00 SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 51 01 "An Act relating to oil and gas; relating to the oil and gas corporate income tax; relating 02 to the oil and gas production tax; relating to tax credits; allowing the Alaska Industrial 03 Development and Export Authority to issue bonds for an oil processing facility; making 04 conforming amendments; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06  * Section 1. AS 29.60.599(1) is amended to read: 07 (1) "barrel," when used with reference to oil, means the quantity of  08 oil contained in 42 United States gallons of 231 cubic inches each, measured at a  09 temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds a  10 square inch [HAS THE MEANING GIVEN IN AS 43.20.144]; 11  * Sec. 2. AS 41.09.010(b) is amended to read: 12 (b) An exploration incentive credit extended under (a) of this section may be 13 applied against 14 (1) a payment or obligation against which a credit authorized by 01 AS 38.05.180(i) may be claimed; 02 (2) taxes payable under AS 43.20 or AS 43.21, as applicable; and 03 (3) oil and gas bonus payments due the state under AS 38.05.180(f). 04  * Sec. 3. AS 43.20.011(e) is amended to read: 05 (e) For each corporation not engaged in the production or transportation  06 of crude oil or natural gas within the state, there [THERE] is imposed for each 07 taxable year upon the entire taxable income of the [EVERY] corporation derived from 08 sources within the state a tax computed as follows: 09 If the taxable income is: Then the tax is: 10 Less than $10,000 1 percent of the taxable income 11 $10,000 but less than $20,000 $100 plus 2 percent of the taxable 12 income over $10,000 13 $20,000 but less than $30,000 $300 plus 3 percent of the taxable 14 income over $20,000 15 $30,000 but less than $40,000 $600 plus 4 percent of the taxable 16 income over $30,000 17 $40,000 but less than $50,000 $1,000 plus 5 percent of the taxable 18 income over $40,000 19 $50,000 but less than $60,000 $1,500 plus 6 percent of the taxable 20 income over $50,000 21 $60,000 but less than $70,000 $2,100 plus 7 percent of the taxable 22 income over $60,000 23 $70,000 but less than $80,000 $2,800 plus 8 percent of the taxable 24 income over $70,000 25 $80,000 but less than $90,000 $3,600 plus 9 percent of the taxable 26 income over $80,000 27 $90,000 or more $4,500 plus 9.4 percent of the taxable 28 income over $90,000. 29  * Sec. 4. AS 43.20.011 is amended by adding a new subsection to read: 30 (g) There is imposed for each taxable year upon the entire taxable income of 31 every corporation engaged in the production or transportation of crude oil or natural 01 gas within the state a tax of 6.2 percent of taxable income. The taxable income of a 02 corporation engaged in the production or transportation of crude oil or natural gas 03 within the state shall be determined in accordance with AS 43.21. 04  * Sec. 5. AS 43.20.145(f) is amended to read: 05 (f) This section does not apply to taxpayers subject to AS 43.21 06 [AS 43.20.144 ENGAGED IN 07 (1) THE PRODUCTION OF OIL OR GAS FROM A LEASE OR 08 PROPERTY IN THE STATE; OR 09 (2) THE TRANSPORTATION OF OIL OR GAS BY REGULATED 10 PIPELINE IN THE STATE]. 11  * Sec. 6. AS 43.21 is amended by adding new sections to read: 12 Article 1. Determination of Taxable Income.  13 Sec. 43.21.200. Application. This chapter applies to every corporation doing 14 business in the state that derives income from the production of oil or gas from a lease 15 or property in the state or from the pipeline transportation of oil or gas in the state. The 16 tax calculated under this chapter is measured by the total taxable income of the 17 corporation during the tax period as defined by AS 43.21.210 - 43.21.250 and is 18 calculated at the rates established under AS 43.20.011(g). 19 Sec. 43.21.210. Internal Revenue Code adopted by reference. (a) 26 U.S.C. 20 1 - 1399 and 6001 - 7872 (Internal Revenue Code), as amended, are adopted by 21 reference as a part of this chapter. These portions of the Internal Revenue Code have 22 full force and effect under this chapter unless excepted to or modified by other 23 provisions of this chapter. 24 (b) When portions of the Internal Revenue Code incorporated by reference as 25 provided in (a) of this section refer to regulations adopted by the United States 26 Commissioner of Internal Revenue, or hereafter adopted, those portions shall be 27 regarded as regulations adopted by the department under and in accord with the 28 provisions of this chapter, unless and until the department adopts specific regulations 29 in place of those portions conformable with this chapter. 