00 SENATE BILL NO. 228 01 "An Act providing for an industrial incentive investment tax credit and including a gas- 02 to-liquids facility as an eligible investment; and providing for a production tax limit on 03 gas used as a raw material for producing liquids or petrochemicals from gas in the 04 state." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 43.20.042(a) is amended to read: 07 (a) Subject to (c) of this section, for purposes of calculating eligible taxes the 08 taxpayer may apply as a credit against eligible taxes the following percentage of the 09 investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue 10 Code) on only the first $1,000,000,000 [$250,000,000] of qualified investment in the 11 state for each taxable year after December 31, 2010 [DECEMBER 31, 1984], for a 12 [GAS PROCESSING PROJECT] gas-to-liquids facility: (1) 100 percent on the first 13 $50,000,000 of qualified investment; (2) 80 percent on qualified investment over 14 $50,000,000 but not exceeding $100,000,000; (3) 70 percent on qualified investment 01 over $100,000,000 but not exceeding $150,000,000; (4) 60 percent on qualified 02 investment over $150,000,000 but not exceeding $200,000,000; and (5) 40 percent on 03 qualified investment over $200,000,000 but not exceeding $1,000,000,000 04 [$250,000,000]. A credit may not be allowed under this subsection for [AN 05 INVESTMENT CREDIT THAT IS ALLOWED AS TO FEDERAL TAXES FOR] 06 leased property [BY REASON OF 26 U.S.C. 168(f)(8) (INTERNAL REVENUE 07 CODE). IN THIS SUBSECTION, "GAS PROCESSING PROJECT" MEANS THE 08 INTEGRATED PLANT, FACILITIES, AND EQUIPMENT, INCLUDING 09 POLLUTION CONTROL EQUIPMENT, USED FOR PREPARATION OF 10 CONSUMER OR TRANSPORTATION GAS, OR FOR CONDITIONING, 11 FRACTIONATION, STORAGE, HANDLING OR PROCESSING OF A PRODUCT, 12 OTHER THAN CRUDE OIL, OF AN OIL OR GAS WELL, INTO LIQUEFIED 13 NATURAL GAS, METHANOL, AMMONIA, UREA, OLEFINS, PROPANES, 14 BUTANES, POLYMERS AND INTERMEDIATE HYDROCARBON PRODUCTS; 15 IT DOES NOT INCLUDE A PIPELINE FROM OIL AND GAS WELLS TO OR 16 FROM A PLANT AND FACILITIES]. 17 * Sec. 2. AS 43.20.042(b) is amended to read: 18 (b) Subject to (c) of this section, for purposes of calculating eligible taxes the 19 taxpayer may apply as a credit against eligible taxes the following percentage of the 20 investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue 21 Code) on only the first $1,000,000,000 [$250,000,000] of qualified investment in the 22 state for each taxable year after December 31, 2010 [DECEMBER 31, 1984], for 23 exploration, drilling of wells, development, or mining of the minerals and other natural 24 deposits listed in 26 U.S.C. 613(b) (Internal Revenue Code) other than sand or gravel 25 unless the mining of sand or gravel is ancillary to a mining development involving a 26 qualified natural deposit other than sand or gravel: (1) 100 percent on the first 27 $50,000,000 of qualified investment; (2) 80 percent on qualified investment over 28 $50,000,000 but not exceeding $100,000,000; (3) 70 percent on qualified investment 29 over $100,000,000 but not exceeding $150,000,000; (4) 60 percent on qualified 30 investment over $150,000,000 but not exceeding $200,000,000; and (5) 40 percent on 31 qualified investment over $200,000,000 but not exceeding $1,000,000,000 01 [$250,000,000]. A credit may not be allowed under this subsection for [ANY 02 INVESTMENT CREDIT THAT IS ALLOWED AS TO FEDERAL TAXES FOR] 03 leased property [BY REASON OF 26 U.S.C. 168(f)(8) (INTERNAL REVENUE 04 CODE)]. [IN THIS SUBSECTION, "MINING" HAS THE MEANING GIVEN IN 26 05 U.S.C. 613(C)(2) (INTERNAL REVENUE CODE).] 06 * Sec. 3. AS 43.20.042(c) is amended to read: 07 (c) A taxpayer may not claim an investment tax credit under (a) or (b) of this 08 section unless the [GAS PROCESSING PROJECT] gas-to-liquids facility or mining 09 project began operation and production after December 31, 2010 [DECEMBER 31, 10 1984]. A [GAS PROCESSING] gas-to-liquids or mining project is considered to have 11 begun operation and production when the first [PRODUCT] liquids from gas or the 12 first minerals are [MINERAL IS] produced that are [IS] ultimately either sold or 13 transferred for further processing or ultimate use. 14 * Sec. 4. AS 43.20.042(f) is amended to read: 15 (f) The investment tax credit per taxable year allowed by (a) and (b) of this 16 section may not exceed 60 percent of the eligible tax liability. Any unused portion of 17 the investment tax credit shall be subject to the carry forward provisions applicable to 18 a business credit in 26 U.S.C. 39, [26 U.S.C. 46(b)(3)] (Internal Revenue Code) 19 except that the unused credit may not be carried forward to tax years beginning after 20 December 31, 2025 [DECEMBER 31, 1999]. 21 * Sec. 5. AS 43.20.042(g) is amended to read: 22 (g) Except as provided in (f) of this section, a tax credit under this section may 23 not be claimed on investments made after December 31, 2020 [DECEMBER 31, 24 1994]. 25 * Sec. 6. AS 43.20.042(h) is repealed and reenacted to read: 26 (h) In this section, 27 (1) "eligible taxes" means the total tax liability of a taxpayer for the 28 annual taxes due under the provisions of this chapter and AS 43.65; 29 (2) "gas-to-liquids facility" means the integrated plant, facilities, and 30 equipment used for producing liquids from natural gas; 31 (3) "mining" has the meaning given in 26 U.S.C. 613(c)(2) (Internal 01 Revenue Code). 02 * Sec. 7. AS 43.55.900(24) is amended to read: 03 (24) "used in the state" means delivered for consumption as fuel in the 04 state, including as fuel consumed to generate electricity or used by a person as raw 05 material for producing liquids or petrochemicals from gas in the state.