00 CS FOR SENATE BILL NO. 280(RES) 01 "An Act relating to oil and gas; relating to the determination of the value of taxable real 02 and personal property for purposes of calculating the local contribution for public 03 school funding; relating to limitations on municipal oil and gas property taxes; relating 04 to the regulation of liquefied natural gas import facilities and utility rates approved by 05 the Regulatory Commission of Alaska; relating to the Alaska Gasline Development 06 Corporation; establishing an income tax on certain entities producing or transporting 07 oil or gas in the state; relating to the taxation of certain natural gas pipeline property 08 and related facilities; relating to the minimum production tax on oil; establishing an 09 infrastructure maintenance surcharge on oil and a related Dalton Highway pipeline 10 corridor maintenance fund; relating to an alternative volumetric throughput tax on 11 certain natural gas pipelines and related facilities; creating an Alaska gasline 12 community impact fund; and providing for an effective date." 01 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 02  * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 03 to read: 04 SHORT TITLE. This Act may be known as the Supporting a Gasline for Alaskans 05 Act. 06  * Sec. 2. AS 14.17.510 is amended by adding a new subsection to read: 07 (d) In this section, the full and true value of the taxable real and personal 08 property does not include a qualified property as defined in AS 43.59.100. 09  * Sec. 3. AS 29.45.050 is amended by adding a new subsection to read: 10 (aa) A municipality may by ordinance exempt or partially exempt from 11 taxation a spur line that services a Fairbanks natural gas utility. 12  * Sec. 4. AS 29.45.080(c) is amended to read: 13 (c) A municipality may levy and collect a tax on the full and true value of that 14 portion of taxable property taxable under AS 43.56 as assessed by the Department of 15 Revenue which value, when combined with the value of property otherwise taxable by 16 the municipality, does not exceed the product of the percentage determined in (f) of 17 this section of the average per capita assessed full and true value of property in the 18 state multiplied by the number of residents of the taxing municipality. Property  19 subject to the alternative volumetric tax levied under AS 43.59.010 is not  20 included in the value of property for the purpose of making the calculation under  21 this subsection.  22  * Sec. 5. AS 29.45.080(c), as amended by sec. 4 of this Act, is amended to read: 23 (c) A municipality may levy and collect a tax on the full and true value of that 24 portion of taxable property taxable under AS 43.56 as assessed by the Department of 25 Revenue which value, when combined with the value of property otherwise taxable by 26 the municipality, does not exceed the product of the percentage determined in (f) of 27 this section of the average per capita assessed full and true value of property in the 28 state multiplied by the number of residents of the taxing municipality. [PROPERTY 29 SUBJECT TO THE ALTERNATIVE VOLUMETRIC TAX LEVIED UNDER 30 AS 43.59.010 IS NOT INCLUDED IN THE VALUE OF PROPERTY FOR THE 31 PURPOSE OF MAKING THE CALCULATION UNDER THIS SUBSECTION.] 01  * Sec. 6. AS 29.45.080 is amended by adding a new subsection to read: 02 (g) Notwithstanding any other provision of this section, AS 29.45.090, or the 03 authority granted to a municipality under AS 29.45.050 to exempt or defer taxation, a 04 municipality may not levy a tax under this section on qualified property, as defined in 05 AS 43.59.100, if the qualified property is subject to the alternative volumetric tax 06 levied under AS 43.59.010. 07  * Sec. 7. AS 29.60.860 is amended by adding a new subsection to read: 08 (d) Amounts allocated under AS 44.33.850(c) for distribution on a per capita 09 basis shall be distributed to municipalities, reserves, and communities in the 10 unorganized borough in accordance with this section. 11  * Sec. 8. AS 29.60.860 is amended by adding a new subsection to read: 12 (e) Amounts allocated under AS 43.59.040(3) for distribution on a per capita 13 basis shall be distributed to municipalities, reserves, and communities in the 14 unorganized borough in accordance with this section. 15  * Sec. 9. AS 31.25.010 is amended to read: 16 Sec. 31.25.010. Structure. The Alaska Gasline Development Corporation is a 17 public corporation and government instrumentality acting in the best interest and as a  18 fiduciary of the state for the purposes required by AS 31.25.005, located for 19 administrative purposes in the Department of Commerce, Community, and Economic 20 Development, but having a legal existence independent of and separate from the state. 