30 Sec. 43.21.220. Determination of taxable income from oil and gas  31 production. (a) The taxable income of a corporation from the production of oil and 01 gas from a lease or property in the state is the corporation's net income as calculated in 02 accordance with this section. 03 (b) Gross income of a corporation from oil and gas production is the sum of 04 the gross value at the point of production of oil or gas produced from a lease or 05 property in the state, any gain or loss resulting from the sale of a lease, and any gain or 06 loss resulting from the sale of property used in the production of oil and gas in the 07 state. The department shall by regulation determine a uniform method of establishing 08 the gross value at the point of production. For the purpose of determining the gross 09 value at the point of production under this subsection, the department shall use 10 AS 43.55.150 for the determination of transportation costs. 11 (c) Net income from oil and gas production shall be determined by deducting 12 from gross income the following: 13 (1) royalties paid in kind or in value; 14 (2) taxes imposed under AS 43.55 that are actually paid or incurred by 15 the corporation on the production from a lease or property in the state; 16 (3) taxes imposed under AS 29.45.080 - 29.45.090 and AS 43.56 that 17 are actually paid or incurred by the corporation on property used directly in the 18 production of oil or gas from a lease or property in the state, including property used 19 in production, gathering, treatment, or preparation of the oil or gas for pipeline 20 transportation, but only if those property tax payments were due and payable only 21 after the date of commercial production from the lease or property with which the 22 property was associated; 23 (4) the direct costs incurred by or for the corporation in operating the 24 lease or property, including the direct costs of producing, gathering, treating, or 25 preparing the oil or gas for pipeline transportation, but net of any payments received 26 for those activities and not including any indirect cost or overhead expense; 27 (5) depreciation, under 26 U.S.C. 167 (Internal Revenue Code) or 28 another reasonable method as the department may by regulation establish, on property 29 used directly in the production, gathering, treatment, or preparation of the oil or gas 30 for pipeline transportation, including amortization of capitalized interest for 31 investments in that property at a rate not to exceed the average cost to the taxpayer of 01 borrowed capital during the year in which the interest is capitalized; for purposes of 02 this paragraph, property capitalized under AS 43.20 shall maintain its adjusted basis, 03 less any depreciation taken under AS 43.20 and any amount attributable to that 04 property received as a credit under this title; 05 (6) the amortization of lease acquisition payments and taxes paid or 06 incurred under AS 29.45.080, 29.45.090, or AS 43.56, including capitalized interest, 07 for or on producing properties before the commencement of commercial production 08 from the lease or property for which the property is being used; 09 (7) interest expense of the corporation, not capitalized during 10 construction, that was paid or incurred in connection with property in the state; 11 however, the interest expense may not exceed that portion of the total interest paid by 12 the consolidated business of which the corporation is a part, determined by 13 multiplying the total interest by a fraction, the numerator of which is the value of the 14 corporation's real and tangible personal property used directly in the production of oil 15 or gas from a lease or property in the state and the denominator of which is the value 16 of all real and tangible personal property of the consolidated business; in this 17 paragraph, "total interest paid by the consolidated business" does not include interest 18 expense arising from intercompany obligations within the consolidated business 19 except to the extent that the interest expense reflects a pass-through of interest on a 20 third-party borrowing by the parent or other member of the consolidated business with 21 the purpose, expressed at the time of the third-party borrowing, of financing Alaska 22 business activity of the taxpayer corporation; 23 (8) expenses incurred by the corporation after December 31, 2013, of 24 unsuccessful exploration of oil or gas in the state, including the