00 SENATE BILL NO. 49 01 "An Act relating to the interest rate applicable to certain amounts due for fees, taxes, 02 and payments made and property delivered to the Department of Revenue; relating to 03 the oil and gas production tax rate; relating to monthly installment payments of 04 estimated oil and gas production tax; relating to oil and gas production tax credits for 05 certain expenditures, including qualified capital credits for exploration, development, 06 and production; relating to the limitation on assessment of oil and gas production taxes; 07 relating to the determination of oil and gas production tax values; making conforming 08 amendments; and providing for an effective date." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10  * Section 1. AS 05.15.095(c) is amended to read: 11 (c) A delinquent fee bears interest at the rate set by AS 43.05.225(2) 12 [AS 43.05.225]. 01  * Sec. 2. AS 34.45.470(a) is amended to read: 02 (a) A person who fails to pay or deliver property within the time prescribed by 03 this chapter may be required to pay to the department interest at the annual rate 04 calculated under AS 43.05.225(2) [AS 43.05.225] on the property or the value of it 05 from the date the property should have been paid or delivered. 06  * Sec. 3. AS 43.05.225 is amended to read: 07 Sec. 43.05.225. Interest. Unless otherwise provided, 08 (1) when a tax levied in this title becomes delinquent, it bears interest 09 in a calendar quarter at the rate of three [FIVE] percentage points above the annual 10 rate charged member banks for advances by the 12th Federal Reserve District as of the 11 first day of that calendar quarter, or at the annual rate of 11 percent, whichever is 12 lesser [GREATER], compounded quarterly as of the last day of that quarter; 13 (2) the interest rate is 12 percent a year for 14 (A) delinquent fees payable under AS 05.15.095(c); and 15 (B) [REPEALED. AND 16 (C)] unclaimed property that is not timely paid or delivered, as 17 allowed by AS 34.45.470(a). 18  * Sec. 4. AS 43.20.046(i) is amended to read: 19 (i) The issuance of a refund under this section does not limit the department's 20 ability to later audit or adjust the claim if the department determines, as a result of the 21 audit, that the person that claimed the credit was not entitled to the amount of the 22 credit. The tax liability of the person receiving the credit under this chapter is 23 increased by the amount of the credit that exceeds that to which the person was 24 entitled. If the tax liability is increased under this subsection, the increase bears 25 interest under AS 43.05.225(1) [AS 43.05.225] from the date the refund was issued. 26  * Sec. 5. AS 43.50.570 is amended to read: 27 Sec. 43.50.570. Interest. A licensee who fails to pay an amount due for the 28 purchase of stamps within the time required 29 (1) is considered to have failed to pay the cigarette taxes due under this 30 chapter; and 31 (2) shall pay interest at the rate established under AS 43.05.225(1) 01 [AS 43.05.225] from the date on which the amount became due until the date of 02 payment. 03  * Sec. 6. AS 43.55.011(e) is amended to read: 04 (e) There is levied on the producer of oil or gas a tax for all oil and gas 05 produced each calendar year from each lease or property in the state, less any oil and 06 gas the ownership or right to which is exempt from taxation or constitutes a 07 landowner's royalty interest. Except as otherwise provided under (f), (j), (k), and (o) of 08 this section, for  09 (1) oil and gas produced from a lease or property containing land  10 that, as of December 31, 2010, was or had previously been within a unit or in  11 commercial production, the tax is equal to [THE SUM OF 12 (1)] the annual production tax value of the taxable oil and gas as 13 calculated under AS 43.55.160(a)(1) multiplied by the tax rate calculated [25 14 PERCENT; AND 15 (2) THE SUM, OVER ALL MONTHS OF THE CALENDAR YEAR, 16 OF THE TAX AMOUNTS DETERMINED] under (g)(1) [(g)] of this section;  17 (2) other oil and gas, the tax is equal to the annual production tax  18 value of the taxable oil and gas as calculated under AS 43.55.160(a)(1) multiplied  19 by the tax rate calculated under (g)(2) of this section. 