21 The corporation may not be terminated as long as it has bonds, notes, or other 22 obligations outstanding. The corporation may dissolve when no bonds, notes, or other 23 obligations of the corporation or a subsidiary of the corporation are outstanding and 24 the corporation or a subsidiary of the corporation is no longer engaged in the 25 development, financing, construction, or operation of an in-state natural gas pipeline 26 or an Alaska liquefied natural gas project. Upon termination of the corporation, its 27 rights and property pass to the state. 28  * Sec. 10. AS 31.25.030 is amended by adding a new subsection to read: 29 (f) Notwithstanding application of AS 44.62.310 - 44.62.319 (Open Meetings 30 Act) under AS 31.25.130, absent exigent circumstances, the board shall provide at 31 least 10 working days' public notice before a meeting. In the event of exigent 01 circumstances, the board shall provide at least three working days' public notice before 02 a meeting. The board shall provide public notice of a regularly scheduled meeting 03 within 24 hours after the meeting is scheduled. In this subsection, "working day" 04 means a calendar day other than Saturday, Sunday, an official federal holiday, or an 05 official holiday of this state. 06  * Sec. 11. AS 31.25.040(b) is amended to read: 07 (b) The board shall by regulation adopted under AS 44.62 (Administrative  08 Procedure Act) adopt and publish procedures to govern the procurement by the 09 corporation of supplies, services, professional services, and construction. The 10 procurement procedures must 11 (1) reflect competitive bidding principles and provide vendors  12 reasonable and equitable opportunities to participate in the procurement  13 process;  14 (2) include procurement methods to meet emergency and  15 extraordinary circumstances;  16 (3) comply with the five percent preference under AS 36.30.321(a);  17 and  18 (4) provide for an Alaska veterans' preference that is consistent with 19 the Alaska veterans' preference in AS 36.30.175. 20  * Sec. 12. AS 31.25.080(a) is amended to read: 21 (a) In addition to other powers granted in this chapter, the corporation may 22 (1) determine the form of ownership and the operating structure of an 23 in-state natural gas pipeline developed by the corporation and may, subject to  24 AS 31.25.120(b), enter into agreements with other persons for joint ownership, joint 25 operation, or both of an in-state natural gas pipeline or an Alaska liquefied natural gas 26 project; 27 (2) plan, finance, construct, develop, acquire, maintain, and operate a 28 pipeline system and other transportation mechanism, including pipelines, compressors, 29 storage facilities, and other related facilities, equipment, and works of public 30 improvement, in the state to facilitate production, transportation, and delivery of 31 natural gas or other related natural resources to the point of consumption or to the 01 point of distribution for consumption; 02 (3) lease or rent facilities, structures, and properties; 03 (4) exercise the power of eminent domain and file a declaration of 04 taking under AS 09.55.240 - 09.55.460 to acquire land or an interest in land that is 05 necessary for an in-state natural gas pipeline or an Alaska liquefied natural gas project; 06 the exercise of powers by the corporation under this paragraph may not exceed the 07 permissible exercise of the powers by the state; 08 (5) acquire, by purchase, lease, or gift, land, structures, real or personal 09 property, an interest in property, a right-of-way, a franchise, an easement, or other 10 interest in land, or an interest in or right to capacity in a pipeline system determined to 11 be necessary or convenient for the development, financing, construction, or operation 12 of an in-state natural gas pipeline project or an Alaska liquefied natural gas project or 13 part of an in-state natural gas pipeline project or an Alaska liquefied natural gas 14 project; 15 (6) subject to AS 31.25.120(b), transfer or otherwise dispose of all or 16 part of an in-state natural gas pipeline project, an Alaska liquefied natural gas project, 17 or an interest in an asset of the corporation; 18 (7) elect to provide transportation of natural gas as a contract carrier, 19 common carrier, or otherwise; 20 (8) provide light, water, security, and other services for property of the 21 corporation; 22 (9) conduct hearings to gather and develop data consistent with the 23 purpose and powers of the corporation; 24 (10) advocate for new pipeline capacity before the Federal Energy 25 Regulatory Commission; 26 (11) make and execute agreements, contracts, and other instruments 27 necessary or convenient in the exercise of the powers and functions of the corporation 28 under this chapter, including a contract with a person, firm, corporation, governmental 29 agency, or other entity; 30 (12) sue and be sued in its own name; 31 (13) adopt an official seal; 01 (14) adopt bylaws for the regulation of its affairs and the conduct of its 02 business and adopt regulations and policies in connection with the performance of its 03 functions and duties; 04 (15) employ fiscal consultants, engineers, attorneys, appraisers, and 05 other consultants and employees that may, in the judgment of the corporation, be 06 required and fix and pay their compensation from funds available to the corporation; 07 (16) procure insurance against a loss in connection with its operation; 08 (17) borrow money as provided in this chapter to carry out its 09 corporate purposes and issue its obligations as evidence of borrowing; 10 (18) include in a borrowing the amounts necessary to pay financing 11 charges, to pay interest on the obligations, and to pay the interest, consultant, advisory, 12 and legal fees, and other expenses that are necessary or incident to the borrowing; 13 (19) receive, administer, and comply with the conditions and 14 requirements of an appropriation, gift, grant, or donation of property or money; 15 (20) do all acts and things necessary, convenient, or desirable to carry 16 out the powers expressly granted or necessarily implied in this chapter; 17 (21) invest or reinvest, subject to its contracts with noteholders and 18 bondholders, money or funds held by the corporation, including funds in the in-state 19 natural gas pipeline fund (AS 31.25.100) and the Alaska liquefied natural gas project 20 fund (AS 31.25.110), in obligations or other securities or investments in which banks 21 or trust companies in the state may legally invest funds held in reserves or sinking 22 funds or funds not required for immediate disbursement, and in certificates of deposit 23 or time deposits secured by obligations of, or guaranteed by, the state or the United 24 States; 25 (22) enter into, as it determines to be necessary or appropriate, any 26 swap or hedge, cap, or other contract providing for payments based on levels of or 27 changes in interest rates or indices or in the cost or price of any commodity, supply, or 28 expense expected to be used or incurred in connection with the acquisition, 29 construction, or operation of any facility or property owned, leased, or operated by the 30 corporation, or an option with respect to any of the foregoing; 31 (23) except as provided in (g) of this section, acquire an ownership or 01 participation interest in an Alaska liquefied natural gas project, natural gas treatment 02 facilities, natural gas pipeline facilities, liquefaction facilities, marine terminal 03 facilities related to the infrastructure of an Alaska liquefied natural gas project, or an 04 entity or joint venture that has an ownership interest in or is engaged in the planning, 05 financing, acquisition, maintenance, construction, and operation of an Alaska liquefied 06 natural gas project; 07 (24) after consultation with the commissioner of revenue and the 08 commissioner of natural resources, enter into contracts relating to an Alaska liquefied 09 natural gas project, including contracts for services related to operation, marketing, 10 transportation, gas treatment, marine terminal operation, or liquefaction. 11  * Sec. 13. AS 31.25.080 is amended by adding new subsections to read: 12 (h) The corporation shall, to the maximum extent possible, use contractors and 13 suppliers in the state in order to benefit from the experience of workers and businesses 14 in the state in arctic engineering and construction. 15 (i) A gas sales agreement entered into by the corporation, or a subsidiary of 16 the corporation, 17 (1) shall require that a public utility in the state, or an entity shipping 18 gas for delivery to a public utility in the state, have priority over sales to out-of-state 19 purchasers if the transportation capacity of a gas pipeline is reduced; and 20 (2) may include other reasonable terms and conditions that are 21 consistent with this chapter and that are for the mutual benefit of the gas pipeline and 22 the public. 23 (j) A gas pipeline advanced, operated, or owned, in whole or in part, by the 24 corporation, or a subsidiary of the corporation, must include a direct spur line to serve 25 the City of Fairbanks and the Fairbanks North Star Borough. 