acquisition costs of 25 abandoned properties, dry hole costs, and the costs of geologic and geophysical 26 exploration related to those abandoned properties; 27 (9) general overhead or administrative expense incurred by the 28 corporation attributable to deriving income from the production of oil or gas from a 29 lease or property in the state to the extent that the general overhead or administrative 30 expense does not exceed that portion of the total general overhead or administrative 31 expense incurred by the consolidated business of which the corporation is a part, 01 determined by multiplying the total general overhead or administrative expense by a 02 fraction, the numerator of which is the value of the corporation's real and tangible 03 personal property used directly in the production of oil or gas from a lease or property 04 in the state and the denominator of which is the value of all real and tangible personal 05 property of the consolidated business; 06 (10) the amount of income from the production of oil and gas from a 07 lease or property that is divided among the regional Native corporations under 43 08 U.S.C. 1606(i) (sec. 7(i), Alaska Native Claims Settlement Act, P.L. 92-203); 09 (11) net operating loss carry forward amounts accrued from taxes paid 10 under AS 43.20 or this chapter for expenditures related to the production of oil or gas 11 from a lease or property in the state or from pipeline transportation of oil or gas in the 12 state, except that a net operating loss amount that resulted from an expenditure that 13 was also the basis of a credit under this title may not be deducted under this paragraph. 14 (d) Deductions from gross income under this section may not include 15 expenses previously deducted on a return filed under AS 43.20. 16 (e) If a corporation subject to this chapter shares the production or proceeds of 17 the production from a lease or property through a working interest, royalty interest, 18 overriding royalty interest, production payment, net profit interest, joint venture, or 19 other agreement, the taxpayer shall allocate the deductions from gross income between 20 the corporation and the persons with whom the corporation has the agreement in 21 accordance with the terms of the agreement. 22 Sec. 43.21.230. Determination of income from oil and gas pipeline  23 transportation. (a) Except as provided in (c) of this section, taxable income 24 attributable to the transportation of oil in a pipeline engaged in interstate commerce in 25 this state is the amount reported or that would be required to be reported to the Federal 26 Energy Regulatory Commission or its successors as net operating income, except that 27 the taxable income shall also include taxes based on or measured by net income, less 28 those portions of interest and general overhead or administrative expense attributable 29 to the pipeline transportation of oil in the state. The department shall establish 30 regulations governing the determination of interest and general overhead or 31 administrative expense directly attributable to pipeline transportation of oil in the 01 state. 02 (b) Except as provided in (c) of this section, taxable income attributable to the 03 transportation of natural gas in a pipeline engaged in interstate commerce in this state 04 is the amount reported or that would be required to be reported to the Federal Energy 05 Regulatory Commission or its successors as net operating income, except that the 06 taxable income shall also include taxes based on or measured by net income, less that 07 portion of interest and general overhead or administrative expense attributable to 08 pipeline transportation in the state. The department shall establish regulations 09 governing the determination of interest and general overhead or administrative 10 expense directly attributable to pipeline transportation of natural gas in the state. 11 (c) Taxable income attributable to the transportation of oil or natural gas in 12 this state of a corporation not under the jurisdiction of the Federal Energy Regulatory 13 Commission, or of a corporation under the jurisdiction of the Federal Energy 14 Regulatory Commission but not reporting the operation of pipelines in the state 15 separately from the operation of pipelines elsewhere, shall be based on an amount 16 equal to the amount that would have been reported to the Federal Energy Regulatory 17 Commission under (a) of this section in the case of oil pipelines, or under (b) of this 18 section, in the case of natural gas pipelines, had the corporation been, in fact, under the 19 jurisdiction of the Federal Energy Regulatory Commission for the taxable year and 20 required to report on the operation of pipelines in the state separately from the 21 operation of pipelines elsewhere, except that the taxable income shall also include 22 taxes based on or measured by net income. 