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HB 111: "An Act relating to the oil and gas production tax, tax payments, and credits; relating to interest applicable to delinquent oil and gas production tax; and providing for an effective date."

00                             HOUSE BILL NO. 111                                                                          
01 "An Act relating to the oil and gas production tax, tax payments, and credits; relating to                              
02 interest applicable to delinquent oil and gas production tax; and providing for an                                      
03 effective date."                                                                                                        
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 43.05.225 is amended to read:                                                                      
06            Sec. 43.05.225. Interest. Unless otherwise provided,                                                       
07                 (1)  a delinquent tax                                                                                   
08                      (A)  under this title, before January 1, 2014, bears interest in                                   
09            each calendar quarter at the rate of five percentage points above the annual rate                            
10            charged member banks for advances by the 12th Federal Reserve District as of                                 
11            the first day of that calendar quarter, or at the annual rate of 11 percent,                                 
12            whichever is greater, compounded quarterly as of the last day of that quarter;                               
13                      (B)  under this title, on and after January 1, 2014, except as                                     
14            provided in (C) of this paragraph, bears interest in each calendar quarter at the                            
01 rate of three percentage points above the annual rate charged member banks                                              
02 for advances by the 12th Federal Reserve District as of the first day of that                                           
03            calendar quarter;                                                                                            
04                      (C)  under AS 43.55, on and after January 1, 2017,                                                 
05 [(i)  FOR THE FIRST THREE YEARS AFTER A TAX                                                                             
06 BECOMES DELINQUENT,] bears interest in each calendar quarter at                                                         
07 the rate of seven percentage points above the annual rate charged                                                       
08 member banks for advances by the 12th Federal Reserve District as of                                                    
09 the first day of that calendar quarter, compounded quarterly as of the                                                  
10                 last day of that quarter; [AND                                                                          
11 (ii)  AFTER THE FIRST THREE YEARS AFTER A                                                                               
12                 TAX BECOMES DELINQUENT, DOES NOT BEAR INTEREST;]                                                        
13                 (2)  the interest rate is 12 percent a year for                                                         
14                      (A)  delinquent fees payable under AS 05.15.095(c); and                                            
15 (B)  unclaimed property that is not timely paid or delivered, as                                                        
16            allowed by AS 34.45.470(a).                                                                                  
17    * Sec. 2. AS 43.55.011(f) is amended to read:                                                                      
18            (f)  The levy of tax under (e) of this section for                                                           
19 (1)  oil and gas produced before January 1, 2018 [JANUARY 1,                                                        
20 2022], from leases or properties that include land north of 68 degrees North latitude,                                  
21       other than gas subject to (o) of this section, may not be less than                                               
22 (A)  four percent of the gross value at the point of production                                                         
23 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
24 the United States West Coast during the calendar year for which the tax is due                                          
25            is more than $25;                                                                                            
26 (B)  three percent of the gross value at the point of production                                                        
27 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
28 the United States West Coast during the calendar year for which the tax is due                                          
29            is over $20 but not over $25;                                                                                
30 (C)  two percent of the gross value at the point of production                                                          
31 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
01 the United States West Coast during the calendar year for which the tax is due                                          
02            is over $17.50 but not over $20;                                                                             
03 (D)  one percent of the gross value at the point of production                                                          
04 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
05 the United States West Coast during the calendar year for which the tax is due                                          
06            is over $15 but not over $17.50; or                                                                          
07 (E)  zero percent of the gross value at the point of production                                                         
08 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
09 the United States West Coast during the calendar year for which the tax is due                                          
10            is $15 or less; and                                                                                          
11 (2)  oil and gas produced on and after January 1, 2018, and before                                              
12 January 1, 2022, from leases or properties that include land north of 68 degrees North                                  
13 latitude, may not be less than five [(A)  FOUR] percent of the gross value at the point                             
14 of production [WHEN THE AVERAGE PRICE PER BARREL FOR ALASKA                                                             
15 NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED STATES WEST                                                                
16 COAST DURING THE CALENDAR YEAR FOR WHICH THE TAX IS DUE IS                                                              
17       MORE THAN $25;                                                                                                    
18 (B)  THREE PERCENT OF THE GROSS VALUE AT THE                                                                            
19 POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                                   
20 FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                                 
