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CSHB 111(RES): "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; relating to lease expenditures; relating to information concerning oil and gas taxes and tax credits, including information about expenditures that must be provided to claim an oil and gas production tax credit for those expenditures; relating to the disclosure of that information to the public or a member of the legislature; relating to a legislative working group; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 111(RES)                                                                    
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; relating to lease                                         
03 expenditures; relating to information concerning oil and gas taxes and tax credits,                                     
04 including information about expenditures that must be provided to claim an oil and gas                                  
05 production tax credit for those expenditures; relating to the disclosure of that                                        
06 information to the public or a member of the legislature; relating to a legislative                                     
07 working group; and providing for an effective date."                                                                    
08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
09    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
10 to read:                                                                                                                
11       LEGISLATIVE INTENT. It is the intent of the legislature to, contingent on the                                     
12 passage of a fiscal plan, purchase a substantial portion of outstanding transferable and                                
13 production tax credit certificates issued before the effective date of this Act under AS 43.55.                         
01    * Sec. 2. AS 43.05.225 is amended to read:                                                                         
02            Sec. 43.05.225. Interest. Unless otherwise provided,                                                       
03                 (1)  a delinquent tax                                                                                   
04 (A)  under this title, before January 1, 2014, bears interest in                                                        
05 each calendar quarter at the rate of five percentage points above the annual rate                                       
06 charged member banks for advances by the 12th Federal Reserve District as of                                            
07 the first day of that calendar quarter, or at the annual rate of 11 percent,                                            
08            whichever is greater, compounded quarterly as of the last day of that quarter;                               
09                      (B)  under this title, on and after January 1, 2014, except as                                     
10 provided in (C) of this paragraph, bears interest in each calendar quarter at the                                       
11 rate of three percentage points above the annual rate charged member banks                                              
12 for advances by the 12th Federal Reserve District as of the first day of that                                           
13            calendar quarter;                                                                                            
14                      (C)  under AS 43.55, on and after January 1, 2017,                                                 
15 [(i)  FOR THE FIRST THREE YEARS AFTER A TAX                                                                             
16 BECOMES DELINQUENT,] bears interest in each calendar quarter at                                                         
17 the rate of seven percentage points above the annual rate charged                                                       
18 member banks for advances by the 12th Federal Reserve District as of                                                    
19 the first day of that calendar quarter, compounded quarterly as of the                                                  
20                 last day of that quarter; [AND                                                                          
21 (ii)  AFTER THE FIRST THREE YEARS AFTER A                                                                               
22                 TAX BECOMES DELINQUENT, DOES NOT BEAR INTEREST;]                                                        
23                 (2)  the interest rate is 12 percent a year for                                                         
24                      (A)  delinquent fees payable under AS 05.15.095(c); and                                            
25 (B)  unclaimed property that is not timely paid or delivered, as                                                        
26            allowed by AS 34.45.470(a).                                                                                  
27    * Sec. 3. AS 43.05.230(a) is amended to read:                                                                      
28 (a)  It is unlawful for a current or former officer, employee, or agent of the                                          
29 state to divulge the amount of income or the particulars set out or disclosed in a report                               
30       or return made under this title, except                                                                           
31 (1)  in connection with official investigations or proceedings of the                                                   
01       department, whether judicial or administrative, involving taxes due under this title;                             
02                 (2)  in connection with official investigations or proceedings of the                                   
03       child support enforcement agency, whether judicial or administrative, involving child                             
04       support obligations imposed or imposable under AS 25 or AS 47;                                                    
05                 (3)  as provided in AS 38.05.036 pertaining to audit functions of the                                   
06       Department of Natural Resources;                                                                                  
07                 (4)  as provided in AS 43.05.405 - 43.05.499; and                                                       
08                 (5)  as otherwise provided in this section, AS 43.55.030(g),                                        
09       43.55.165(n), or 43.55.890 [OR AS 43.55.890].                                                                 
10    * Sec. 4. AS 43.05.230(l) is amended to read:                                                                      
11 (l)  The [FOR TAX CREDIT CERTIFICATES PURCHASED BY THE                                                              
12 DEPARTMENT IN THE PRECEDING CALENDAR YEAR UNDER AS 43.55.028,                                                           
13 THE] department shall make the following information public by April 30 of each                                         
14       year:                                                                                                             
15 (1)  for tax credit certificates issued or purchased by the                                                         
16       department in the preceding calendar year under AS 43.55.028:                                                 
17 (A)  the name of each person to which a transferable tax                                                        
18 certificate was issued or from which the department purchased a transferable                                        
19            tax credit certificate; and                                                                                  
20 (B) [(2)]  the aggregate amount of the tax credit certificates                                                      
21            purchased from the person in the preceding calendar year;                                                
22 (C)  the aggregate amount of the tax credit certificates                                                            
23            issued to the person in the preceding calendar year; and                                                 
24 (2)  unless otherwise prohibited by law, information submitted                                                      
25       during the previous calendar year under AS 43.55.030(a)(10) and (e)(3).                                     