23 Sec. 43.21.240. Determination of income from activities other than oil and  24 gas production or pipeline transportation. (a) Taxable income of a corporation 25 subject to this chapter from activities in this state other than the production of oil or 26 gas from a lease or property in the state or the pipeline transportation of oil or gas in 27 the state shall be determined in accordance with the method established in art. IV of 28 AS 43.19.010 and in AS 43.20.143, as modified by (b) - (d) of this section. 29 (b) The total taxable income of a consolidated business is its entire income 30 less the portion of that entire income attributable to worldwide production and pipeline 31 transportation of oil and gas. In this subsection, for a member of a consolidated 01 business who is 02 (1) required to file under the Internal Revenue Code, "entire income" 03 means the taxpayer's taxable income as the term is used in AS 43.20.011 - 43.20.142; 04 (2) not required to file under the Internal Revenue Code, "entire 05 income" means an income determination prepared in accordance with generally 06 accepted accounting principles, except that a taxpayer may elect to report income as 07 the income would be determined under (1) of this subsection. 08 (c) The numerator and denominator of the property factor, of the payroll 09 factor, and of the sales factor shall be calculated without reference to that portion of 10 property, payroll, or sales directly related to the production of oil or gas from a lease 11 of property in the state or the pipeline transportation of oil or gas in the state. 12 (d) The value attributed to vessels transporting Alaska oil or gas of a 13 consolidated business that are not owned or effectively owned by the consolidated 14 business shall be excluded from the property factor. 15 Sec. 43.21.250. Applicability of tax to a consolidated business. The 16 provisions of this chapter apply to a consolidated business whether or not the taxpayer 17 is the parent or controlling corporation. 18 Article 2. Calculation of Tax; Returns. 19 Sec. 43.21.300. Calculation of tax. (a) The amount of the tax payable on the 20 taxable income of a corporation subject to tax under this chapter shall be determined 21 using the tax rates in AS 43.20.011(g). 22 (b) For purposes of this chapter, the department may combine taxable income 23 of corporations subject to tax under this chapter who are part of the same consolidated 24 business. 25 (c) If the methods of allocation and apportionment provided in this chapter do 26 not fairly represent the extent of a corporation's business activity in the state, the 27 corporation may petition for or the department may require, in respect to all or any 28 part of the corporation's business activity, if reasonable, the employment of any 29 method authorized under art. IV, sec. 18, AS 43.19.010 (Multistate Tax Compact), to 30 carry out an equitable allocation and apportionment of the corporation's income. The 31 commissioner shall include in the annual report required in AS 43.21.410 a report on 01 all relief granted under this subsection, including, for each case, a statement of the 02 changes in tax liability resulting from the granting of relief, the tax years involved, and 03 a description of the method of determining taxable income that was substituted for the 04 methods provided in this chapter. 05 Sec. 43.21.320. Credits. A credit under AS 43.20.043, 43.20.044, or 43.20.046 06 may be applied against the tax levied under this chapter, unless a credit for the same 07 expenditure has been taken against a tax levied under AS 43.20 or AS 43.55. 08 Sec. 43.21.330. Returns and payment of taxes. (a) A corporation subject to 09 tax under this chapter and required to make a return under the Internal Revenue Code 10 shall, within 30 days after the federal return is required to be filed, submit a return 11 setting out 12 (1) the amount of tax due under this chapter, less credits claimed 13 against the tax; and 14 (2) other information the department may require to carry out the 15 purposes of this chapter. 16 (b) The return shall be made under oath or shall contain a written declaration 17 that it is made under penalty of perjury and shall be made on a form prescribed by the 18 department. 