECT TO                                         
19       AS 43.55.011(o) AND OTHER GAS,] and between leases or properties in those                                         
20       circumstances where an allocation of costs is required to determine lease expenditures                            
21       that are costs of exploring for, developing, or producing oil deposits or costs of                                
22       exploring for, developing, or producing gas deposits, or that are costs of exploring for,                         
23       developing, or producing oil or gas deposits located within different leases or                                   
24       properties.                                                                                                       
25    * Sec. 40. AS 43.55.170(c) is amended to read:                                                                     
26            (c)  For purposes of AS 43.55.023(b) [AS 43.55.023(a) AND (b)] and only as                               
27       to expenditures incurred to explore for an oil or gas deposit located within land in                              
28       which an explorer does not own a working interest, the term "producer" in this section                            
29       includes "explorer."                                                                                              
30    * Sec. 41. AS 43.55.890 is amended to read:                                                                        
31            Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary                                
01       provision of AS 40.25.100, and regardless of whether the information is considered                                
02       under AS 43.05.230(e) to constitute statistics classified to prevent the identification of                        
03       particular returns or reports, the department may publish the following information                               
04       under this chapter, if aggregated among three or more producers or explorers, showing                             
05       by month or calendar year and by lease or property, unit, or area of the state:                                   
06                 (1)  the amount of oil or gas production;                                                               
07                 (2)  the amount of taxes levied under this chapter or paid under this                                   
08       chapter;                                                                                                          
09                 (3)  the effective tax rates under this chapter;                                                        
10                 (4)  the gross value of oil or gas at the point of production;                                          
11                 (5)  the transportation costs for oil or gas;                                                           
12                 (6)  qualified capital expenditures [, AS DEFINED IN AS 43.55.023];                                     
13                 (7)  exploration expenditures under AS 43.55.025;                                                       
14                 (8)  production tax values of oil or gas under AS 43.55.160;                                            
15                 (9)  lease expenditures under AS 43.55.165;                                                             
16                 (10)  adjustments to lease expenditures under AS 43.55.170;                                             
17                 (11)  tax credits applicable or potentially applicable against taxes levied                             
18       by this chapter.                                                                                                  
19    * Sec. 42. AS 43.55.895(b) is amended to read:                                                                     
20            (b)  A municipal entity subject to taxation because of this section                                          
21                 (1)  is eligible for [ALL] tax credits proportionate to its production                          
22       taxable under AS 43.55.011(e); and                                                                            
23                 (2)  shall allocate its lease expenditures in proportion to its                                     
24       production taxable under AS 43.55.011(e) [UNDER THIS CHAPTER TO THE                                           
25       SAME EXTENT AS ANY OTHER PRODUCER].                                                                               
26    * Sec. 43. AS 43.55.900 is amended by adding a new paragraph to read:                                              
27                 (26)  "qualified capital expenditure"                                                                   
28                      (A)  means, except as otherwise provided in (B) of this                                            
29            paragraph, an expenditure that is a lease expenditure under AS 43.55.165 and                                 
30            is                                                                                                           
31                           (i)  incurred for geological or geophysical exploration;                                      
01                           (ii)  treated as a capitalized expenditure under 26 U.S.C.                                    
02                 (Internal Revenue Code), as amended, regardless of elections made                                       
03                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
04                 treated as a capitalized expenditure for federal income tax reporting                                   
05                 purposes by the person incurring the expenditure; or                                                    
06                           (iii)  treated as a capitalized expenditure under 26 U.S.C.                                   