20  * Sec. 7. AS 43.55.011(f) is amended to read: 21 (f) The levy of tax under this section for oil and gas produced north of 68 22 degrees North latitude, other than oil and gas production subject to (i) of this section 23 and gas subject to (o) of this section, may not be less than 24 (1) four percent of the gross value at the point of production when the 25 average price per barrel for Alaska North Slope crude oil for sale on the United States 26 West Coast during the calendar year for which the tax is due is more than $20 [$25]; 27 (2) three percent of the gross value at the point of production when the 28 average price per barrel for Alaska North Slope crude oil for sale on the United States 29 West Coast during the calendar year for which the tax is due is over $17.50 [$20] but 30 not over $20 [$25]; 31 (3) two percent of the gross value at the point of production when the 01 average price per barrel for Alaska North Slope crude oil for sale on the United States 02 West Coast during the calendar year for which the tax is due is over $15 [$17.50] but 03 not over $17.50 [$20]; 04 (4) one percent of the gross value at the point of production when the 05 average price per barrel for Alaska North Slope crude oil for sale on the United States 06 West Coast during the calendar year for which the tax is due is over $12.50 [$15] but 07 not over $15 [$17.50]; or 08 (5) zero percent of the gross value at the point of production when the 09 average price per barrel for Alaska North Slope crude oil for sale on the United States 10 West Coast during the calendar year for which the tax is due is $12.50 [$15] or less. 11  * Sec. 8. AS 43.55.011(g) is repealed and reenacted to read: 12 (g) The tax rate for a calendar year for 13 (1) purposes of (e)(1) of this section is equal to the percentage rate 14 obtained by performing the following calculations: 15 (A) calculating for the calendar year the producer's average 16 annual production tax value under AS 43.55.160(a)(1) per BTU equivalent 17 barrel of the taxable oil and gas subject to (e)(1) of this section; 18 (B) calculating the fraction, if any, of that average annual 19 production tax value per BTU equivalent barrel that falls within each range of 20 incremental production tax value per BTU equivalent barrel in the table set out 21 in (D) of this paragraph; 22 (C) multiplying each of those fractions by the corresponding 23 incremental rate in the table set out in (D) of this paragraph; and 24 (D) adding together the products calculated under (C) of this 25 paragraph; the table of incremental values and incremental rates is as follows: 26 Incremental Production Tax Value per 27 BTU Equivalent Barrel Incremental Rate 28 Not more than $30.00 25.0 percent 29 Above $30.00 and not more than $42.50 27.5 percent 30 Above $42.50 and not more than $55.00 32.5 percent 31 Above $55.00 and not more than $67.50 37.5 percent 01 Above $67.50 and not more than $80.00 42.5 percent 02 Above $80.00 and not more than $92.50 47.5 percent 03 Above $92.50 50.0 percent 04 (2) purposes of (e)(2) of this section is equal to the percentage rate 05 obtained by performing the following calculations: 06 (A) calculating for the calendar year the producer's average 07 annual production tax value under AS 43.55.160(a)(1) per BTU equivalent 08 barrel of the taxable oil and gas not subject to (e)(1) of this section; 09 (B) calculating the fraction, if any, of that average annual 10 production tax value per BTU equivalent barrel that falls within each range of 11 incremental production tax value per BTU equivalent barrel in the table set out 12 in (D) of this paragraph; 13 (C) multiplying each of those fractions by the corresponding 14 incremental rate in the table set out in (D) of this paragraph; and 15 (D) adding together the products calculated under (C) of this 16 paragraph; the table of incremental values and incremental rates is as follows: 17 Incremental Production Tax Value per 18 BTU Equivalent Barrel Incremental Rate 19 Not more than $30.00 15.0 percent 20 Above $30.00 and not more than $42.50 17.5 percent 21 Above $42.50 and not more than $55.00 22.5 percent 22 Above $55.00 and not more than $67.50 27.5 percent 23 Above $67.50 and not more than $80.00 32.5 percent 24 Above $80.00 and not more than $92.50 37.5 percent 25 Above $92.50 40.0 percent 26  * Sec. 9. AS 43.55.020(a) is repealed and reenacted to read: 27 (a) For a calendar year, a producer subject to tax under AS 43.55.011(e) - (i) 28 shall pay the tax as follows: 29 (1) an installment payment of the estimated tax levied by 30 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 31 month of the calendar year on the last day of the following month; except as otherwise 01 provided under (2) of this subsection, the amount of the installment payment is the 02 sum of the following amounts