26    * Sec. 5. AS 43.05.230 is amended by adding a new subsection to read:                                              
27 (m)  The department may disclose confidential tax information, documents, or                                            
28 other materials related to a credit for oil and gas investment, exploration, production,                                
29 delivery, storage, or use against a tax imposed under AS 43.20 or AS 43.55 to a                                         
30 legislator, an agent of a legislator or a legislative committee, or a contractor of a                                   
31       legislator or a legislative committee if                                                                          
01                 (1)  the information is disclosed during an executive session of a                                      
02       committee hearing or an executive session of a meeting of one house of the legislature                            
03       as a committee of the whole;                                                                                      
04                 (2)  only legislators, agents, and contractors complying with the                                       
05       remainder of this subsection are in attendance at the committee meeting;                                          
06                 (3)  written information, documents, or other materials are clearly                                     
07       labeled as confidential tax information;                                                                          
08                 (4)  the legislator, agent, or contractor has executed an agreement with                                
09       the department                                                                                                    
10 (A)  that acknowledges that tax information, documents, and                                                             
11            materials received under this subsection are confidential by law;                                            
12 (B)  that acknowledges that it is illegal to publicly disclose                                                          
13 confidential tax information, documents, or materials received under this                                               
14            subsection unless the information is otherwise publicly available; and                                       
15                      (C)  in which the legislator, agent, or contractor agrees not to                                   
16 (i)  disclose the information received during the meeting                                                               
17 or the contents of documents or materials viewed during a committee                                                     
18                 meeting under this section; and                                                                         
19 (ii)  remove any written information, documents, or                                                                     
20                 materials from the physical location of the committee meeting.                                        
21    * Sec. 6. AS 43.55.011(f) is amended to read:                                                                    
22            (f)  The levy of tax under (e) of this section for                                                           
23 (1)  oil and gas produced before January 1, 2018 [JANUARY 1,                                                        
24 2022], from leases or properties that include land north of 68 degrees North latitude,                                  
25       other than gas subject to (o) of this section, may not be less than                                               
26 (A)  four 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 more than $25;                                                                                            
30 (B)  three 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 $20 but not over $25;                                                                                
03 (C)  two 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 $17.50 but not over $20;                                                                             
07 (D)  one 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 over $15 but not over $17.50; or                                                                          
11 (E)  zero percent of the gross value at the point of production                                                         
12 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
13 the United States West Coast during the calendar year for which the tax is due                                          
14            is $15 or less; [AND]                                                                                        
15 (2)  gas [OIL] produced on and after January 1, 2018, and before                                                
16 January 1, 2022, from leases or properties that include land north of 68 degrees North                                  
17       latitude, other than gas subject to (o) of this section, may not be less than                                 
18 (A)  four percent of the gross value at the point of production                                                         
19 when the average price per barrel for Alaska North Slope crude oil for sale on                                          
20 the United States West Coast during the calendar year for which the tax is due                                          
21            is less [MORE] than $50; or [$25;]                                                                   
22 (B)  five [THREE] percent of the gross value at the point of                                                        
23 production when the average price per barrel for Alaska North Slope crude oil                                           
24 for sale on the United States West Coast during the calendar year for which the                                         
25            tax is due is $50 or more; and                                                                           
26 (3)  oil produced on and after January 1, 2018, from leases or                                                      
27 properties that include land north of 68 degrees North latitude may not be less                                     
28       than                                                                                                          
29 (A)  four percent of the gross value at the point of                                                                
30 production when the average price per barrel for Alaska North Slope                                                 
31 crude oil for sale on the United States West Coast during the calendar                                              
01            year for which the tax is due is less than $50; or                                                       
02 (B)  five percent of the gross value at the point of production                                                     
03 when the average price per barrel for Alaska North Slope crude oil for                                              
04 sale on the United States West Coast during the calendar year for which                                             
05            the tax is due is $50 or more [OVER $20 BUT NOT OVER $25;                                                
06 (C)  TWO PERCENT OF THE GROSS VALUE AT THE                                                                              
07 POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                                   
08 FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                                 
09 STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                                    
10            THE TAX IS DUE IS OVER $17.50 BUT NOT OVER $20;                                                              
11 (D)  ONE PERCENT OF THE GROSS VALUE AT THE                                                                              
12 POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                                   
13 FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                                 
14 STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                                    
15            THE TAX IS DUE IS OVER $15 BUT NOT OVER $17.50; OR                                                           
16 (E)  ZERO PERCENT OF THE GROSS VALUE AT THE                                                                             
17 POINT OF PRODUCTION WHEN THE AVERAGE PRICE PER BARREL                                                                   
18 FOR ALASKA NORTH SLOPE CRUDE OIL FOR SALE ON THE UNITED                                                                 
19 STATES WEST COAST DURING THE CALENDAR YEAR FOR WHICH                                                                    
20            THE TAX IS DUE IS $15 OR LESS].                                                                              
21    * Sec. 7. AS 43.55.011 is amended by adding new subsections to read:                                               
22 (q)  Except as otherwise provided in this subsection, a credit under this chapter                                       
23 may not be applied to reduce the tax determined under (f) of this section.  A credit                                    
24 under AS 43.55.024(i) may reduce the tax determined under (f) of this section, but not                                  
25       below                                                                                                             
26 (1)  for gas produced on and after January 1, 2018, and before                                                          
27       January 1, 2022,                                                                                                  
28 (A)  four percent of the adjusted gross value at the point of                                                           
29 production when the average price per barrel for Alaska North Slope crude oil                                           
30 for sale on the United States West Coast during the calendar year for which the                                         
31            tax is due is less than $50; or                                                                              
01 (B)  five percent of the adjusted gross value at the point of                                                           
02 production when the average price per barrel for Alaska North Slope crude oil                                           
03 for sale on the United States West Coast during the calendar year for which the                                         
04            tax is due is $50 or more;                                                                                   
05                 (2)  for oil produced on and after January 1, 2018,                                                     
06 (A)  four percent of the adjusted gross value at the point of                                                           
07 production when the average price per barrel for Alaska North Slope crude oil                                           
08 for sale on the United States West Coast during the calendar year for which the                                         
09            tax is due is less than $50; or                                                                              
10 (B)  five percent of the adjusted gross value at the point of                                                           
11 production when the average price per barrel for Alaska North Slope crude oil                                           
12 for sale on the United States West Coast during the calendar year for which the                                         
13            tax is due is $50 or more.                                                                                 
14 (r)  The total amount of tax credits received under AS 43.55.024(i) or (j) that a                                       
15 producer applies against the tax levied by this section for a calendar year may not                                     
16 exceed the sum of the amount of the tax credits or fractions of tax credits that are                                    
17 allowed under AS 43.55.020(a) to be subtracted in calculating the installment                                           
18       payments of estimated tax for each month for that producer in the calendar year.                                  