19 (c) On request by the department, a taxpayer shall furnish to the department a 20 true and correct copy of each annual tax return the taxpayer has filed with the United 21 States Internal Revenue Service. Every taxpayer shall notify the department in writing 22 of any modification of the taxpayer's federal income tax return and of a recomputation 23 of tax or determination of deficiency. A full statement of the facts must accompany 24 this notice. The notice shall be filed within 60 days after the final determination of the 25 modification, recomputation, or deficiency, and the taxpayer shall pay the additional 26 tax or penalty under this chapter. For purposes of this section, a determination shall be 27 considered to be final at the time an amended federal return is filed or a notice of 28 deficiency or an assessment is mailed to the taxpayer by the Internal Revenue Service, 29 except that in no event shall a determination be considered final for purposes of this 30 section until the taxpayer has exhausted the taxpayer's rights of appeal under federal 31 law. 01 (d) The total amount of tax imposed by this chapter is due and payable to the 02 department at the same time and in the same manner as the tax payable to the United 03 States Internal Revenue Service, including quarterly estimated tax prepayments, 04 except that a taxpayer with an estimated tax liability of less than $1,000,000 for the 05 year is not required to make quarterly prepayments of the estimated tax. 06 (e) A tax due under this section is payable even if the assessment is under 07 appeal or the validity, enforceability, or application of this chapter or any provision of 08 this chapter is challenged before the department or in the courts. 09 (f) An unpaid amount of an installment payment required under (d) of this 10 section that is not paid when due shall be treated as an underpayment under 26 U.S.C. 11 6655 (Internal Revenue Code) and shall accrue interest at a rate appropriate for the 12 state prescribed in regulation. 13 Article 3. Administrative Matters. 14 Sec. 43.21.400. Regulations. The department shall adopt regulations in 15 accordance with AS 44.62 (Administrative Procedure Act) to implement this chapter. 16 In the adoption of regulations under this section, the department shall use the 1981 17 regulations adopted under former provisions of this chapter as guidance. Regulations 18 adopted under this section must include methods for accounting for 19 (1) intercompany transactions in a fair and equitable manner and to 20 prevent purposeful tax evasion or manipulation of income or deductions, including 21 transactions for costs incurred by a party outside of the state that are related to oil or 22 gas production from a lease or property in the state or to pipeline transportation of oil 23 or gas in the state; and 24 (2) transactions between parent and subsidiary companies. 25 Sec. 43.21.410. Public reporting. (a) The commissioner shall compile and 26 transmit to the legislature an annual report of state revenue and the implementation of 27 taxation policies under this chapter. The report must include total aggregate income 28 tax paid by corporations subject to this chapter and aggregate income and deductions 29 by category, classified so as to prevent the identification of particular returns or 30 reports. 31 (b) The legislative auditor shall notify the legislature on or before the first day 01 of each regular session that the annual report reviewing the actions of the department 02 in administering this chapter is available. 03 Sec. 43.21.420. Information disclosure. Notwithstanding AS 43.05.320, the 04 department shall disclose to a legislator, on request, information collected from a 05 taxpayer to the extent that 06 (1) the taxpayer is a publicly traded company; 07 (2) the information has been filed in a quarterly, annual, or other 08 periodic report to the United States Securities Exchange Commission; and 09 (3) the information has been made public by the United States 10 Securities Exchange Commission. 11 Sec. 43.21.499. Definitions. Unless the context requires otherwise, the 12 definitions contained in AS 43.55.900 are applicable to this chapter. In addition, in this 13 chapter, 14 (1) "consolidated business" means a corporation or group of 15 corporations having more than 50 percent common ownership, direct or indirect, or a 16 group of corporations in which there is common control, either direct or indirect, as 17 evidenced by an arrangement, contract, or agreement; 18 (2) "Internal Revenue Code" has the meaning given in AS 43.20.340. 