in (A) - (D) of this paragraph, less 1/12 of the tax 03 credits that are allowed by law to be applied against the tax levied by AS 43.55.011(e) 04 for the calendar year, but the amount of the installment payment may not be less than 05 zero: 06 (A) the sum of the monthly production tax values for the month 07 under AS 43.55.160(a)(2) for the categories described in 08 AS 43.55.160(a)(1)(B) and (F), multiplied by the tax rate calculated for the 09 calendar year of production under AS 43.55.011(g)(1); 10 (B) the greater of 11 (i) the sum of the product of the monthly production tax 12 value for the month under AS 43.55.160(a)(2) for the category 13 described in AS 43.55.160(a)(1)(A) multiplied by the tax rate 14 calculated for the calendar year of production under 15 AS 43.55.011(g)(1), and the product of the monthly production tax 16 value for the month under AS 43.55.160(a)(2) for the category 17 described in AS 43.55.160(a)(1)(G) multiplied by the tax rate 18 calculated for the calendar year of production under 19 AS 43.55.011(g)(2); or 20 (ii) zero percent, one percent, two percent, three 21 percent, or four percent, as applicable under AS 43.55.011(f), of the 22 gross value at the point of production of the oil and gas, other than gas 23 subject to AS 43.55.011(o), produced during the month from all leases 24 or properties that include land north of 68 degrees North latitude; for 25 purposes of this sub-subparagraph, the applicable percentage under 26 AS 43.55.011(f) is determined by substituting in AS 43.55.011(f)(1) - 27 (5) the phrase "month for which the installment payment is calculated" 28 in place of the phrase "calendar year for which the tax is due"; 29 (C) for oil produced during the month from each lease or 30 property subject to AS 43.55.011(k), for gas produced during the month from 31 each lease or property subject to AS 43.55.011(j), and for gas subject to 01 AS 43.55.011(o) produced during the month from each lease or property, the 02 monthly production tax value for the month calculated under 03 AS 43.55.160(a)(2) for the categories described in AS 43.55.160(a)(1)(C), (D), 04 or (E), respectively, multiplied by 05 (i) the tax rate calculated for the calendar year of 06 production under AS 43.55.011(g)(1), for a lease or property subject to 07 AS 43.55.011(e)(1); or 08 (ii) the tax rate calculated for the calendar year of 09 production under AS 43.55.011(g)(2), for a lease or property not 10 subject to AS 43.55.011(e)(1); and 11 (D) the sum of the monthly production tax values for the month 12 under AS 43.55.160(a)(2) for the categories described in 13 AS 43.55.160(a)(1)(H) and (I), multiplied by the tax rate calculated for the 14 calendar year of production under AS 43.55.011(g)(2); 15 (2) an amount calculated under (1)(C) of this subsection for oil or gas 16 produced from a particular lease or property may not exceed the product obtained by 17 carrying out the calculation set out in AS 43.55.011(k)(1) or (2), as applicable, for oil, 18 or set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as applicable, for gas, but 19 substituting in AS 43.55.011(k)(1)(A) or (2)(A), as applicable, the amount of taxable 20 oil produced during the month for the amount of taxable oil produced during the 21 calendar year and substituting in AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as 22 applicable, the amount of taxable gas produced during the month for the amount of 23 taxable gas produced during the calendar year; 24 (3) an installment payment of the estimated tax levied by 25 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 26 on the last day of the following month; the amount of the installment payment is the 27 sum of 28 (A) the applicable tax rate for oil provided under 29 AS 43.55.011(i), multiplied by the gross value at the point of production of the 30 oil taxable under AS 43.55.011(i) and produced from the lease or property 31 during the month; and 01 (B) the applicable tax rate for gas provided under 02 AS 43.55.011(i), multiplied by the gross value at the point of production of the 03 gas taxable under AS 43.55.011(i) and produced from the lease or property 04 during the month; 05 (4) any amount of tax levied by AS 43.55.011(e) or (i), net of any 06 credits applied as allowed by law, that exceeds the total of the amounts due as 07 installment payments of estimated tax is due on March 31 of the year following the 08 calendar year of production. 