26 (k) An owner or operator of a gas pipeline advanced, operated, or owned, in 27 whole or in part, by the corporation, or a subsidiary of the corporation, 28 (1) may not recoup cost overruns from the construction of the first 29 phase of a gas pipeline by increasing the rates charged to a utility; in this paragraph, 30 (A) "cost overrun" means a cost in excess of $15,000,000,000; 31 (B) "first phase of a gas pipeline" means at least 730 miles of 01 42-inch pipeline constructed to transport natural gas from the North Slope and 02 deliver the natural gas to in-state consumers; 03 (2) may not charge a utility in the state more than 04 (A) $12 for each 1,000 cubic feet of natural gas after 05 completion of the gas pipeline, but before the completion of a related liquefied 06 natural gas plant; 07 (B) $5 for each 1,000 cubic feet of natural gas after completion 08 of a liquefied natural gas plant related to the gas pipeline. 09 (l) An owner or operator of a gas pipeline advanced, operated, or owned, in 10 whole or in part, by the corporation or a subsidiary of the corporation, shall ensure that 11 natural gas that is produced from the Cook Inlet sedimentary basin and available for 12 sale and transportation is transported, on commercially reasonable terms, by the gas 13 pipeline. This subsection does not apply if the commissioner of natural resources 14 determines in writing that the supply of economically recoverable natural gas available 15 for commercial sale from the Cook Inlet sedimentary basin is insufficient. 16  * Sec. 14. AS 31.25.090(f) is amended to read: 17 (f) Subject to the restrictions in this section, the [THE] corporation may 18 enter into confidentiality agreements necessary to acquire or provide information to 19 carry out its functions. If a state agency determines that a law or provision of a 20 contract to which the state agency is a party requires the state agency to preserve the 21 confidentiality of the information and that delivering the information to the 22 corporation would violate the confidentiality provision of that law or contract, the state 23 agency shall 24 (1) identify the applicable law or contract provision to the corporation; 25 and 26 (2) obtain the consent of the person who has the right to waive the 27 confidentiality of the information under the applicable law or contract provision before 28 the state agency transfers the information to the corporation. 29  * Sec. 15. AS 31.25.090 is amended by adding new subsections to read: 30 (j) The parties to a confidentiality agreement entered into under (f) of this 31 section may agree to waive confidentiality, in whole or in part, to allow the release of 01 information to a legislator or a public agent or for publication. Information released 02 under this subsection may include reasonable redactions. Information released under 03 this subsection may include 04 (1) a contract or agreement or a specific term of a contract or 05 agreement; 06 (2) a pending contract or agreement or a specific term of a pending 07 contract or agreement; 08 (3) a record, file, or other information in possession of the corporation, 09 a subsidiary of the corporation, or an entity partnered with the corporation; or 10 (4) the confidentiality agreement or terms of the confidentiality 11 agreement. 12 (k) A confidentiality agreement entered into under (f) of this section may not 13 (1) prevent compliance with an administrative or court order 14 mandating disclosure; 15 (2) make confidential contract terms, including terms for in-kind 16 payments or services, or prospective contract terms, that bind the corporation, a 17 subsidiary of the corporation, or an entity with which the corporation, or a subsidiary 18 of the corporation, has a legal relationship to assume fiscal or performance liability, 19 obligation, or risk that could extend to or encumber the state, either directly or 20 indirectly; in this paragraph, "legal relationship" means a partnership, joint venture, 21 joint ownership agreement, or other legally binding business arrangement formed for 22 the purpose of shared ownership or management of, or pooling of resources for, an 23 entity in which the corporation, or a subsidiary of the corporation, has an ownership or 24 management interest; 25 (3) make confidential information that is related to known or 26 reasonably anticipated project economics that may lead to a significant fiscal effect or 27 liability to the state and that is necessary for the state to consider for a policy decision, 28 including a decision related to appropriations or other state funding or in-kind 29 payments or services from the state; 30 (4) make confidential contract terms governing the ownership or 31 management structure of a subsidiary of the corporation; or 01 (5) make confidential information related to a state interest option 02 under AS 31.25.125. 