19  * Sec. 7. AS 43.55.011(g) is amended to read: 20 (g) For each month of the calendar year for which the producer's average 21 monthly production tax value under AS 43.55.160(a)(2) of a [PER] BTU equivalent 22 barrel of the taxable oil and gas is more than $30, the amount of tax for purposes of 23 (e)(2) of this section is determined by multiplying the monthly production tax value of 24 the taxable oil and gas produced during the month by a tax rate equal to [THE TAX 25 RATE CALCULATED AS FOLLOWS: 26 (1) IF THE PRODUCER'S AVERAGE MONTHLY PRODUCTION 27 TAX VALUE PER BTU EQUIVALENT BARREL OF THE TAXABLE OIL AND 28 GAS FOR THE MONTH IS NOT MORE THAN $92.50, THE TAX RATE IS] 0.4 29 percent multiplied by the number that represents the difference between that average 30 monthly production tax value of a [PER] BTU equivalent barrel and $30 [; OR 31 (2) IF THE PRODUCER'S AVERAGE MONTHLY PRODUCTION 01 TAX VALUE PER BTU EQUIVALENT BARREL OF THE TAXABLE OIL AND 02 GAS FOR THE MONTH IS MORE THAN $92.50, THE TAX RATE IS THE SUM 03 OF 25 PERCENT AND THE PRODUCT OF 0.1 PERCENT MULTIPLIED BY THE 04 NUMBER THAT REPRESENTS THE DIFFERENCE BETWEEN THE AVERAGE 05 MONTHLY PRODUCTION TAX VALUE PER BTU EQUIVALENT BARREL 06 AND $92.50], except that the tax rate [SUM] determined under this subsection 07 [PARAGRAPH] may not exceed 25 [50] percent. 08  * Sec. 8. AS 43.55.023(a) is amended to read: 09 (a) A producer or explorer may take a tax credit for a qualified capital 10 expenditure as follows: 11 (1) notwithstanding that a qualified capital expenditure may be a 12 deductible lease expenditure for purposes of calculating the production tax value of oil 13 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under 14 AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or 15 explorer that incurs a qualified capital expenditure may also elect to apply a tax credit 16 against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that 17 expenditure; however, not more than half of the tax credit may be applied for a single 18 calendar year unless the commissioner determines that economic conditions are  19 acceptable for the entire tax credit to be applied in a single calendar year; 20 (2) a producer or explorer may take a credit for a qualified capital 21 expenditure incurred in connection with geological or geophysical exploration or in 22 connection with an exploration well only if the producer or explorer 23 (A) agrees, in writing, to the applicable provisions of 24 AS 43.55.025(f)(2); and 25 (B) submits to the Department of Natural Resources all data 26 that would be required to be submitted under AS 43.55.025(f)(2). 27  * Sec. 9. AS 43.55.023(d) is amended to read: 28 (d) Except as limited by (i) of this section, a person that is entitled to take a tax 29 credit under this section that wishes to transfer the unused credit to another person or 30 obtain a cash payment under AS 43.55.028 may apply to the department for 31 transferable tax credit certificates. An application under this subsection must be in a 01 form prescribed by the department and must include supporting information and 02 documentation that the department reasonably requires. The department shall grant or 03 deny an application, or grant an application as to a lesser amount than that claimed and 04 deny it as to the excess, not later than 120 days after the latest of (1) March 31 of the 05 year following the calendar year in which the qualified capital expenditure or carried- 06 forward annual loss for which the credit is claimed was incurred; (2) the date the 07 statement required under AS 43.55.030(a) or (e) was filed for the calendar year in 08 which the qualified capital expenditure or carried-forward annual loss for which the 09 credit is claimed was incurred; or (3) the date the application was received by the 10 department. If, based on the information then available to it, the department is 11 reasonably satisfied that the applicant is entitled to a credit, the department shall issue 12 the applicant two transferable tax credit certificates, each for half of the amount of the 13 credit. The credit shown on one of the two certificates is available for immediate use. 14 The credit shown on the second of the two certificates may not be applied against a tax 15 for a calendar year earlier than the calendar year following the calendar year in which 16 the certificate is issued unless the commissioner determines that economic  17 conditions are acceptable for the entire tax credit to be applied in a single  18 calendar year, and the certificate must contain a conspicuous statement to that effect. 