07                 (Internal Revenue Code), as amended, regardless of elections made                                       
08                 under 26 U.S.C. 263(c) (Internal Revenue Code), as amended, and is                                      
09                 eligible to be deducted as an expense under 26 U.S.C. 263(c) (Internal                                  
10                 Revenue Code), as amended;                                                                              
11                      (B)  does not include an expenditure incurred to acquire an asset                                  
12            the cost of previously acquiring which was a lease expenditure under                                         
13            AS 43.55.165 or would have been a lease expenditure under AS 43.55.165 if it                                 
14            had been incurred after March 31, 2006, or that has previously been placed in                                
15            service in the state; an expenditure to acquire an asset is not excluded under                               
16            this subparagraph if not more than an immaterial portion of the asset meets a                                
17            description under this subparagraph; for purposes of this subparagraph, "asset"                              
18            includes geological, geophysical, and well data and interpretations.                                         
19    * Sec. 44. AS 43.70 is amended by adding new sections to read:                                                     
20            Sec. 43.70.025. Bond or cash deposit required for an oil or gas business. (a)                              
21       At the time of applying for a license under this chapter, an applicant engaged in the                             
22       business of oil or gas exploration, development, or production shall file a surety bond                           
23       in the amount of $250,000 running to the state, conditioned upon the applicant's                                  
24       promise to pay all                                                                                                
25                 (1)  taxes and contributions due the state and political subdivisions;                                  
26                 (2)  persons furnishing labor or material or renting or supplying                                       
27       equipment to the applicant; and                                                                                   
28                 (3)  amounts that may be adjudged against the applicant because of                                      
29       negligent or improper work or breach of contract while engaged in the business of oil                             
30       or gas exploration, development, or production.                                                                   
31            (b)  In lieu of the surety bond required under this section, the applicant may                               
01       file with the commissioner a cash deposit or other negotiable security acceptable to the                          
02       commissioner in the amount of $250,000.                                                                           
03            (c)  The bond required by this section remains in effect until cancelled by                                  
04       action of the surety, the principal, or if the commissioner finds that the business is                            
05       producing oil or gas in commercial quantities, by the commissioner.                                               
06            Sec. 43.70.028. Claims against an oil or gas business. (a) A person having a                               
07       claim against a person required to file a surety bond under AS 43.70.025 because of                               
08       the failure to pay a liability described in AS 43.70.025(a) may bring suit upon the                               
09       bond. A copy of the complaint shall be served by registered or certified mail on the                              
10       commissioner at the time suit is filed, and the commissioner shall maintain a record,                             
11       available for public inspection, of all suits commenced. This service on the                                      
12       commissioner shall constitute service on the surety, and the commissioner shall                                   
13       transmit the complaint or a copy of it to the surety within 72 hours after it is received.                        
14       The surety on the bond is not liable in an aggregate amount in excess of that named in                            
15       the bond, but if claims pending at any one time exceed the amount of the bond, the                                
16       claims shall be satisfied from the bond in the following order:                                                   
17                 (1)  labor, including employee benefits;                                                                
18                 (2)  taxes and contributions due the state, city, and borough, in that                                  
19       order;                                                                                                            
20                 (3)  material and equipment;                                                                            
21                 (4)  claims for negligent or improper work or breach of contract;                                       
22                 (5)  repair of public facilities.                                                                       
23            (b)  If a judgment is entered against a cash deposit, the commissioner, upon                                 
24       receipt of a certified copy of a final judgment, shall pay the judgment from the amount                           
25       of the deposit in accordance with the priorities set out in (a) of this section.                                  
26            (c)  An action described in (a) of this section may not be commenced on the                                  
27       bond more than three years after the cancellation of the bond.                                                    
28    * Sec. 45. AS 38.05.180(i); AS 41.09.010, 41.09.020, 41.09.030, 41.09.090;                                         
29 AS 43.20.053(j)(4); and AS 43.55.011(m) are repealed January 1, 2017.                                                   
30    * Sec. 46. AS 43.55.011(j), 43.55.011(k), and 43.55.011(o) are repealed January 1, 2018.                           