19 (s)  In (q) of this section, "adjusted gross value at the point of production"                                          
20 means the gross value at the point of production less a reduction from the gross value                                  
21       at the point of production under AS 43.55.160(f) or 43.55.160(f) and (g).                                         
22    * Sec. 8. AS 43.55.020(a) is amended to read:                                                                      
23 (a)  For a calendar year, a producer subject to tax under AS 43.55.011 shall pay                                        
24       the tax as follows:                                                                                               
25 (1)  for oil and gas produced before January 1, 2014, an installment                                                    
26 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                                  
27 as allowed by law, is due for each month of the calendar year on the last day of the                                    
28 following month; except as otherwise provided under (2) of this subsection, the                                         
29 amount of the installment payment is the sum of the following amounts, less 1/12 of                                     
30 the tax credits that are allowed by law to be applied against the tax levied by                                         
31 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                                    
01       not be less than zero:                                                                                            
02 (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                                              
03 produced from leases or properties in the state outside the Cook Inlet                                                  
04 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                                          
05            the greater of                                                                                               
06                           (i)  zero; or                                                                                 
07 (ii)  the sum of 25 percent and the tax rate calculated for                                                             
08 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
09 by 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 the leases or                                               
13 properties during the month for which the installment payment is                                                        
14                 calculated;                                                                                             
15 (B)  for oil and gas produced from leases or properties subject                                                         
16            to AS 43.55.011(f), the greatest of                                                                          
17                           (i)  zero;                                                                                    
18 (ii)  zero percent, one percent, two percent, three                                                                     
19 percent, or four percent, as applicable, of the gross value at the point of                                             
20 production of the oil and gas produced from the leases or properties                                                    
21                 during the month for which the installment payment is calculated; or                                    
22 (iii)  the sum of 25 percent and the tax rate calculated for                                                            
23 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
24 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
25 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
26 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
27 at the point of production of the oil and gas produced from those leases                                                
28 or properties during the month for which the installment payment is                                                     
29                 calculated;                                                                                             
30 (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                                        
31            each lease or property, the greater of                                                                       
01                           (i)  zero; or                                                                                 
02 (ii)  the sum of 25 percent and the tax rate calculated for                                                             
03 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
04 by subtracting 1/12 of the producer's adjusted lease expenditures for the                                               
05 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
06 deductible under AS 43.55.160 for the oil or gas, respectively,                                                         
07 produced from the lease or property from the gross value at the point of                                                
08 production of the oil or gas, respectively, produced from the lease or                                                  
09 property during the month for which the installment payment is                                                          
10                 calculated;                                                                                             
11                      (D)  for oil and gas subject to AS 43.55.011(p), the lesser of                                     
12 (i)  the sum of 25 percent and the tax rate calculated for                                                              
13 the month under AS 43.55.011(g) multiplied by the remainder obtained                                                    
14 by 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 and gas under AS 43.55.160 from the gross value                                                  
17 at the point of production of the oil and gas produced from the leases or                                               
18 properties during the month for which the installment payment is                                                        
19                 calculated, but not less than zero; or                                                                  
20 (ii)  four percent of the gross value at the point of                                                                   
21 production of the oil and gas produced from the leases or properties                                                    
22                 during the month, but not less than zero;                                                               
23 (2)  an amount calculated under (1)(C) of this subsection for oil or gas                                                
24 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                          
25 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
26 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                          
27 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
28 gas produced during the month for the amount of taxable gas produced during the                                         
29 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
30       during the month for the amount of taxable oil produced during the calendar year;                                 
31 (3)  an installment payment of the estimated tax levied by                                                              
01 AS 43.55.011(i) for each lease or property is due for each month of the calendar year                                   
02 on the last day of the following month; the amount of the installment payment is the                                    
03       sum of                                                                                                            
04 (A)  the applicable tax rate for oil provided under                                                                     
05 AS 43.55.011(i), multiplied by the gross value at the point of production of the                                        
06 oil taxable under AS 43.55.011(i) and produced from the lease or property                                               
07            during the month; and                                                                                        
08 (B)  the applicable tax rate for gas provided under                                                                     
09 AS 43.55.011(i), multiplied by the gross value at the point of production of the                                        
10 gas taxable under AS 43.55.011(i) and produced from the lease or property                                               
11            during the month;                                                                                            
12 (4)  any amount of tax levied by AS 43.55.011, net of any credits                                                       
13 applied as allowed by law, that exceeds the total of the amounts due as installment                                     
14 payments of estimated tax is due on March 31 of the year following the calendar year                                    
15       of production;                                                                                                    
16 (5)  for oil and gas produced on and after January 1, 2014, and before                                                  
17 January 1, 2022, an installment payment of the estimated tax levied by                                                  
18 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each                                      
19 month of the calendar year on the last day of the following month; except as otherwise                                  
20 provided under (6) of this subsection, the amount of the installment payment is the                                     
21 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be                                
22 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount                                 
23       of the installment payment may not be less than zero:                                                             
24 (A)  for oil and gas not subject to AS 43.55.011(o) or (p)                                                              
25 produced from leases or properties in the state outside the Cook Inlet                                                  
26 sedimentary basin, other than leases or properties subject to AS 43.55.011(f),                                          
27            the greater of                                                                                               
28                           (i)  zero; or                                                                                 
29 (ii)  35 percent multiplied by the remainder obtained by                                                                
30 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
31 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
01 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
02 at the point of production of the oil and gas produced from the leases or                                               
03 properties during the month for which the installment payment is                                                        
04                 calculated;                                                                                             
05                      (B)  for oil and gas produced from leases or properties subject                                    
06            to AS 43.55.011(f), the greatest of                                                                          
07                           (i)  zero;                                                                                    
08                           (ii)  the percentage applicable under AS 43.55.011(f)                                     
09                 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE                                                          
10 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross                                                                  
11 value at the point of production of the oil and gas produced from the                                                   
12 leases or properties during the month for which the installment                                                         
13                 payment is calculated; or                                                                               
14 (iii)  35 percent multiplied by the remainder obtained by                                                               
15 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
16 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
17 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
18 at the point of production of the oil and gas produced from those leases                                                
19 or properties during the month for which the installment payment is                                                     