21 STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                                    
22            THE TAX IS DUE IS OVER $20 BUT NOT OVER $25;                                                                 
23 (C)  TWO PERCENT OF THE GROSS VALUE AT THE                                                                              
24 POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                                   
25 FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                                 
26 STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                                    
27            THE TAX IS DUE IS OVER $17.50 BUT NOT OVER $20;                                                              
28 (D)  ONE PERCENT OF THE GROSS VALUE AT THE                                                                              
29 POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                                   
30 FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                                 
31 STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                                    
01            THE TAX IS DUE IS OVER $15 BUT NOT OVER $17.50; OR                                                           
02 (E)  ZERO PERCENT OF THE GROSS VALUE AT THE                                                                             
03 POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                                   
04 FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                                 
05 STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                                    
06            THE TAX IS DUE IS $15 OR LESS].                                                                              
07    * Sec. 3. AS 43.55.011 is amended by adding a new subsection to read:                                              
08            (q)  The amount of tax determined under (f) of this section may not be reduced                               
09       by the application of a credit authorized under this chapter. The total amount of tax                             
10 credits that may be applied against the tax levied by (e) of this section for a calendar                                
11 year may not exceed the sum of the amount of the tax credits or fractions of tax credits                                
12 that are allowed under AS 43.55.020(a) to be subtracted in calculating the installment                                  
13       payments of estimated tax for each month in the calendar year.                                                    
14    * Sec. 4. AS 43.55.020(a) is amended to read:                                                                      
15 (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                                        
16       the tax as follows:                                                                                               
17 (1)  for oil and gas produced before January 1, 2014, an installment                                                    
18 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                                  
19 as allowed by law, is due for each month of the calendar year on the last day of the                                    
20 following month; except as otherwise provided under (2) of this subsection, the                                         
21 amount of the installment payment is the sum of the following amounts, less 1/12 of                                     
22 the tax credits that are allowed by law to be applied against the tax levied by                                         
23 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                                    
24       not be less than zero:                                                                                            
25 (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                                              
26 produced from leases or properties in the state outside the Cook Inlet                                                  
27 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                                          
28            the greater of                                                                                               
29                           (i)  zero; or                                                                                 
30 (ii)  the sum of 25 percent and the tax rate calculated for                                                             
31 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
01 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
02 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
03 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
04 at the point of production of the oil and gas produced from the leases or                                               
05 properties during the month for which the installment payment is                                                        
06                 calculated;                                                                                             
07                      (B)  for oil and gas produced from leases or properties subject                                    
08            to AS 43.55.011(f), the greatest of                                                                          
09                           (i)  zero;                                                                                    
10 (ii)  zero percent, one percent, two percent, three                                                                     
11 percent, or four percent, as applicable, of the gross value at the point of                                             
12 production of the oil and gas produced from the leases or properties                                                    
13                 during the month for which the installment payment is calculated; or                                    
14 (iii)  the sum of 25 percent and the tax rate calculated for                                                            
15 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
16 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
17 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
18 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
19 at the point of production of the oil and gas produced from those leases                                                
20 or properties during the month for which the installment payment is                                                     
21                 calculated;                                                                                             
22 (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                                        
23            each lease or property, the greater of                                                                       
24                           (i)  zero; or                                                                                 
25 (ii)  the sum of 25 percent and the tax rate calculated for                                                             
26 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
27 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
28 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
29 deductible under AS 43.55.160 for the oil or gas, respectively,                                                         
30 produced from the lease or property from the gross value at the point of                                                
31 production of the oil or gas, respectively, produced from the lease or                                                  