31    * Sec. 47. AS 43.55.023(a), 43.55.023(l), 43.55.023(n), 43.55.023(o), 43.55.028(i),                                
01 43.55.075(d)(1), 43.55.165(j), and 43.55.165(k) are repealed January 1, 2022.                                           
02    * Sec. 48. The uncodified law of the State of Alaska is amended by adding a new section to                         
03 read:                                                                                                                   
04       APPLICABILITY. Sections 7 - 9, 26, and 28 of this Act apply to a refund or payment                                
05 applied for on or after January 1, 2017.                                                                                
06    * Sec. 49. The uncodified law of the State of Alaska is amended by adding a new section to                         
07 read:                                                                                                                   
08       TRANSITION: QUALIFIED CAPITAL EXPENDITURES AND WELL LEASE                                                         
09 EXPENDITURES. (a) Notwithstanding the repeal of AS 43.55.023(a), (l), (n), and (o) by sec.                              
10 47 of this Act, and the amendments to AS 43.55.023(d) and (e), 43.55.029(a), 43.55.165(f),                              
11 and 43.55.170(c) by secs. 21, 22, 29, 38, and 40 of this Act, a taxpayer who incurs                                     
12            (1)  a qualified capital expenditure before the effective date of sec. 47 of this                            
13 Act that qualifies for a qualified capital expenditure credit under AS 43.55.023(a) may apply                           
14 for a credit or transferable tax credit certificate under AS 43.55.023 and assign the tax credit                        
15 under AS 43.55.029, as those sections read on the day before the effective date of sec. 47 of                           
16 this Act;                                                                                                               
17            (2)  a well lease expenditure before the effective date of sec. 47 of this Act that                          
18 qualifies for a well lease expenditure credit under AS 43.55.023(l) may apply for a credit or                           
19 transferable tax credit certificate under AS 43.55.023 and assign the tax credit under                                  
20 AS 43.55.029, as those sections read on the day before the effective date of sec. 47 of this                            
21 Act.                                                                                                                    
22       (b)  The Department of Revenue may continue to apply and enforce AS 43.55.023 and                                 
23 43.55.029, as those sections read on the day before the effective date of sec. 47 of this Act, for                      
24 qualified capital expenditures and well lease expenditures incurred before the effective date of                        
25 sec. 47 of this Act.                                                                                                    
26    * Sec. 50. The uncodified law of the State of Alaska is amended by adding a new section to                         
27 read:                                                                                                                   
28       TRANSITION: LEASE EXPENDITURES FOR A CALENDAR YEAR AFTER                                                          
29 2006 AND BEFORE 2010. Notwithstanding AS 43.55.165(a), as amended by sec. 36 of this                                    
30 Act, and the repeal of AS 43.55.165(j) and (k) by sec. 47 of this Act, AS 43.55.165(j) and (k)                          
31 apply to a producer's total lease expenditures for a calendar year after 2006 and before 2010                           
01 under AS 43.55.165, as that section read on the day before the effective date of sec. 47 of this                        
02 Act.                                                                                                                    
03    * Sec. 51. The uncodified law of the State of Alaska is amended by adding a new section to                         
04 read:                                                                                                                   
05       TRANSITION: PAYMENT OF TAX; FILING. (a) Notwithstanding the amendments                                            
06 to AS 43.55.020 by secs. 13 - 16 of this Act,                                                                           
07            (1)  a person subject to tax under AS 43.55 that is required to make one or                                  
08 more installment payments of estimated tax or other payments of tax under AS 43.55.020 for                              
09 production before the effective date of secs. 13 - 16 of this Act shall pay the tax under                               
10 AS 43.55.020, as that section read on the day before the effective date of secs. 13 - 16 of this                        
11 Act;                                                                                                                    
12            (2)  an unpaid amount of an installment payment required under AS 43.55.020                                  
13 for production before the effective date of secs. 13 - 16 of this Act that is not paid when due                         
14 bears interest under AS 43.55.020, as that section read on the day before the effective date of                         
15 secs. 13 - 16 of this Act;                                                                                              
16            (3)  an overpayment of an installment payment required under AS 43.55.020                                    
17 for production before the effective date of secs. 13 - 16 of this Act bears interest under                              
18 AS 43.55.020, as that section read on the day before the effective date of secs. 13 - 16 of this                        
19 Act.                                                                                                                    
20       (b)  The Department of Revenue may continue to apply and enforce AS 43.55.020, as                                 
21 that section read on the day before the effective date of secs. 13 - 16 of this Act, for a tax or                       
22 installment payment for production before the effective date of secs. 13 - 16 of this Act.                              