09  * Sec. 10. AS 43.55.020(g) is amended to read: 10 (g) Notwithstanding any contrary provision of AS 43.05.225, an unpaid 11 amount of an installment payment required under (a)(1) - (3) of this section that is not 12 paid when due bears interest (1) at the rate provided for an underpayment under 26 13 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date 14 the installment payment is due until March 31 following the calendar year of 15 production, and (2) as provided for a delinquent tax under AS 43.05.225(1) 16 [AS 43.05.225] after that March 31. Interest accrued under (1) of this subsection that 17 remains unpaid after that March 31 is treated as an addition to tax that bears interest 18 under (2) of this subsection. An unpaid amount of tax due under (a)(4) of this section 19 that is not paid when due bears interest as provided for a delinquent tax under 20 AS 43.05.225(1) [AS 43.05.225]. 21  * Sec. 11. AS 43.55.023(a) is amended to read: 22 (a) A producer or explorer may take a tax credit for a qualified capital 23 expenditure as follows: 24 (1) notwithstanding that a qualified capital expenditure may be a 25 deductible lease expenditure for purposes of calculating the production tax value of oil 26 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under 27 AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or 28 explorer that incurs a qualified capital expenditure may also elect to apply a tax credit 29 against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that 30 expenditure; [HOWEVER, NOT MORE THAN HALF OF THE TAX CREDIT MAY 31 BE APPLIED FOR A SINGLE CALENDAR YEAR;] 01 (2) a producer or explorer may take a credit for a qualified capital 02 expenditure incurred in connection with geological or geophysical exploration or in 03 connection with an exploration well only if the producer or explorer 04 (A) agrees, in writing, to the applicable provisions of 05 AS 43.55.025(f)(2); 06 (B) submits to the Department of Natural Resources all data 07 that would be required to be submitted under AS 43.55.025(f)(2). 08  * Sec. 12. AS 43.55.023(d) is amended to read: 09 (d) Except as limited by (i) of this section, a person that is entitled to take a tax 10 credit under this section that wishes to transfer the unused credit to another person or 11 obtain a cash payment under AS 43.55.028 may apply to the department for a 12 transferable tax credit certificate [CERTIFICATES]. An application under this 13 subsection must be in a form prescribed by the department and must include 14 supporting information and documentation that the department reasonably requires. 15 The department shall grant or deny an application, or grant an application as to a lesser 16 amount than that claimed and deny it as to the excess, not later than 120 days after the 17 latest of (1) March 31 of the year following the calendar year in which the qualified 18 capital expenditure, well lease expenditure, or carried-forward annual loss for which 19 the credit is claimed was incurred; (2) the date the statement required under 20 AS 43.55.030(a) or (e) was filed for the calendar year in which the qualified capital 21 expenditure, well lease expenditure, or carried-forward annual loss for which the 22 credit is claimed was incurred; or (3) the date the application was received by the 23 department. If, based on the information then available to it, the department is 24 reasonably satisfied that the applicant is entitled to a credit, the department shall issue 25 the applicant a [TWO] transferable tax credit certificate for [CERTIFICATES, 26 EACH FOR HALF OF] the amount of the credit. [THE CREDIT SHOWN ON ONE 27 OF THE TWO CERTIFICATES IS AVAILABLE FOR IMMEDIATE USE. THE 28 CREDIT SHOWN ON THE SECOND OF THE TWO CERTIFICATES MAY NOT 29 BE APPLIED AGAINST A TAX FOR A CALENDAR YEAR EARLIER THAN 30 THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH 31 THE CERTIFICATE IS ISSUED, AND THE CERTIFICATE MUST CONTAIN A 01 CONSPICUOUS STATEMENT TO THAT EFFECT.] A certificate issued under this 02 subsection does not expire. 