01 property during the month for which the installment payment is                                                          
02                 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 subsection for oil or gas                                                
16 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                          
17 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
18 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                          
19 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
20 gas produced during the month for the amount of taxable gas produced during the                                         
21 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
22       during the month for the amount of taxable oil produced during the calendar year;                                 
23 (3)  an installment payment of the estimated tax levied by                                                              
24 AS 43.55.011(i) for each lease or property is due for each month of the calendar year                                   
25 on the last day of the following month; the amount of the installment payment is the                                    
26       sum of                                                                                                            
27 (A)  the applicable tax rate for oil provided under                                                                     
28 AS 43.55.011(i), multiplied by the gross value at the point of production of the                                        
29 oil taxable under AS 43.55.011(i) and produced from the lease or property                                               
30            during the month; and                                                                                        
31 (B)  the applicable tax rate for gas provided under                                                                     
01 AS 43.55.011(i), multiplied by the gross value at the point of production of the                                        
02 gas taxable under AS 43.55.011(i) and produced from the lease or property                                               
03            during the month;                                                                                            
04 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                                       
05 applied as allowed by law, that exceeds the total of the amounts due as installment                                     
06 payments of estimated tax is due on March 31 of the year following the calendar year                                    
07       of production;                                                                                                    
08 (5)  for oil and gas produced on and after January 1, 2014, and before                                                  
09 January 1, 2022, an installment payment of the estimated tax levied by                                                  
10 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                      
11 month of the calendar year on the last day of the following month; except as otherwise                                  
12 provided under (6) of this subsection, the amount of the installment payment is the                                     
13 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be                                
14 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                                 
15       of the installment payment may not be less than zero:                                                             
16 (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                                              
17 produced from leases or properties in the state outside the Cook Inlet                                                  
18 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                                          
19            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 and gas under AS 43.55.160 from the gross value                                                  
25 at the point of production of the oil and gas produced from the leases or                                               
26 properties during the month for which the installment payment is                                                        
27                 calculated;                                                                                             
28 (B)  for oil and gas produced from leases or properties subject                                                         
29            to AS 43.55.011(f), the greatest of                                                                          
30                           (i)  zero;                                                                                    
31 (ii)  the [ZERO] percent [, ONE PERCENT, TWO                                                                        
01 PERCENT, THREE PERCENT, OR FOUR PERCENT, AS]                                                                            
02 applicable under AS 43.55.011(f) [, OF THE GROSS VALUE AT                                                           
03 THE POINT OF PRODUCTION OF THE OIL AND GAS                                                                              
04 PRODUCED FROM THE LEASES OR PROPERTIES DURING THE                                                                       
05 MONTH FOR WHICH THE INSTALLMENT PAYMENT IS                                                                              
06                 CALCULATED]; or                                                                                         
07 (iii)  35 percent multiplied by the remainder obtained by                                                               
08 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
09 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
10 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
11 at the point of production of the oil and gas produced from those leases                                                
12 or properties during the month for which the installment payment is                                                     
13 calculated, except that, for the purposes of this calculation, a reduction                                              
14 from the gross value at the point of production may apply for oil and                                                   
15                 gas subject to AS 43.55.160(f) or (g);                                                                  
16 (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                                        
17            each lease or property, the greater of                                                                       
18                           (i)  zero; or                                                                                 
19 (ii)  35 percent multiplied by the remainder obtained by                                                                
20 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
21 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
22 deductible under AS 43.55.160 for the oil or gas, respectively,                                                         
23 produced from the lease or property from the gross value at the point of                                                
24 production of the oil or gas, respectively, produced from the lease or                                                  
25 property during the month for which the installment payment is                                                          
26                 calculated;                                                                                             
27                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