19 A certificate issued under this subsection does not expire. 20  * Sec. 10. AS 43.55.024(b) is amended to read: 21 (b) A producer may not take a tax credit under (a) of this section for any 22 calendar year after the later of 23 (1) 2023 [2016]; or 24 (2) the ninth calendar year after the calendar year during which the 25 producer first has commercial oil or gas production before May 1, 2023 [2016], from 26 at least one lease or property in the state outside the Cook Inlet sedimentary basin, no 27 part of which is north of 68 degrees North latitude, if the producer did not have 28 commercial oil or gas production from a lease or property in the state outside the Cook 29 Inlet sedimentary basin, no part of which is north of 68 degrees North latitude, before 30 April 1, 2006. 31  * Sec. 11. AS 43.55.024(d) is amended to read: 01 (d) A producer may not take a tax credit under (c) of this section for any 02 calendar year after the later of 03 (1) 2023 [2016]; or 04 (2) if the producer did not have commercial oil or gas production from 05 a lease or property in the state before April 1, 2006, the ninth calendar year after the 06 calendar year during which the producer first has commercial oil or gas production 07 before May 1, 2023 [2016], from at least one lease or property in the state. 08  * Sec. 12. AS 43.82.210(a) is amended to read: 09 (a) If the commissioner approves an application and proposed project plan 10 under AS 43.82.140, the commissioner may develop proposed terms for inclusion in a 11 contract under AS 43.82.020 for periodic payment in lieu of one or more of the 12 following taxes that otherwise would be imposed by the state or a municipality on the 13 qualified sponsor or member of a qualified sponsor group as a consequence of 14 participating in an approved qualified project: 15 (1) oil and gas production taxes and oil surcharges under AS 43.55; 16 (2) oil and gas exploration, production, and pipeline transportation 17 property taxes under AS 43.56; 18 (3) oil and gas corporate income tax under AS 43.21; [REPEALED] 19 (4) Alaska net income tax under AS 43.20; 20 (5) municipal sales and use tax under AS 29.45.650 - 29.45.710; 21 (6) municipal property tax under AS 29.45.010 - 29.45.250 or 22 29.45.550 - 29.45.600; 23 (7) municipal special assessments under AS 29.46; 24 (8) a comparable tax or levy imposed by the state or a municipality 25 after June 18, 1998; 26 (9) other state or municipal taxes or categories of taxes identified by 27 the commissioner. 28  * Sec. 13. AS 44.88.140(a) is amended to read: 29 (a) Except as provided in AS 29.45.030(a)(1) and AS 44.88.168, the real and 30 personal property of the authority and its assets, income, and receipts are declared to 31 be the property of a political subdivision of the state and, together with any project or 01 development project financed under AS 44.88.155 - 44.88.159 or 44.88.172 - 02 44.88.177, and a leasehold interest created in a project or development project 03 financed under AS 44.88.155 - 44.88.159 or 44.88.172 - 44.88.177, devoted to an 04 essential public and governmental function and purpose, and the property, assets, 05 income, receipts, project, development project, and leasehold interests shall be exempt 06 from all taxes and special assessments of the state or a political subdivision of the 07 state, including, without limitation, all boroughs, cities, municipalities, school 08 districts, public utility districts, and other taxing units. All bonds of the authority are 09 declared to be issued by a political subdivision of the state and for an essential public 10 and governmental purpose and to be a public instrumentality, and the bonds, and the 11 interest on them, the income from them and the transfer of the bonds, and all assets, 12 income, and receipts pledged to pay or secure the payments of the bonds, or interest on 13 them, shall at all times be exempt from taxation by or under the authority of the state, 14 except for inheritance and estate taxes and taxes on transfers by or in contemplation of 15 death. Nothing in this section affects or limits an exemption from license fees, 16 property taxes, or excise, income, or any other taxes, provided under any other law, 17 nor does it create a tax exemption with respect to the interest of any business 18 enterprise or other person, other than the authority, in any property, assets, income, 19 receipts, project, development project, or lease whether or not financed under this 20 chapter. By January 10 of each year, the authority shall submit to the governor a report 21 describing the nature and extent of the tax exemption of the property, assets, income, 22 receipts, project, development project, and leasehold interests of the authority under 23 this section. The authority shall notify the legislature that the report is available. 