03  * Sec. 13. AS 43.55.023(g) is amended to read: 04 (g) The issuance of a transferable tax credit certificate under (d) or (m) of this 05 section or the purchase of a certificate under AS 43.55.028 does not limit the 06 department's ability to later audit a tax credit claim to which the certificate relates or to 07 adjust the claim if the department determines, as a result of the audit, that the applicant 08 was not entitled to the amount of the credit for which the certificate was issued. The 09 tax liability of the applicant under AS 43.55.011(e) and 43.55.017 - 43.55.180 is 10 increased by the amount of the credit that exceeds that to which the applicant was 11 entitled, or the applicant's available valid outstanding credits applicable against the tax 12 levied by AS 43.55.011(e) are reduced by that amount. If the applicant's tax liability is 13 increased under this subsection, the increase bears interest under AS 43.05.225(1)  14 [AS 43.05.225] from the date the transferable tax credit certificate was issued. For 15 purposes of this subsection, an applicant that is an explorer is considered a producer 16 subject to the tax levied by AS 43.55.011(e). 17  * Sec. 14. AS 43.55.023(g) is amended to read: 18 (g) The issuance of a transferable tax credit certificate under (d) or former 19 (m) of this section or the purchase of a certificate under AS 43.55.028 does not limit 20 the department's ability to later audit a tax credit claim to which the certificate relates 21 or to adjust the claim if the department determines, as a result of the audit, that the 22 applicant was not entitled to the amount of the credit for which the certificate was 23 issued. The tax liability of the applicant under AS 43.55.011(e) and 43.55.017 - 24 43.55.180 is increased by the amount of the credit that exceeds that to which the 25 applicant was entitled, or the applicant's available valid outstanding credits applicable 26 against the tax levied by AS 43.55.011(e) are reduced by that amount. If the 27 applicant's tax liability is increased under this subsection, the increase bears interest 28 under AS 43.05.225(1) from the date the transferable tax credit certificate was issued. 29 For purposes of this subsection, an applicant that is an explorer is considered a 30 producer subject to the tax levied by AS 43.55.011(e). 31  * Sec. 15. AS 43.55.023(l) is amended to read: 01 (l) A producer or explorer may apply for a tax credit for a well lease 02 expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH 03 LATITUDE] after December 31, 2011 [JUNE 30, 2010], as follows: 04 (1) notwithstanding that a well lease expenditure [INCURRED IN 05 THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] may be a deductible 06 lease expenditure for purposes of calculating the production tax value of oil and gas 07 under AS 43.55.160(a), unless a credit for that expenditure is taken under (a) of this 08 section, AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer 09 or explorer that incurs a well lease expenditure [IN THE STATE SOUTH OF 68 10 DEGREES NORTH LATITUDE] may elect to apply a tax credit against a tax levied 11 by AS 43.55.011(e) in the amount of 40 percent of that expenditure; [A TAX CREDIT 12 UNDER THIS PARAGRAPH MAY BE APPLIED FOR A SINGLE CALENDAR 13 YEAR;] 14 (2) a producer or explorer may take a credit for a well lease 15 expenditure incurred [IN THE STATE SOUTH OF 68 DEGREES NORTH 16 LATITUDE] in connection with geological or geophysical exploration or in 17 connection with an exploration well only if the producer or explorer 18 (A) agrees, in writing, to the applicable provisions of 19 AS 43.55.025(f)(2); and 20 (B) submits to the Department of Natural Resources all data 21 that would be required to be submitted under AS 43.55.025(f)(2). 22  * Sec. 16. AS 43.55.023(n) is amended to read: 23 (n) For the purposes of (l) [AND (m)] of this section, a well lease expenditure 24 [INCURRED IN THE STATE SOUTH OF 68 DEGREES NORTH LATITUDE] is a 25 lease expenditure that is 26 (1) directly related to an exploration well, a stratigraphic test well, a 27 producing well, or an injection well other than a disposal well, [LOCATED IN THE 28 STATE SOUTH OF 68 DEGREES NORTH LATITUDE,] if the expenditure is a 29 qualified capital expenditure and an intangible drilling and development cost 30 authorized under 26 U.S.C. (Internal Revenue Code), as amended, and 26 C.F.R. 31 1.612-4, regardless of the elections made under 26 U.S.C. 263(c); in this paragraph, an 01 expenditure directly related to a well includes an expenditure for well sidetracking, 02 well deepening, well completion or recompletion, or well workover, regardless of 03 whether the well is or has been a producing well; or 04 (2) an expense for seismic work conducted within the boundaries of a 05 production or exploration unit. 06  * Sec. 17. AS 43.55.028(e) is amended to read: 07 (e) The department, on the written application of a person to whom a 08 transferable tax credit certificate has been issued under AS 43.55.023(d) or former 09 (m) or to whom a production tax credit certificate has been issued under 10 AS 43.55.025(f), may use available money in the oil and gas tax credit fund to 11 purchase, in whole or in part, the certificate if the department finds that 12 (1) the calendar year of the purchase is not earlier than the first 13 calendar year for which the credit shown on the certificate would otherwise be allowed 14 to be applied against a tax; 15 (2) [REPEALED. 