20 calculated, except that, for the purposes of this calculation, a reduction                                              
21 from the gross value at the point of production may apply for oil and                                                   
22                 gas subject to AS 43.55.160(f) or (g);                                                                  
23 (C)  for oil or gas subject to AS 43.55.011(j), (k), or (o), for                                                        
24            each lease or property, the greater of                                                                       
25                           (i)  zero; or                                                                                 
26 (ii)  35 percent multiplied by the remainder obtained by                                                                
27 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
28 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
29 deductible 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)  35 percent multiplied by the remainder obtained by                                                                 
05 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
06 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
07 deductible for the oil and gas under AS 43.55.160 from the gross value                                                  
08 at the point of production of the oil and gas produced from the leases or                                               
09 properties during the month for which the installment payment is                                                        
10                 calculated, but not less than zero; or                                                                  
11 (ii)  four percent 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, but not less than zero;                                                               
14 (6)  an amount calculated under (5)(C) of this subsection for oil or gas                                                
15 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                          
16 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
17 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in                                          
18 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
19 gas produced during the month for the amount of taxable gas produced during the                                         
20 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
21       during the month for the amount of taxable oil produced during the calendar year;                                 
22 (7)  for oil and gas produced on or after January 1, 2022, an installment                                               
23 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied                                  
24 as allowed by law, is due for each month of the calendar year on the last day of the                                    
25 following month; except as otherwise provided under (10) of this subsection, the                                        
26 amount of the installment payment is the sum of the following amounts, less 1/12 of                                     
27 the tax credits that are allowed by law to be applied against the tax levied by                                         
28 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may                                    
29       not be less than zero:                                                                                            
30 (A)  for oil produced from leases or properties subject to                                                              
31            AS 43.55.011(f), the greatest of                                                                             
01                           (i)  zero;                                                                                    
02 (ii)  the percentage applicable under AS 43.55.011(f)                                                               
03 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE                                                                          
04 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross                                                                  
05 value at the point of production of the oil produced from the leases or                                                 
06 properties during the month for which the installment payment is                                                        
07                 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 under AS 43.55.160(h)(1) from the gross value at                                                 
12 the point of production of the oil produced from those leases or                                                        
13 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                                                       
16                 subject to AS 43.55.160(f) or 43.55.160(f) and (g);                                                     
17 (B)  for oil produced before or during the last calendar year                                                           
18 under AS 43.55.024(b) for which the producer could take a tax credit under                                              
19 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet                                          
20 sedimentary basin, no part of which is north of 68 degrees North latitude, other                                        
21            than leases or properties subject to AS 43.55.011(o) or (p), the greater of                                  
22                           (i)  zero; or                                                                                 
23 (ii)  35 percent multiplied by the remainder obtained by                                                                
24 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
25 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
26 deductible for the oil under AS 43.55.160(h)(2) from the gross value at                                                 
27 the point of production of the oil produced from the leases or properties                                               
28                 during the month for which the installment payment is calculated;                                       
29 (C)  for oil and gas produced from leases or properties subject                                                         
30 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection,                                          
31            the sum 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 under AS 43.55.160(h)(3) from the gross value at                                                 
05 the point of production of the oil produced from the leases or properties                                               
06 during the month for which the installment payment is calculated, but                                                   
07                 not less than zero; and                                                                                 
08 (ii)  13 percent of the gross value at the point of                                                                     
09 production of the gas produced from the leases or properties during the                                                 
10                 month, but not less than zero;                                                                          
11 (D)  for oil produced from leases or properties in the state, no                                                        
12 part of which is north of 68 degrees North latitude, other than leases or                                               
13            properties subject to (B), (C), or (F) of this paragraph, 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)(4) 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 (E)  for gas produced from each lease or property in the state                                                          
22 outside the Cook Inlet sedimentary basin, other than a lease or property subject                                        
23 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of                                                
24 production of the gas produced from the lease or property during the month for                                          
25            which the installment payment is calculated, but not less than zero;                                         
26 (F)  for oil subject to AS 43.55.011(k), for each lease or                                                              
27            property, the greater of                                                                                     
28                           (i)  zero; or                                                                                 
29 (ii)  35 percent multiplied by the remainder obtained by                                                                
30 subtracting 1/12 of the producer's adjusted lease expenditures for the                                                  
31 calendar year of production under AS 43.55.165 and 43.55.170 that are                                                   
01 deductible under AS 43.55.160 for the oil produced from the lease or                                                    
02 property from the gross value at the point of production of the oil                                                     
03 produced from the lease or property during the month for which the                                                      
04                 installment payment is calculated;                                                                      
05                      (G)  for gas subject to AS 43.55.011(j) or (o), for each lease or                                  
06            property, the greater of                                                                                     
07                           (i)  zero; or                                                                                 
08                           (ii)  13 percent of the gross value at the point of                                           
09                 production of the gas produced from the lease or property during the                                    
10                 month for which the installment payment is calculated;                                                  
11 (8)  an amount calculated under (7)(C) of this subsection may not                                                       
12 exceed four percent of the gross value at the point of production of the oil and gas                                    
13 produced from leases or properties subject to AS 43.55.011(p) during the month for                                      
14       which the installment payment is calculated;                                                                      
15 (9)  for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and                                                  
16 (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point                                
17 of production is determined under AS 43.55.011(f)(1) or (2) but substituting the                                        
18 phrase "month for which the installment payment is calculated" in AS 43.55.011(f)(1)                                    
19       and (2) for the phrase "calendar year for which the tax is due";                                                  
20 (10)  an amount calculated under (7)(F) or (G) of this subsection for oil                                               
21 or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by                                   
22 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as                                   
23 applicable, for gas, or set out in AS 43.55.011(k) for oil, but substituting in                                         
24 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable                                   
25 gas produced during the month for the amount of taxable gas produced during the                                         
26 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced                                    
27       during the month for the amount of taxable oil produced during the calendar year;                             
28 (11)  for purposes of the calculation under (5)(B)(ii) or (7)(A)(ii) of                                             
29 this subsection, a credit under this chapter may not be applied to reduce an                                        
30 installment payment to less than the amount calculated using the applicable                                         
31       percentage under AS 43.55.011(f) or (q).                                                                    
01    * Sec. 9. AS 43.55.023(b) is amended to read:                                                                      
02 (b)  [BEFORE JANUARY 1, 2014, A PRODUCER OR EXPLORER MAY                                                                
03 ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25 PERCENT OF A                                                             