24  * Sec. 14. AS 44.88 is amended by adding a new section to read: 25 Sec. 44.88.168. Oil and gas infrastructure fund. (a) The oil and gas 26 infrastructure fund is established in the authority. The oil and gas infrastructure fund 27 consists of money appropriated to the authority for deposit in the fund, and money 28 deposited in the fund by the authority. The fund is not an account in the revolving loan 29 fund established in AS 44.88.060, and the authority shall account for the fund 30 separately from the revolving fund. Money in the fund may be used to finance the 31 construction and improvement of an oil or gas processing facility on the North Slope 01 and flow lines and other surface infrastructure for the facility. 02 (b) Notwithstanding AS 44.88.140, the state or a political subdivision of the 03 state may levy a tax or special assessment on an oil or gas processing facility, flow 04 lines, and other surface infrastructure for the facility financed by the oil and gas 05 infrastructure fund. 06 (c) In this section, "North Slope" means that area of the state lying north of 68 07 degrees North latitude. 08  * Sec. 15. AS 43.20.144 is repealed. 09  * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 APPLICABILITY. AS 43.21, added by sec. 6 of this Act, applies to taxable income 12 earned or received after December 31, 2013. 13  * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 REGULATIONS. (a) The Department of Revenue may adopt regulations necessary to 16 implement AS 43.21, added by sec. 6 of this Act. The regulations take effect under AS 44.62 17 (Administrative Procedure Act), but not before the effective date of the law implemented by 18 regulation. 19 (b) The Department of Revenue shall provide by regulation for a transition for a 20 corporation subject to tax under AS 43.20 before December 31, 2013, to avoid double 21 taxation of the same income or double deduction of the same expense of the corporation as a 22 result of becoming subject to tax under AS 43.21, added by sec. 6 of this Act. 23 (c) The Department of Revenue may adopt regulations necessary to provide a five- 24 year transition period for the adoption of applicable depreciation schedules. 25  * Sec. 18. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 LEGISLATIVE APPROVAL; NORTH SLOPE OIL OR GAS PROCESSING 28 FACILITY. (a) The Alaska Industrial Development and Export Authority may issue bonds to 29 finance the construction and improvement of an oil or gas processing facility on the Alaska 30 North Slope and flow lines and other surface infrastructure for the facility. The processing 31 facility, flow lines, and other surface infrastructure for the facility shall be used to secure 01 bonds issued under this section. The principal amount of the bonds provided by the authority 02 for the facility, flow lines, and other surface infrastructure may not exceed $200,000,000 and 03 may include the costs of funding reserves and other costs of issuing the bonds that the 04 authority considers reasonable and appropriate. Notwithstanding AS 44.88.140, an oil or gas 05 processing facility, flow lines, and other surface infrastructure for the facility constructed or 06 financed by the oil and gas infrastructure fund are subject to taxes and special assessments of 07 the state or a political subdivision of the state. 08 (b) This section constitutes the legislative approval required by AS 44.88.095(g) and 09 44.88.690. 10 (c) The prohibition on the issuance of bonds in an amount exceeding $400,000,000 11 under AS 44.88.095 does not apply to bonds issued under this section, and the principal 12 amount of bonds issued under this section may not be considered in determining whether the 13 limit in AS 44.88.095 has been reached. 14  * Sec. 19. Section 18 of this Act is repealed June 30, 2017. Repeal of sec. 18 of this Act 15 does not affect bonds the authority issues under sec. 18 of this Act before June 30, 2017. 16  * Sec. 20. Section 17 of this Act takes effect immediately under AS 01.10.070(c). 17  * Sec. 21. Except as provided in sec. 20 of this Act, this Act takes effect January 1, 2014.