28 (i)  35 percent multiplied by the remainder obtained by                                                                 
29 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, but not less than zero; or                                                                  
04 (ii)  four percent of the gross value at the point of                                                                   
05 production of the oil and gas produced from the leases or properties                                                    
06                 during the month, but not less than zero;                                                               
07 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                                
08 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                          
09 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
10 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                          
11 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
12 gas produced during the month for the amount of taxable gas produced during the                                         
13 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
14       during the month for the amount of taxable oil produced during the calendar year;                                 
15 (7)  for oil and gas produced on or after January 1, 2022, an installment                                               
16 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                                  
17 as allowed by law, is due for each month of the calendar year on the last day of the                                    
18 following month; except as otherwise provided under (10) of this subsection, the                                        
19 amount of the installment payment is the sum of the following amounts, less 1/12 of                                     
20 the tax credits that are allowed by law to be applied against the tax levied by                                         
21 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                                    
22       not be less than zero:                                                                                            
23 (A)  for oil produced from leases or properties subject to                                                              
24            AS 43.55.011(f), the greatest of                                                                             
25                           (i)  zero;                                                                                    
26 (ii)  five [ZERO] percent [, ONE PERCENT, TWO                                                                       
27 PERCENT, THREE PERCENT, OR FOUR PERCENT, AS                                                                             
28 APPLICABLE,] of the gross value at the point of production of the oil                                                   
29 produced from the leases or properties during the month for which the                                                   
30                 installment payment is calculated; or                                                                   
31 (iii)  35 percent multiplied by the remainder obtained by                                                               
01 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
02 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
03 deductible for the oil under AS 43.55.160(h)(1) from the gross value at                                                 
04 the point of production of the oil produced from those leases or                                                        
05 properties during the month for which the installment payment is                                                        
06 calculated, except that, for the purposes of this calculation, a reduction                                              
07 from the gross value at the point of production may apply for oil                                                       
08                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
09 (B)  for oil produced before or during the last calendar year                                                           
10 under AS 43.55.024(b) for which the producer could take a tax credit under                                              
11 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                                          
12 sedimentary basin, no part of which is north of 68 degrees North latitude, other                                        
13            than leases or properties subject to AS 43.55.011(o) or (p), the greater of                                  
14                           (i)  zero; or                                                                                 
15 (ii)  35 percent multiplied by the remainder obtained by                                                                
16 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
17 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
18 deductible for the oil under AS 43.55.160(h)(2) from the gross value at                                                 
19 the point of production of the oil produced from the leases or properties                                               
20                 during the month for which the installment payment is calculated;                                       
21 (C)  for oil and gas produced from leases or properties subject                                                         
22 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection,                                          
23            the sum of                                                                                                   
24 (i)  35 percent multiplied by the remainder obtained by                                                                 
25 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
26 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
27 deductible for the oil under AS 43.55.160(h)(3) from the gross value at                                                 
28 the point of production of the oil produced from the leases or properties                                               
29 during the month for which the installment payment is calculated, but                                                   
30                 not less than zero; and                                                                                 
31 (ii)  13 percent of the gross value at the point of                                                                     
01                 production of the gas produced from the leases or properties during the                                 
02                 month, but not less than zero;                                                                          
03                      (D)  for oil produced from leases or properties in the state, no                                   
04            part of which is north of 68 degrees North latitude, other than leases or                                    
05            properties subject to (B), (C), or (F) of this paragraph, the greater of                                     
06                           (i)  zero; or                                                                                 
07 (ii)  35 percent multiplied by the remainder obtained by                                                                
08 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
09 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
10 deductible for the oil under AS 43.55.160(h)(4) from the gross value at                                                 