04 CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES                                                                     
05 INCURRED ON AND AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1,                                                            
06 2016, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS                                                           
07 LOCATED NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR                                                               
08 EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 45                                                             
09 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS. FOR LEASE                                                                     
10 EXPENDITURES INCURRED ON AND AFTER JANUARY 1, 2016, TO                                                                  
11 EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS LOCATED                                                            
12 NORTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR EXPLORER                                                              
13 MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 35 PERCENT OF                                                           
14 A CARRIED-FORWARD ANNUAL LOSS. FOR LEASE EXPENDITURES                                                                   
15 INCURRED ON OR AFTER JANUARY 1, 2014, AND BEFORE JANUARY 1,                                                             
16 2017, TO EXPLORE FOR, DEVELOP, OR PRODUCE OIL OR GAS DEPOSITS                                                           
17 LOCATED SOUTH OF 68 DEGREES NORTH LATITUDE, A PRODUCER OR                                                               
18 EXPLORER MAY ELECT TO TAKE A TAX CREDIT IN THE AMOUNT OF 25                                                             
19 PERCENT OF A CARRIED-FORWARD ANNUAL LOSS.] For lease expenditures                                                       
20 incurred [ON OR AFTER JANUARY 1, 2017,] to explore for, develop, or produce oil                                         
21 or gas deposits located south of 68 degrees North latitude, a producer or explorer may                                  
22 elect to take a tax credit in the amount of 15 percent of a carried-forward annual loss,                                
23 except that a credit for lease expenditures incurred to explore for, develop, or produce                                
24 oil or gas deposits located in the Cook Inlet sedimentary basin may only be taken if                                    
25 the expenditure is incurred before January 1, 2018. A credit under this subsection may                                  
26       be applied against a tax levied by AS 43.55.011(e). For purposes of this subsection,                              
27 (1)  a carried-forward annual loss is the amount of a producer's or                                                     
28 explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                           
29 previous calendar year that was not deductible in calculating production tax values for                                 
30       that calendar year under AS 43.55.160;                                                                            
31 (2)  for lease expenditures incurred on or after January 1, 2017, any                                                   
01       reduction under AS 43.55.160(f) or (g) is added back to the calculation of production                             
02       tax values for that calendar year under AS 43.55.160 for the determination of a                                   
03       carried-forward annual loss.                                                                                    
04    * Sec. 10. AS 43.55.023(c) is amended to read:                                                                     
05 (c)  A credit or portion of a credit under this section may not be used to reduce                                       
06 a person's tax liability under AS 43.55.011(e) for any calendar year below zero or the                              
07 amount calculated under AS 43.55.011(f), if applicable, and any unused credit or                                    
08 portion of a credit not used under this subsection may be applied in a later calendar                                   
09       year.                                                                                                             
10    * Sec. 11. AS 43.55.023(d) is amended to read:                                                                     
11 (d)  A person that is entitled to take a tax credit under this section that wishes                                      
12 to transfer the unused credit to another person [OR OBTAIN A CASH PAYMENT                                               
13 UNDER AS 43.55.028] may apply to the department for a transferable tax credit                                           
14 certificate. A person that is entitled to take a tax credit under (a) or (l) of this                              
15 section that wishes to obtain a cash payment under AS 43.55.028 may apply to                                        
16 the department for a transferable tax credit certificate. An application under this                                 
17 subsection must be in a form prescribed by the department and must include                                              
18 supporting information and documentation that the department reasonably requires.                                       
19 The department shall grant or deny an application, or grant an application as to a lesser                               
20 amount than that claimed and deny it as to the excess, not later than 120 days after the                                
21 latest of (1) March 31 of the year following the calendar year in which the qualified                                   
22 capital expenditure or carried-forward annual loss for which the credit is claimed was                                  
23 incurred; (2) the date the statement required under AS 43.55.030(a) or (e) was filed for                                
24 the calendar year in which the qualified capital expenditure or carried-forward annual                                  
25 loss for which the credit is claimed was incurred; or (3) the date the application was                                  
26 received by the department. If, based on the information then available to it, the                                      
27 department is reasonably satisfied that the applicant is entitled to a credit, the                                      
28 department shall issue the applicant a transferable tax credit certificate for the amount                               
29       of the credit. A certificate issued under this subsection does not expire.                                        
30    * Sec. 12. AS 43.55.024(g) is amended to read:                                                                     
31 (g)  A tax credit authorized by (c) of this section may not be applied to reduce                                        
01 a producer's tax liability for any calendar year under AS 43.55.011(e) below zero or                                
02       the amount calculated under AS 43.55.011(f), if applicable.                                                   
03    * Sec. 13. AS 43.55.024(i) is amended to read:                                                                     
04 (i)  A producer may apply against the producer's tax liability for the calendar                                         
05 year under AS 43.55.011(e) a tax credit of $5 for each barrel of oil taxable under                                      
06 AS 43.55.011(e) that receives a reduction in the gross value at the point of production                                 
07 under AS 43.55.160(f) or (g) and that is produced during a calendar year after                                          
08 December 31, 2013. A tax credit authorized by this subsection may not reduce a                                          
09 producer's tax liability for a calendar year under AS 43.55.011(e) below zero or the                                
10       amount calculated under AS 43.55.011(f) or (q), as applicable.                                                
11    * Sec. 14. AS 43.55.024(j) is amended to read:                                                                     
12 (j)  A producer may apply against the producer's tax liability for the calendar                                         
13 year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for                                  
14 each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in                                   
15 the gross value at the point of production under AS 43.55.160(f) or (g) and that is                                     
16 produced during a calendar year after December 31, 2013, from leases or properties                                      
17 north of 68 degrees North latitude. A tax credit under this subsection may not reduce a                                 
18 producer's tax liability for a calendar year under AS 43.55.011(e) below the amount                                     
19 calculated under AS 43.55.011(f). The amount of the tax credit for a barrel of taxable                                  
20       oil subject to this subsection produced during a month of the calendar year is                                    
21 (1)  $8 for each barrel of taxable oil if the average gross value at the                                                
22       point of production for the month is less than $60 [$80] a barrel;                                            
23 (2)  $7 for each barrel of taxable oil if the average gross value at the                                                
24 point of production for the month is greater than or equal to $60 [$80] a barrel, but                               
25       less than $70 [$90] a barrel;                                                                                 
26 (3)  $6 for each barrel of taxable oil if the average gross value at the                                                
27 point of production for the month is greater than or equal to $70 [$90] a barrel, but                               
28       less than $80 [$100] a barrel;                                                                                
29 (4)  $5 for each barrel of taxable oil if the average gross value at the                                                
30 point of production for the month is greater than or equal to $80 [$100] a barrel, but                              
31       less than $90 [$110] a barrel;                                                                                
01 (5)  $4 for each barrel of taxable oil if the average gross value at the                                                
02 point of production for the month is greater than or equal to $90 [$110] a barrel, but                              
03       less than $100 [$120] a barrel;                                                                               
04 (6)  $3 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 [$120] a barrel, but                             
06       less than $110 [$130] a barrel;                                                                               
07 (7)  [$2 FOR EACH BARREL OF TAXABLE OIL IF THE                                                                          
08 AVERAGE GROSS VALUE AT THE POINT OF PRODUCTION FOR THE                                                                  
09 MONTH IS GREATER THAN OR EQUAL TO $130 A BARREL, BUT LESS                                                               
10       THAN $140 A BARREL;                                                                                               
11 (8)  $1 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE                                                                   
12 GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS                                                                 
13 GREATER THAN OR EQUAL TO $140 A BARREL, BUT LESS THAN $150 A                                                            
14       BARREL;                                                                                                           
15 (9)]  zero if the average gross value at the point of production for the                                                
16       month is greater than or equal to $110 [$150] a barrel.                                                       
17    * Sec. 15. AS 43.55.025(g) is amended to read:                                                                     
18 (g)  Except as provided in (q) of this section, an [AN] explorer, other than an                                     
19 entity that is exempt from taxation under this chapter, may transfer, convey, or sell its                               
20 production tax credit certificate to any person, and any person who receives a                                          
21       production tax credit certificate may also transfer, convey, or sell the certificate.                             