16 (3) REPEALED. 17 (4)] the applicant does not have an outstanding liability to the state for 18 unpaid delinquent taxes under this title; 19 (3) [(5)] the applicant's total tax liability under AS 43.55.011(e), after 20 application of all available tax credits, for the calendar year in which the application is 21 made is zero; 22 (4) [(6)] the applicant's average daily production of oil and gas taxable 23 under AS 43.55.011(e) during the calendar year preceding the calendar year in which 24 the application is made was not more than 50,000 BTU equivalent barrels; and 25 (5) [(7)] the purchase is consistent with this section and regulations 26 adopted under this section. 27  * Sec. 18. AS 43.55.028(g) is amended to read: 28 (g) The department may adopt regulations to carry out the purposes of this 29 section, including standards and procedures to allocate available money among 30 applications for purchases under this chapter and claims for refunds under 31 AS 43.20.046 when the total amount of the applications for purchase and claims for 01 refund exceed the amount of available money in the fund. The regulations adopted by 02 the department may not, when allocating available money in the fund under this 03 section, distinguish an application for the purchase of a credit certificate issued under 04 former AS 43.55.023(m) or a claim for refund under AS 43.20.046. 05  * Sec. 19. AS 43.55.075(a) is amended to read: 06 (a) Except as provided in AS 43.05.260(c), the amount of a tax imposed by 07 this chapter must be assessed within four [SIX] years after the return was filed. 08  * Sec. 20. AS 43.55.160(a) is repealed and reenacted to read: 09 (a) Except as provided in (b) of this section, for the purposes of 10 (1) AS 43.55.011(e), the annual production tax value of taxable oil, 11 gas, or oil and gas produced by a producer during a calendar year, in a given category 12 for which a separate production tax value is required to be calculated under this 13 paragraph, is equal to the gross value at the point of production of that oil, gas, or oil 14 and gas, respectively, taxable under AS 43.55.011(e), less the producer's lease 15 expenditures under AS 43.55.165 for the calendar year that are applicable to the oil, 16 gas, or oil and gas, respectively, in that category produced by the producer during the 17 calendar year, as adjusted under AS 43.55.170; a separate annual production tax value 18 must be calculated for 19 (A) oil and gas, other than gas produced before 2022 and used 20 in the state, produced in aggregate from all leases or properties in the state that 21 include land north of 68 degrees North latitude and are subject to 22 AS 43.55.011(e)(1); 23 (B) oil and gas, other than gas produced before 2022 and used 24 in the state, produced in aggregate from all leases or properties in the state that 25 are subject to AS 43.55.011(e)(1) and are described in AS 43.55.024(a), during 26 a calendar year before or during the last calendar year under AS 43.55.024(b) 27 for which the producer could take a tax credit under AS 43.55.024(a); 28 (C) oil produced before 2022 from each lease or property in the 29 Cook Inlet sedimentary basin; 30 (D) gas produced before 2022 from each lease or property in 31 the Cook Inlet sedimentary basin; 01 (E) gas produced before 2022 from each lease or property in 02 the state outside the Cook Inlet sedimentary basin and used in the state; 03 (F) oil and gas produced in aggregate from all leases or 04 properties in the state that do not include land north of 68 degrees North 05 latitude and are subject to AS 43.55.011(e)(1); this subparagraph does not 06 apply to 07 (i) gas that is produced before 2022 and used in the 08 state; 09 (ii) oil or gas that is produced before 2022 from a lease 10 or property in the Cook Inlet sedimentary basin; 11 (iii) oil or gas that is produced from a lease or property 12 described in AS 43.55.024(a) during a calendar year before or during 13 the last calendar year under AS 43.55.024(b) for which the producer 14 could take a tax credit under AS 43.55.024(a); 15 (G) oil and gas, other than gas produced before 2022 and used 16 in the state, produced