11 the point of production of the oil produced from the leases or properties                                               
12                 during the month for which the installment payment is calculated;                                       
13 (E)  for gas produced from each lease or property in the state                                                          
14 outside the Cook Inlet sedimentary basin, other than a lease or property subject                                        
15 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of                                                
16 production of the gas produced from the lease or property during the month for                                          
17            which the installment payment is calculated, but not less than zero;                                         
18 (F)  for oil subject to AS 43.55.011(k), for each lease or                                                              
19            property, 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 under AS 43.55.160 for the oil produced from the lease or                                                    
25 property from the gross value at the point of production of the oil                                                     
26 produced from the lease or property during the month for which the                                                      
27                 installment payment is calculated;                                                                      
28 (G)  for gas subject to AS 43.55.011(j) or (o), for each lease or                                                       
29            property, the greater of                                                                                     
30                           (i)  zero; or                                                                                 
31 (ii)  13 percent of the gross value at the point of                                                                     
01 production of the gas produced from the lease or property during the                                                    
02                 month for which the installment payment is calculated;                                                  
03 (8)  an amount calculated under (7)(C) of this subsection may not                                                       
04 exceed four percent of the gross value at the point of production of the oil and gas                                    
05 produced from leases or properties subject to AS 43.55.011(p) during the month for                                      
06       which the installment payment is calculated;                                                                      
07 (9)  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and                                                  
08 (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point                                
09 of production is determined under AS 43.55.011(f)(1) or (2) but substituting the                                        
10 phrase "month for which the installment payment is calculated" in AS 43.55.011(f)(1)                                    
11       and (2) for the phrase "calendar year for which the tax is due";                                                  
12 (10)  an amount calculated under (7)(F) or (G) of this subsection for oil                                               
13 or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                   
14 carrying out the 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) for oil, but substituting in                                         
16 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
17 gas produced during the month for the amount of taxable gas produced during the                                         
18 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
19       during the month for the amount of taxable oil produced during the calendar year;                             
20 (11)  for purposes of the calculation under (5)(B)(ii) or (7)(A)(ii) of                                             
21 this subsection, a credit under this chapter may not be applied to reduce an                                        
22       installment payment to less than the applicable percentage under AS 43.55.011(f).                           
23    * Sec. 5. AS 43.55.023(b) is amended to read:                                                                      
24 (b)  [BEFORE JANUARY 1, 2014, A PRODUCER OR EXPLORER MAY                                                                
25 ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A                                                             
26 CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES                                                                     
27 INCURRED ON AND AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1,                                                            
28 2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS                                                           
29 LOCATED NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR                                                               
30 EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 45                                                             
31 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS.] For lease expenditures                                                       
01 incurred [ON AND AFTER JANUARY 1, 2016,] to explore for, develop, or produce                                            
02 oil or gas deposits located north of 68 degrees North latitude, a producer or explorer                                  
03 may elect to take a tax credit in the amount of 15 [35] percent of a carried-forward                                
04 annual loss. [FOR LEASE EXPENDITURES INCURRED ON OR AFTER                                                               
05 JANUARY 1, 2014, AND BEFORE JANUARY 1, 2017, TO EXPLORE FOR,                                                            
06 DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED SOUTH OF 68                                                             
07 DEGREES NORTH LATITUDE, A PRODUCER OR EXPLORER MAY ELECT TO                                                             
08 TAKE A TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A CARRIED-                                                             
09 FORWARD ANNUAL LOSS.] For lease expenditures incurred [ON OR AFTER                                                      
10 JANUARY 1, 2017,] to explore for, develop, or produce oil or gas deposits located                                       
11 south of 68 degrees North latitude, a producer or explorer may elect to take a tax credit                               
12 in the amount of 15 percent of a carried-forward annual loss, except that a credit for                                  
13 lease expenditures incurred to explore for, develop, or produce oil or gas deposits                                     
14 located in the Cook Inlet sedimentary basin may only be taken if the expenditure is                                     
15 incurred before January 1, 2018. A credit under this subsection may be applied against                                  
16       a tax levied by AS 43.55.011(e). For purposes of this subsection,                                                 
17 (1)  a carried-forward annual loss is the amount of a producer's or                                                     
18 explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                           
19 previous calendar year that was not deductible in calculating production tax values for                                 
20       that calendar year under AS 43.55.160;                                                                            