22    * Sec. 16. AS 43.55.025(i) is amended to read:                                                                     
23            (i)  For a production tax credit under this section,                                                         
24 (1)  a credit may not be applied to reduce a taxpayer's tax liability for a                                         
25 calendar year under AS 43.55.011(e) below zero or the amount calculated under                                   
26       AS 43.55.011(f), if applicable [FOR A CALENDAR YEAR]; and                                                     
27 (2)  an amount of the production tax credit in excess of the amount that                                                
28 may be applied for a calendar year under this subsection may be carried forward and                                     
29 applied against the taxpayer's tax liability under AS 43.55.011(e) in one or more later                                 
30       calendar years.                                                                                                   
31    * Sec. 17. AS 43.55.025 is amended by adding a new subsection to read:                                             
01 (q)  An explorer is eligible for a tax credit of 15 percent of exploration                                              
02 expenditures incurred for drilling that results in a dry hole. A credit under this                                      
03 subsection is eligible for a tax credit certificate issued under (f)(5) of this section;                                
04 however, a tax credit certificate issued under this subsection may not be transferred                                   
05       under (g) of this section. A credit under this subsection may only be allowed if                                  
06                 (1)  the explorer does not produce oil or gas in the calendar year in                                   
07       which the credit is earned;                                                                                       
08                 (2)  all service contracts associated with the exploration activity earning                             
09       a credit under this subsection are paid in full;                                                                  
10                 (3)  the lease on which the dry hole is drilled returns to the state; and                               
11 (4)  the expenditure that is the basis for the credit is not the basis for                                              
12       another credit claimed under this chapter.                                                                        
13    * Sec. 18. AS 43.55.028(a) is amended to read:                                                                     
14 (a)  The oil and gas tax credit fund is established as a separate fund of the state.                                    
15 The purpose of the fund is to purchase transferable tax credit certificates issued under                                
16 AS 43.55.023 for a tax credit earned under AS 43.55.023(a) or (l) and production                                  
17 tax credit certificates issued under AS 43.55.025 and to pay refunds and payments                                       
18       claimed under AS 43.20.046, 43.20.047, or 43.20.053.                                                              
19    * Sec. 19. AS 43.55.028(e) is amended to read:                                                                     
20 (e)  The department, on the written application of a person to whom a                                                   
21 transferable tax credit certificate has been issued under AS 43.55.023(d) or former                                     
22 AS 43.55.023(m) or to whom a production tax credit certificate has been issued under                                    
23 AS 43.55.025(f), may use available money in the oil and gas tax credit fund to                                          
24 purchase, in whole or in part, the certificate. The department may not purchase a total                                 
25 of more than $35,000,000 [$70,000,000] in tax credit certificates from a person in a                                
26 calendar year. Before purchasing a certificate or part of a certificate, the department                                 
27       shall find that                                                                                                   
28 (1)  the calendar year of the purchase is not earlier than the first                                                    
29 calendar year for which the credit shown on the certificate would otherwise be allowed                                  
30       to be applied against a tax;                                                                                      
31 (2)  the application is not the result of the division of a single entity into                                          
01       multiple entities that would reasonably be expected to apply as a single entity if the                            
02       $35,000,000 [$70,000,000] limitation in this subsection did not exist;                                        
03                 (3)  the applicant's total tax liability under AS 43.55.011(e), after                                   
04       application of all available tax credits, for the calendar year in which the application is                       
05       made is zero;                                                                                                     
06 (4)  the applicant's average daily production of oil and gas taxable                                                    
07 under AS 43.55.011(e) during the calendar year preceding the calendar year in which                                     
08 the application is made was not more than 15,000 [50,000] BTU equivalent barrels;                                   
09       and                                                                                                               
10 (5)  the purchase is consistent with this section and regulations adopted                                               
11       under this section.                                                                                               
12    * Sec. 20. AS 43.55.030(a) is amended to read:                                                                     
13 (a)  A producer that produces oil or gas from a lease or property in the state                                          
14 during a calendar year, whether or not any tax payment is due under AS 43.55.020(a)                                     
15 for that oil or gas, shall file with the department on March 31 of the following year a                                 
16 statement, under oath, in a form prescribed by the department, giving, with other                                       
17       information required under a regulation adopted by the department, the following:                             
18 (1)  a description of each lease or property from which oil or gas was                                                  
19 produced, by name, legal description, lease number, or accounting codes assigned by                                     
20       the department;                                                                                                   
21 (2)  the names of the producer and, if different, the person paying the                                                 
22       tax, if any;                                                                                                      
23 (3)  the gross amount of oil and the gross amount of gas produced from                                                  
24 each lease or property, separately identifying the gross amount of gas produced from                                    
25 each oil and gas lease to which an effective election under AS 43.55.014(a) applies,                                    
26 the amount of gas delivered to the state under AS 43.55.014(b), and the percentage of                                   
27       the gross amount of oil and gas owned by the producer;                                                            
28 (4)  the gross value at the point of production of the oil and of the gas                                               
29 produced from each lease or property owned by the producer and the costs of                                             
30       transportation of the oil and gas;                                                                                
31 (5)  the name of the first purchaser and the price received for the oil and                                             
01       for the gas, unless relieved from this requirement in whole or in part by the                                     
02       department;                                                                                                       
03                 (6)  the producer's qualified capital expenditures, as defined in                                       
04       AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other                               
05       payments or credits under AS 43.55.170;                                                                           
06                 (7)  the production tax values of the oil and gas under AS 43.55.160(a)                                 
07       or of the oil under AS 43.55.160(h), as applicable;                                                               
08                 (8)  any claims for tax credits to be applied; [AND]                                                    
09                 (9)  calculations showing the amounts, if any, that were or are due                                     
10       under AS 43.55.020(a) and interest on any underpayment or overpayment; and                                    
11 (10)  for each expenditure that is the basis for a credit claimed                                                   
12 under AS 43.55.023 or 43.55.025, a description of the expenditure, a detailed                                       
13 description of the purpose of the expenditure, and a description of the lease or                                    
14       property for which the expenditure was incurred.                                                              
15    * Sec. 21. AS 43.55.030(e) is amended to read:                                                                     
16 (e)  An explorer or producer that incurs a lease expenditure under                                                      
17 AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar                                       
18 year but does not produce oil or gas from a lease or property in the state during the                                   
19 calendar year shall file with the department, on March 31 of the following year, a                                      