in aggregate from all leases or properties in the state that 17 include land north of 68 degrees North latitude and are not subject to 18 AS 43.55.011(e)(1); 19 (H) oil and gas, other than gas produced before 2022 and used 20 in the state, produced in aggregate from all leases or properties in the state that 21 are not subject to AS 43.55.011(e)(1) and are described in AS 43.55.024(a), 22 during a calendar year before or during the last calendar year under 23 AS 43.55.024(b) for which the producer could take a tax credit under 24 AS 43.55.024(a); 25 (I) oil and gas produced in aggregate from all leases or 26 properties in the state that do not include land north of 68 degrees North 27 latitude and are not subject to AS 43.55.011(e)(1); this subparagraph does not 28 apply to 29 (i) gas that is produced before 2022 and used in the 30 state; 31 (ii) oil or gas that is produced before 2022 from a lease 01 or property in the Cook Inlet sedimentary basin; 02 (iii) oil or gas that is produced from a lease or property 03 described in AS 43.55.024(a) during a calendar year before or during 04 the last calendar year under AS 43.55.024(b) for which the producer 05 could take a tax credit under AS 43.55.024(a); 06 (2) AS 43.55.020(a), the monthly production tax value of taxable oil, 07 gas, or oil and gas produced by a producer during a month, in a given category for 08 which a separate production tax value is required to be calculated under this 09 paragraph, is equal to the gross value at the point of production of that oil, gas, or oil 10 and gas, respectively, taxable under AS 43.55.011(e), less 1/12 of the producer's lease 11 expenditures under AS 43.55.165 for the calendar year that are applicable to the oil, 12 gas, or oil and gas, respectively, in that category produced by the producer during the 13 calendar year, as adjusted under AS 43.55.170; a separate monthly production tax 14 value must be calculated for each of the categories for which a separate annual 15 production tax value is required to be calculated under (1) of this subsection. 16  * Sec. 21. AS 43.56.160 is amended to read: 17 Sec. 43.56.160. Interest and penalty. When the tax levied by AS 43.56.010(a) 18 becomes delinquent, a penalty of 10 percent shall be added. Interest on the delinquent 19 taxes, exclusive of penalty, shall be assessed at the rate specified in AS 43.05.225(1)  20 [A RATE OF EIGHT PERCENT A YEAR]. 21  * Sec. 22. AS 43.77.020(d) is amended to read: 22 (d) A person subject to the tax under this chapter shall make quarterly 23 payments of the tax estimated to be due for the year, as required under regulations 24 adopted by the department. A taxpayer will be subject to an estimated tax penalty, 25 determined by applying the interest rate specified in AS 43.05.225(1) [AS 43.05.225] 26 to the underpayment for each quarter, unless the taxpayer makes estimated tax 27 payments in equal installments that total either 28 (1) at least 90 percent of the taxpayer's tax liability under this chapter 29 for the tax year; or 30 (2) at least 100 percent of the taxpayer's tax liability under this chapter 31 for the prior tax year. 01  * Sec. 23. AS 43.90.430 is amended to read: 02 Sec. 43.90.430. Interest. When a payment due to the state under this chapter 03 becomes delinquent, the payment bears interest at the rate applicable to a delinquent 04 tax under AS 43.05.225(1) [AS 43.05.225]. 05  * Sec. 24. AS 43.55.023(m) is repealed. 06 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 APPLICABILITY. (a) Sections 11, 12, 15, and 16 of this Act apply to expenditures 09 incurred after December 31, 2011. 10 (b) Sections 6 - 9 and 20 of this Act apply to oil and gas produced after December 31, 11 2012. 12 (c) Section 19 of this Act applies to any tax liability for the production of oil and gas 13 after December 31, 2013. 14 * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 TRANSITION: REGULATIONS. The Department of Revenue may proceed to adopt 17 regulations to implement this Act. The regulations take effect under AS 44.62 (Administrative 18 Procedure Act), but not before the effective date of the provision of this Act implemented by 19 the regulation. 20  * Sec. 27. Sections 11, 12, 14 - 18, 24, and 25(a) of this Act take effect January 1, 2012. 21  * Sec. 28. Sections 6 - 9, 20, and 25(b) of this Act take effect January 1, 2013. 22  * Sec. 29. Sections 19 and 25(c) of this Act take effect January 1, 2014. 23 * Sec. 30. Except as provided in secs. 27 - 29 of this Act, this Act takes effect July 1, 2011.