03 (l) Upon request of a legislative committee or a member of the legislature, the 04 corporation or a subsidiary of the corporation shall provide information disclosable 05 under (k)(2) - (5) of this section. A legislative committee or member of the legislature 06 may request the information to be provided in a summarized format, with written 07 explanations, as necessary to assist the legislature in assessing relevant fiscal effects, 08 liabilities, or risks to the state. 09 (m) If the public disclosure of the information described in (k)(3) of this 10 section would cause commercial or competitive harm to an entity involved in a 11 component of the Alaska liquefied natural gas project, the information may be made 12 confidential under a confidentiality agreement entered into under (f) of this section if, 13 under the agreement, 14 (1) reasonable estimations or ranges of estimations of the information 15 may be publicly disclosed; or 16 (2) the information can be publicly disclosed in a redacted or 17 generalized format and the information disclosed is accurate and sufficient for a public 18 agent to assess the related fiscal effect, risk, or liability to the state. 19 (n) In this section, "public agent" means 20 (1) a public agency, as defined in AS 40.25.220, or an agent or 21 contractor of a public agency; 22 (2) an agent or contractor of a member of the legislature or of a 23 legislative committee. 24  * Sec. 16. AS 31.25.120 is amended by adding a new subsection to read: 25 (b) Unless the legislature approves the action by law, the corporation may not 26 transfer, sell, or otherwise dispose of an ownership or management interest in a 27 subsidiary of the corporation. 28  * Sec. 17. AS 31.25 is amended by adding a new section to read: 29 Sec. 31.25.125. Involvement in revenue-generating projects. (a) If the 30 corporation negotiates with another entity for participation by the corporation in a 31 revenue-generating project, the corporation shall negotiate an option for the state to 01 acquire an interest in the project. The corporation shall immediately notify the 02 president of the senate, the speaker of the house of representatives, and the chairs of 03 the finance committee of each house of the legislature on each occasion that an option 04 is available for consideration by the legislature. 05 (b) An option negotiated under this section must 06 (1) before being agreed to, be approved by the legislature by law; and 07 (2) allow the state to exercise the option for at least 12 months after 08 notification of the legislature under (d) of this section. 09 (c) At the request of the legislature, a state agency shall cooperate with and 10 assist the legislature in determining whether to approve under (b)(1) of this section the 11 terms of an option negotiated under (a) of this section. 12 (d) The corporation shall immediately notify the president of the senate, the 13 speaker of the house of representatives, and the chairs of the finance committee of 14 each house of the legislature on each occasion that the state may exercise an option 15 negotiated under (a) of this section. The corporation shall notify the legislature under 16 this subsection on the later of the date that 17 (1) the corporation determines, with reasonable assurance and 18 considering the totality of circumstances, including review of all relevant financial 19 information, that the revenue-generating project will be completed, with or without 20 state investment; or 21 (2) a final investment decision is made for the revenue-generating 22 project. 23 (e) The state may not acquire an interest in a revenue-generating project under 24 this section unless the interest is approved by the legislature by law. When making an 25 investment decision under this section, the legislature shall act as a prudent investor. 26 (f) The Department of Revenue shall cooperate with and assist the legislature 27 in determining whether to acquire an interest in a revenue-generating project under (e) 28 of this section by exercising an option negotiated under (a) of this section, including 29 by identifying potential funding sources for exercising the option and potential fiscal 30 effects on the state. If requested by the legislature, another state agency shall cooperate 31 with and assist the legislature with making a determination under (e) of this section. 