20 statement, under oath, in a form prescribed by the department, giving, with other                                       
21       information required under a regulation adopted by the department, the following:                             
22 (1)  the explorer's or producer's qualified capital expenditures, as                                                    
23 defined in AS 43.55.023, other lease expenditures under AS 43.55.165, and                                               
24       adjustments or other payments or credits under AS 43.55.170; [AND]                                                
25 (2)  if the explorer or producer receives a payment or credit under                                                     
26 AS 43.55.170, calculations showing whether the explorer or producer is liable for a                                     
27       tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount; and                                         
28 (3)  for each expenditure that is the basis for a credit claimed under                                              
29 this chapter, a description of the expenditure, a detailed description of the                                       
30 purpose of the expenditure, and a description of the lease or property for which                                    
31       the expenditure was incurred.                                                                                 
01    * Sec. 22. AS 43.55.030 is amended by adding a new subsection to read:                                             
02 (g)  Notwithstanding AS 43.05.230(a), the department shall annually report the                                          
03 information submitted during the previous calendar year under (a)(10) and (e)(3) of                                     
04 this section to the legislature within 10 days after the convening of each regular                                      
05 legislative session. The department shall deliver the information to the senate secretary                               
06 and the chief clerk of the house of representatives and notify the legislature that the                                 
07       information is available.                                                                                         
08    * Sec. 23. AS 43.55.150 is amended by adding a new subsection to read:                                             
09            (d)  For purposes of calculating the tax under this chapter, the gross value at                              
10       the point of production may not be less than zero.                                                                
11    * Sec. 24. AS 43.55.160(e) is amended to read:                                                                     
12 (e)  Any adjusted lease expenditures under AS 43.55.165 and 43.55.170 that                                              
13 would otherwise be deductible by a producer in a calendar year but whose deduction                                      
14 would cause an annual production tax value calculated under (a)(1) or (h) of this                                       
15 section of taxable oil or gas produced during the calendar year to be less than zero                                    
16 may be used to establish a carried-forward annual loss under AS 43.55.023(b) or                                     
17 43.55.165(a)(3). However, the department shall provide by regulation a method to                                    
18 ensure that, for a period for which a producer's tax liability is limited by                                            
19 AS 43.55.011(j), (k), (o), or (p), any adjusted lease expenditures under AS 43.55.165                                   
20 and 43.55.170 that would otherwise be deductible by a producer for that period but                                      
21 whose deduction would cause a production tax value calculated under (a)(1)(C), (D),                                     
22 (E), or (F), or (h)(3) of this section to be less than zero are accounted for as though the                             
23 adjusted lease expenditures had first been used as deductions in calculating the                                        
24 production tax values of oil or gas subject to any of the limitations under                                             
25 AS 43.55.011(j), (k), (o), or (p) that have positive production tax values so as to                                     
26 reduce the tax liability calculated without regard to the limitation to the maximum                                     
27 amount provided for under the applicable provision of AS 43.55.011(j), (k), (o), or (p).                                
28 Only the amount of those adjusted lease expenditures remaining after the accounting                                     
29 provided for under this subsection may be used to establish a carried-forward annual                                    
30 loss under AS 43.55.023(b) or 43.55.165(a)(3). In this subsection, "producer" includes                              
31       "explorer."                                                                                                       
01    * Sec. 25. AS 43.55.165(a) is amended to read:                                                                     
02            (a)  Except as provided in (j) and (k) of this section, for purposes of this                                 
03       chapter, a producer's lease expenditures for a calendar year are                                                  
04                 (1)  costs, other than items listed in (e) of this section, that are                                    
05 (A)  incurred by the producer during the calendar year after                                                            
06 March 31, 2006, to explore for, develop, or produce oil or gas deposits located                                         
07 within the producer's leases or properties in the state or, in the case of land in                                      
08 which the producer does not own an operating right, operating interest, or                                              
09 working interest, to explore for oil or gas deposits within other land in the                                           
10            state; and                                                                                                   
11 (B)  allowed by the department by regulation, based on the                                                              
12 department's determination that the costs satisfy the following three                                                   
13            requirements:                                                                                                
14 (i)  the costs must be incurred upstream of the point of                                                                
15                 production of oil and gas;                                                                              
16 (ii)  the costs must be ordinary and necessary costs of                                                                 
17 exploring for, developing, or producing, as applicable, oil or gas                                                      
18                 deposits; and                                                                                           
19 (iii)  the costs must be direct costs of exploring for,                                                                 
20                 developing, or producing, as applicable, oil or gas deposits; [AND]                                     
21 (2)  a reasonable allowance for that calendar year, as determined under                                                 
22 regulations adopted by the department, for overhead expenses that are directly related                                  
23       to exploring for, developing, or producing, as applicable, the oil or gas deposits; and                       
24 (3)  50 percent of the lease expenditures incurred in a previous                                                    
25       year, subject to (m) and (n) of this section, that                                                            
26 (A)  met the requirements of AS 43.55.160(e) in the year that                                                       
27            the lease expenditures were incurred;                                                                    
28 (B)  have not been deducted in the determination of the                                                             
29 production tax value of oil and gas under AS 43.55.160(a) in a previous                                             
30            calendar year;                                                                                           
31                      (C)  were not the basis of a credit under this title; and                                      
01 (D)  were incurred to explore for, develop, or produce an oil                                                       
02            or gas deposit located north of 68 degrees North latitude.                                               
03    * Sec. 26. AS 43.55.165 is amended by adding new subsections to read:                                              
04 (m)  After the 50 percent reduction under (a)(3) of this section, lease                                                 
05 expenditures carried forward under (a)(3) of this section shall accrue interest at seven                                
06 percentage points above the annual rate charged member banks for advances by the                                        
07 12th Federal Reserve District as of the first day of the calendar year, compounded                                      
08 annually. Interest under this subsection begins to accrue on January 1 of the calendar                                  
09 year immediately following the calendar year in which the lease expenditures were                                       
10 incurred and no longer accrues on December 31 of the calendar year immediately                                          
11 preceding the calendar year in which the carried-forward lease expenditures were                                        
12 applied. Interest accrued under this subsection has no value other than as a lease                                      
13       expenditure under this section. Interest may not accrue                                                           
14                 (1)  for a partial calendar year; or                                                                    
15                 (2)  for more than seven calendar years.                                                                
16 (n)  The Department of Natural Resources shall adopt regulations that require                                           
17 the pre-approval of lease expenditures carried forward under (a)(3) of this section.                                    