21 (2)  for lease expenditures incurred on or after January 1, 2017, any                                                   
22 reduction under AS 43.55.160(f) or (g) is added back to the calculation of production                                   
23 tax values for that calendar year under AS 43.55.160 for the determination of a                                         
24       carried-forward annual loss.                                                                                      
25    * Sec. 6. AS 43.55.023(d) is amended to read:                                                                      
26 (d)  A person that is entitled to take a tax credit under this section that wishes                                      
27 to transfer the unused credit to another person [OR OBTAIN A CASH PAYMENT                                               
28 UNDER AS 43.55.028] may apply to the department for a transferable tax credit                                           
29 certificate. A person that is entitled to take a tax credit under (a) or (l) of this                              
30 section that wishes to obtain a cash payment under AS 43.55.028 may apply to                                        
31 the department for a transferable tax credit certificate. An application under this                                 
01 subsection must be in a form prescribed by the department and must include                                              
02 supporting information and documentation that the department reasonably requires.                                       
03 The department shall grant or deny an application, or grant an application as to a lesser                               
04 amount than that claimed and deny it as to the excess, not later than 120 days after the                                
05 latest of (1) March 31 of the year following the calendar year in which the qualified                                   
06 capital expenditure or carried-forward annual loss for which the credit is claimed was                                  
07 incurred; (2) the date the statement required under AS 43.55.030(a) or (e) was filed for                                
08 the calendar year in which the qualified capital expenditure or carried-forward annual                                  
09 loss for which the credit is claimed was incurred; or (3) the date the application was                                  
10 received by the department. If, based on the information then available to it, the                                      
11 department is reasonably satisfied that the applicant is entitled to a credit, the                                      
12 department shall issue the applicant a transferable tax credit certificate for the amount                               
13       of the credit. A certificate issued under this subsection does not expire.                                        
14    * Sec. 7. AS 43.55.024(j) is amended to read:                                                                      
15 (j)  A producer may apply against the producer's tax liability for the calendar                                         
16 year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for                                  
17 each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in                                   
18 the gross value at the point of production under AS 43.55.160(f) or (g) and that is                                     
19 produced during a calendar year after December 31, 2013, from leases or properties                                      
20 north of 68 degrees North latitude. A tax credit under this subsection may not reduce a                                 
21 producer's tax liability for a calendar year under AS 43.55.011(e) below the amount                                     
22 calculated under AS 43.55.011(f). The amount of the tax credit for a barrel of taxable                                  
23       oil subject to this subsection produced during a month of the calendar year is                                    
24 (1)  [$8 FOR EACH BARREL OF TAXABLE OIL IF THE                                                                          
25 AVERAGE GROSS VALUE AT THE POINT OF PRODUCTION FOR THE                                                                  
26       MONTH IS LESS THAN $80 A BARREL;                                                                                  
27 (2)  $7 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE                                                                   
28 GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS                                                                 
29 GREATER THAN OR EQUAL TO $80 A BARREL, BUT LESS THAN $90 A                                                              
30       BARREL;                                                                                                           
31 (3)  $6 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE                                                                   
01       GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS                                                           
02       GREATER THAN OR EQUAL TO $90 A BARREL, BUT LESS THAN $100 A                                                       
03       BARREL;                                                                                                           
04                 (4)]  $5 for each barrel of taxable oil if the average gross value at the                               
05       point of production for the month is [GREATER THAN OR EQUAL TO $100 A                                             
06       BARREL, BUT] less than $110 a barrel;                                                                             
07                 (2) [(5)]  $4 for each barrel of taxable oil if the average gross value at                          
08       the point of production for the month is greater than or equal to $110 a barrel, but less                         
09       than $120 a barrel;                                                                                               
10 (3) [(6)]  $3 for each barrel of taxable oil if the average gross value at                                          
11 the point of production for the month is greater than or equal to $120 a barrel, but less                               
12       than $130 a barrel;                                                                                               
13 (4) [(7)]  $2 for each barrel of taxable oil if the average gross value at                                          
14 the point of production for the month is greater than or equal to $130 a barrel, but less                               
15       than $140 a barrel;                                                                                               
16 (5) [(8)]  $1 for each barrel of taxable oil if the average gross value at                                          
17 the point of production for the month is greater than or equal to $140 a barrel, but less                               
18       than $150 a barrel;                                                                                               
19 (6) [(9)]  zero if the average gross value at the point of production for                                           
20       the month is greater than or equal to $150 a barrel.                                                              
21    * Sec. 8. AS 43.55.028(a) is amended to read:                                                                      
22 (a)  The oil and gas tax credit fund is established as a separate fund of the state.                                    