23    * Sec. 52. The uncodified law of the State of Alaska is amended by adding a new section to                         
24 read:                                                                                                                   
25       TRANSITION: PRODUCTION TAX AND CARRIED-FORWARD ANNUAL                                                             
26 LOSS.  Notwithstanding the repeal of AS 43.55.011(j), (k), and (o) by sec. 46 of this Act and                           
27 the amendments to AS 43.55.011(e) and (f), 43.55.160(a) and (e), and 43.55.165(h) by secs.                              
28 10, 11, 32, 33, and 39 of this Act,                                                                                     
29            (1)  for oil and gas produced before the effective date of sec. 46 of this Act, the                          
30 production tax and production tax value of that oil and gas shall be determined under                                   
31 AS 43.55.011 and 43.55.160, as those sections read on the day before the effective date of                              
01 secs. 10, 11, 32, 33, and 46 of this Act;                                                                               
02            (2)  in determining lease expenditures incurred before the effective date of sec.                            
03 39 of this Act, the Department of Revenue shall continue to apply regulations that were                                 
04 adopted under AS 43.55.165(h) that were in effect on the day before the effective date of sec.                          
05 39 of this Act; and                                                                                                     
06            (3)  a lease expenditure incurred before the effective date of sec. 33 of this Act                           
07 may be used to establish a carried-forward annual loss under AS 43.55.160(e), as that                                   
08 subsection read on the day before the effective date of sec. 33 of this Act.                                            
09    * Sec. 53. The uncodified law of the State of Alaska is amended by adding a new section to                         
10 read:                                                                                                                   
11       TRANSITION: REGULATIONS. The Department of Revenue and the Department of                                          
12 Natural Resources may adopt regulations necessary to implement the changes made by this                                 
13 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not                                 
14 before the effective date of the law implemented by the regulation. The Department of                                   
15 Revenue shall adopt regulations governing the use of tax credits under AS 43.55 for a                                   
16 calendar year for which the applicable tax credit provisions of AS 43.55 differ as between                              
17 parts of the year as a result of this Act.                                                                              
18    * Sec. 54. The uncodified law of the State of Alaska is amended by adding a new section to                         
19 read:                                                                                                                   
20       TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any                                                     
21 contrary provision of AS 44.62.240,                                                                                     
22            (1)  if the Department of Revenue expressly designates in a regulation that the                              
23 regulation applies retroactively, a regulation adopted by the Department of Revenue to                                  
24 implement, interpret, make specific, or otherwise carry out this Act may apply retroactively to                         
25 the effective date of the law implemented by the regulation;                                                            
26            (2)  if the Department of Natural Resources expressly designates in the                                      
27 regulation that the regulation applies retroactively, a regulation adopted by the Department of                         
28 Natural Resources to implement, interpret, make specific, or otherwise carry out the statutory                          
29 amendments in this Act affecting the administration of oil and gas leases issued under                                  
30 AS 38.05.180(f)(3)(B), (D), or (E), to the extent the regulation relates to the treatment of oil                        
31 and gas production taxes in determining net profits under those leases, may apply                                       
01 retroactively to the effective date of the law implemented by the regulation.                                           
02    * Sec. 55. Sections 25 and 53 of this Act take effect immediately under AS 01.10.070(c).                           
03    * Sec. 56. Sections 10 - 16, 18, 20, 24, 32, 33, 39, 46, 51, and 52 of this Act take effect                        
04 January 1, 2018.                                                                                                        
05    * Sec. 57. Sections 21, 22, 29 - 31, 36 - 38, 40, 41, 43, 47, 49, and 50 of this Act take effect                   
06 January 1, 2022.                                                                                                        
07    * Sec. 58. Except as provided in secs. 55 - 57 of this Act, this Act takes effect January 1,                       
08 2017.