18 Regulations under this subsection may add additional requirements for or restrictions                                   
19 on the ability of a producer or explorer to carry forward a lease expenditure under                                     
20 (a)(3) of this section. For a lease expenditure to qualify under (a)(3) of this section, a                              
21 producer or explorer shall provide to the Department of Natural Resources the                                           
22 information necessary to determine whether a lease expenditure qualifies to be carried                                  
23       forward under regulations adopted under this subsection.                                                          
24    * Sec. 27. AS 43.55.028(g)(3) and 43.55.029 are repealed.                                                          
25    * Sec. 28. The uncodified law of the State of Alaska is amended by adding a new section to                         
26 read:                                                                                                                   
27 LEGISLATIVE WORKING GROUP. (a) A legislative working group is established                                               
28 to analyze the Cook Inlet fiscal regime for oil and gas, review the state's tax structure and                           
29 rates on oil and gas produced south of 68 degrees North latitude, recommend changes to the                              
30 legislature for consideration during the Second Regular Session of the Thirtieth Alaska State                           
31 Legislature, and develop terms for a comprehensive fiscal regime, including                                             
01            (1)  a tax structure that accounts for the unique circumstances for each oil and                             
02 gas producing area south of 68 degrees North latitude;                                                                  
03            (2)  incentives other than direct monetary support from the state for the                                    
04 exploration, development, and production of oil and gas south of 68 degrees North latitude;                             
05            (3)  consideration of the competitiveness of the area south of 68 degrees North                              
06 latitude to attract new oil and gas development;                                                                        
07            (4)  consideration of the unique market considerations of the Cook Inlet                                     
08 sedimentary basin and the need to support energy supply security for communities in                                     
09 Southcentral Alaska;                                                                                                    
10 (5)  alternative means of state support for the exploration, development, and                                           
11 production of oil and gas in the Cook Inlet sedimentary basin, including loan guarantees or                             
12 other financial support through the Alaska Industrial Development and Export Authority, or                              
13 other state corporation or entity;                                                                                      
14 (6)  the applicability of the recommended tax structure to gas currently subject                                        
15 to AS 43.55.011(o).                                                                                                     
16 (b)  The recommended changes under (a) of this section may not include refundable or                                    
17 deductible tax credits or carried-forward lease expenditures.                                                           
18       (c)  The working group consists of                                                                                
19 (1)  two co-chairs, one of whom is a member of the house of representatives                                             
20 appointed by the speaker of the house of representatives, and one of whom is a member of the                            
21 senate appointed by the president of the senate; and                                                                    
22 (2)  members appointed by the co-chairs; members must be legislators and                                                
23 must include members of the majority and minority caucuses.                                                             
24 (d)  The co-chairs of the working group may form an advisory group to the working                                       
25 group, composed of members who are not legislators and who have expertise and skills to                                 
26 assist in the review and development of a new plan for the tax structure and rates on oil and                           
27 gas produced south of 68 degrees North latitude. The members of an advisory group may                                   
28 include commissioners or employees of state departments, members of the oil and gas                                     
29 industry or trade associations, and economists.                                                                         
30 (e)  The working group may be supported by legislative consultants under contract                                       
31 through the Legislative Budget and Audit Committee.                                                                     
01    * Sec. 29. The uncodified law of the State of Alaska is amended by adding a new section to                         
02 read:                                                                                                                   
03 APPLICABILITY. (a) The additional limitations on the use of tax credits in                                              
04 AS 43.55.011(q) and (r), added by sec. 7 of this Act, AS 43.55.023(c), as amended by sec. 10                            
05 of this Act, AS 43.55.024(g), as amended by sec. 12 of this Act, AS 43.55.024(i), as amended                            
06 by sec. 13 of this Act, and AS 43.55.025(i), as amended by sec. 16 of this Act, and the                                 
07 adjustment to the calculation of a tax payment under AS 43.55.020(a)(11), added by sec. 8 of                            
08 this Act, apply to credits applied to reduce a tax liability for a tax year starting on or after the                    
09 effective date of secs. 7, 8, 10, 12, 13, and 16 of this Act.                                                           
10 (b)  AS 43.55.023(b), as amended by sec. 9 of this Act, applies to lease expenditures                                   
11 incurred on or after the effective date of sec. 9 of this Act.                                                          
12 (c)  The repeal of AS 43.55.029 by sec. 27 of this Act applies to a credit applied for on                               
13 or after the effective date of sec. 27 of this Act.                                                                     
14    * Sec. 30. The uncodified law of the State of Alaska is amended by adding a new section to                         
15 read:                                                                                                                   
16 TRANSITION: CARRIED-FORWARD LOSSES AND LEASE EXPENDITURES.                                                              
17 (a) Notwithstanding AS 43.55.023(d), as amended by sec. 11 of this Act, and                                             
18 AS 43.55.028(a), as amended by sec. 18 of this Act, the Department of Revenue may                                       
19 purchase a transferable tax credit certificate that was issued under AS 43.55.023(d) for a                              
20 credit earned under AS 43.55.023(b) before the effective date of secs. 11 and 18 of this Act,                           
21 under AS 43.55.023(d) and 43.55.028(a), as those subsections read on the day before the                                 
22 effective date of secs. 11 and 18 of this Act.                                                                          
23 (b)  AS 43.55.165(a)(3) and 43.55.165(m) and (n), added by secs. 25 and 26 of this                                      
24 Act, apply to a lease expenditure incurred on or after the effective date of secs. 25 and 26 of                         
25 this Act.                                                                                                               
26    * Sec. 31. The uncodified law of the State of Alaska is amended by adding a new section to                         
27 read:                                                                                                                   
28 TRANSITION: ASSIGNMENT OF TAX CREDIT CERTIFICATES.                                                                      
29 Notwithstanding the repeal of AS 43.55.029 by sec. 27 of this Act, the Department of                                    
30 Revenue may continue to apply and enforce AS 43.55.029 as that section read the day before                              
31 the effective date of sec. 27 of this Act for a credit applied for before the effective date of sec.                    
01 27 of this Act.                                                                                                         
02    * Sec. 32. The uncodified law of the State of Alaska is amended by adding a new section to                         
03 read:                                                                                                                   
04 TRANSITION: PAYMENT OF TAX; FILING. (a) Notwithstanding AS 43.55.020(a),                                                
05 as amended by sec. 8 of this Act, a person subject to tax under AS 43.55 that is required to                            
06 make one or more installment payments of estimated tax or other payments of tax under                                   
07 AS 43.55.020 for production before the effective date of sec. 8 of this Act shall pay the tax                           
08 under AS 43.55.020, as that section read on the day before the effective date of sec. 8 of this                         
09 Act.                                                                                                                    
10       (b)  The Department of Revenue may continue to apply and enforce AS 43.55.020(a),                                 
11 as that subsection read on the day before the effective date of sec. 8 of this Act, for a tax or                        
12 installment payment for production before the effective date of sec. 8 of this Act.                                     
13    * Sec. 33. The uncodified law of the State of Alaska is amended by adding a new section to                         
14 read:                                                                                                                   
15       RETROACTIVITY. Section 2 of this Act is retroactive to January 1, 2017.                                           
16    * Sec. 34. Sections 1, 2, 28, and 33 of this Act take effect immediately under                                     
17 AS 01.10.070(c).                                                                                                        
18    * Sec. 35. Except as provided in sec. 34 of this Act, this Act takes effect January 1, 2018.