01 (g) The corporation, and any other entity participating in a revenue-generating 02 project, shall 03 (1) cooperate with and assist the legislature in determining whether to 04 approve the terms of an option negotiated under (a) of this section or to acquire an 05 interest in the project by exercising an option negotiated under this section; 06 (2) provide information requested by the legislature related to the 07 project, including 08 (A) information necessary for the legislature to act as a prudent 09 investor; and 10 (B) financial records of or related to the revenue-generating 11 project; and 12 (3) ensure that at least one representative of the corporation and of 13 each participating entity are available to testify during public hearings of legislative 14 committees requesting testimony. 15 (h) In this section, 16 (1) "corporation" includes a subsidiary of the corporation; 17 notwithstanding the definition of "subsidiary of the corporation" in AS 31.25.390, a 18 subsidiary of a corporation does not include a partially owned subsidiary for purposes 19 of this section; 20 (2) "revenue-generating project" means a project, entity ownership, 21 legal business arrangement, partnership, joint venture, or other commercial endeavor 22 expected to generate revenue. 23  * Sec. 18. AS 31.25.130(a) is amended to read: 24 (a) Except as otherwise provided in this chapter and except for 25 AS 44.62.310 - 44.62.319 (Open Meetings Act), AS 44.62 (Administrative Procedure 26 Act) does not apply to this chapter. The corporation shall make available to members 27 of the public copies of the regulations adopted under (b) - (e) of this section. 28  * Sec. 19. AS 31.25 is amended by adding a new section to article 1 to read: 29 Sec. 31.25.145. Accounting. (a) The corporation shall deposit into separate 30 accounts in the general fund revenue 31 (1) generated by a subsidiary of the corporation; and 01 (2) resulting from an option negotiated under AS 31.25.125. 02 (b) Each year, the legislature may appropriate the annual estimated balance in 03 the account described in (a)(1) of this section for operations of the corporation or for 04 any other purpose. 05  * Sec. 20. AS 31.25.160 is amended by adding a new subsection to read: 06 (g) The corporation, or a subsidiary of the corporation, may issue bonds only 07 if the legislature approves issuance of the bonds, except for refunding bonds. 08 Refunding bonds may be issued without further approval by the legislature in a 09 principal amount sufficient to provide funds for the payment of all bonds to be 10 refunded by the refunding bonds and, in addition, for the payment of all other amounts 11 that the corporation considers appropriate in connection with the refunding, including 12 expenses incident to the redeeming, calling, retiring, or paying of the outstanding 13 bonds, the funding of reserves, and the issuance of the refunding bonds. 14  * Sec. 21. AS 31.25.260(a) is amended to read: 15 (a) The exercise of the powers granted by this chapter is, in all respects, for 16 the benefit of the people of the state, for the people's [THEIR] well-being and 17 prosperity, and for the improvement of the people's [THEIR] social and economic 18 conditions, and, except as provided in AS 43.59.010(f), the corporation is not 19 required to pay a tax or assessment on any property owned by the corporation under 20 the provisions of this chapter or on the income from it, including state taxes levied or 21 authorized under AS 43.56.010(a) and municipal taxes under AS 43.56.010(b) as 22 provided in AS 43.56.020. 23  * Sec. 22. AS 31.25.260(a), as amended by sec. 21 of this Act, is amended to read: 24 (a) The exercise of the powers granted by this chapter is, in all respects, for 25 the benefit of the people of the state, for the people's well-being and prosperity, and 26 for the improvement of the people's social and economic conditions, and [, EXCEPT 27 AS PROVIDED IN AS 43.59.010(f),] the corporation is not required to pay a tax or 28 assessment on any property owned by the corporation under the provisions of this 29 chapter or on the income from it, including state taxes levied or authorized under 30 AS 43.56.010(a) and municipal taxes under AS 43.56.010(b) as provided in 31 AS 43.56.020. 