23 The purpose of the fund is to purchase transferable tax credit certificates issued under                                
24 AS 43.55.023 for a tax credit earned under AS 43.55.023(a) or (l) and production                                  
25 tax credit certificates issued under AS 43.55.025 and to pay refunds and payments                                       
26       claimed under AS 43.20.046, 43.20.047, or 43.20.053.                                                              
27    * Sec. 9. AS 43.55.028(e) is amended to read:                                                                      
28 (e)  The department, on the written application of a person to whom a                                                   
29 transferable tax credit certificate has been issued under AS 43.55.023(d) or former                                     
30 AS 43.55.023(m) or to whom a production tax credit certificate has been issued under                                    
31 AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                                          
01 purchase, in whole or in part, the certificate. The department may not purchase a total                                 
02 of more than $35,000,000 [$70,000,000] in tax credit certificates from a person in a                                
03 calendar year. Before purchasing a certificate or part of a certificate, the department                                 
04       shall find that                                                                                                   
05 (1)  the calendar year of the purchase is not earlier than the first                                                    
06 calendar year for which the credit shown on the certificate would otherwise be allowed                                  
07       to be applied against a tax;                                                                                      
08 (2)  the application is not the result of the division of a single entity into                                          
09 multiple entities that would reasonably be expected to apply as a single entity if the                                  
10       $35,000,000 [$70,000,000] limitation in this subsection did not exist;                                        
11 (3)  the applicant's total tax liability under AS 43.55.011(e), after                                                   
12 application of all available tax credits, for the calendar year in which the application is                             
13       made is zero;                                                                                                     
14 (4)  the applicant's average daily production of oil and gas taxable                                                    
15 under AS 43.55.011(e) during the calendar year preceding the calendar year in which                                     
16 the application is made was not more than 15,000 [50,000] BTU equivalent barrels;                                   
17       and                                                                                                               
18 (5)  the purchase is consistent with this section and regulations adopted                                               
19       under this section.                                                                                               
20    * Sec. 10. AS 43.55.150 is amended by adding a new subsection to read:                                             
21 (d)  For purposes of calculating the tax under this chapter, the gross value at                                         
22       the point of production may not be less than zero.                                                                
23    * Sec. 11. AS 43.55.028(g)(3) is repealed.                                                                         
24    * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to                         
25 read:                                                                                                                   
26 APPLICABILITY. (a) The limitations on the use of tax credits in AS 43.55.011(q),                                        
27 added by sec. 3 of this Act, and the adjustment to the calculation of a tax payment under                               
28 AS 43.55.020(a)(11), added by sec. 4 of this Act, apply to credits applied to reduce a tax                              
29 liability for a tax year starting on or after the effective date of secs. 3 and 4 of this Act.                          
30 (b)  AS 43.55.023(b), as amended by sec. 5 of this Act, applies to lease expenditures                                   
31 incurred on or after the effective date of sec. 5 of this Act.                                                          
01    * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to                         
02 read:                                                                                                                   
03 TRANSITION. Notwithstanding AS 43.55.023(d), as amended by sec. 6 of this Act,                                          
04 and AS 43.55.028(a), as amended by sec. 8 of this Act, the Department of Revenue may                                    
05 purchase a transferable tax credit certificate that was issued under AS 43.55.023(d) for a                              
06 credit earned under AS 43.55.023(b) before the effective date of secs. 6 and 8 of this Act,                             
07 under AS 43.55.023(d) and 43.55.028(a), as those subsections read on the day before the                                 
08 effective date of secs. 6 and 8 of this Act.                                                                            
09    * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to                         
10 read:                                                                                                                   
11       RETROACTIVITY. Section 1 of this Act is retroactive to January 1, 2017.                                           
12    * Sec. 15. Sections 1 and 14 of this Act take effect immediately under AS 01.10.070(c).                            
13    * Sec. 16. Except as provided in sec. 15 of this Act, this Act takes effect January 1, 2018.