01  * Sec. 23. AS 31.25 is amended by adding new sections to read: 02 Sec. 31.25.280. Relationships with foreign entities. (a) The corporation shall 03 promptly provide written notice to the president of the senate, the speaker of the house 04 of representatives, and the chairs of the finance committee of each house of the 05 legislature if the corporation, or a subsidiary of the corporation, enters into a legal 06 relationship with a foreign entity, either directly or indirectly through another person 07 or entity. The notification under this section must 08 (1) be provided at least quarterly on the calendar year; 09 (2) include 10 (A) the full legal name of the foreign entity; 11 (B) a description of the legal relationship and any project 12 related to the legal relationship; 13 (C) the name of at least one individual authorized to bind the 14 foreign entity on matters related to the legal relationship; 15 (D) the physical address of the primary business operations of 16 the foreign entity; and 17 (E) the date the legal relationship was entered into. 18 (b) In addition to providing notification under (a) of this section, the 19 corporation shall ensure that an agent of the corporation or a subsidiary of the 20 corporation, if requested, is available to testify relating to the legal relationship during 21 one or more public hearings of legislative committees requesting testimony. 22 (c) In this section, "legal relationship" means a partnership, joint venture, joint 23 ownership agreement, merger, or other legal agreement made for the purpose of 24 investing in, obtaining monetary returns from, or obtaining an ownership interest in 25 (1) a project developed by the corporation or a subsidiary of the 26 corporation; 27 (2) a project in which the corporation or a subsidiary of the corporation 28 has an ownership or management interest; or 29 (3) an entity engaged in a project described in (1) or (2) of this 30 subsection. 31 Sec. 31.25.285. Legislative notification of ownership change. (a) The 01 corporation shall promptly notify the president of the senate, the speaker of the house 02 of representatives, and the chairs of the finance committee of each house of the 03 legislature if 04 (1) an entity in a legal relationship with the corporation, or a subsidiary 05 of the corporation, has a significant change in ownership structure; or 06 (2) the corporation becomes aware that an entity in a legal relationship 07 with the corporation, or a subsidiary of the corporation, plans to make a significant 08 change in ownership structure. 09 (b) In this section, "legal relationship" means a partnership, joint venture, joint 10 ownership agreement, or other legally binding business arrangement 11 (1) of which the corporation, or a subsidiary of the corporation, has at 12 least a 10 percent interest; or 13 (2) that has an interest in a third entity in which the corporation, or a 14 subsidiary of the corporation, also has at least a 10 percent interest; and 15 (3) that formed for the purpose of shared ownership or shared 16 management of, or pooling of resources for, an entity in which the corporation, or a 17 subsidiary of the corporation, has an ownership or management interest. 18  * Sec. 24. AS 31.25.390 is amended by adding new paragraphs to read: 19 (8) "foreign entity" means 20 (A) an entity whose primary operations are not physically 21 located in the United States and that is not managed primarily by citizens of 22 the United States; or 23 (B) a natural person who is not a citizen of the United States; 24 (9) "subsidiary of the corporation" includes a subsidiary partially 25 owned by the corporation. 26  * Sec. 25. AS 38.05.180 is amended by adding a new subsection to read: 27 (mm) Before taking oil or gas royalties in value, the commissioner shall 28 determine that the value taken is based on the value of oil or gas of the same kind, 29 quality, and character prevailing for that field, unit, or area during the calendar month 30 the oil or gas is produced. The commissioner may take royalties on oil or gas that is 31 produced but not sold and may take royalties on gas that is produced and stored in a 01 gas storage facility. The commissioner may not, when making a value determination 02 under this subsection, base a value for oil or gas on oil or gas sold at no cost or at a 03 cost substantially lower than that of other oil or gas of the same kind, quality, and 04 character. 05  * Sec. 26. AS 42.05 is amended by adding a new section to read: 06 Sec. 42.05.387. Rates charged by Alaska Gasline Development  07 Corporation gas pipeline. (a) An owner or operator of a gas pipeline advanced, 08 operated, or owned, in whole or in part, by the Alaska Gasline Development 09 Corporation, or a subsidiary of the corporation, 10 (1) may not recoup cost overruns from the construction of the first 11 phase of a gas pipeline by increasing the rates charged to a utility; in this paragraph, 12 "cost overrun" and "first phase of a gas pipeline" have the meanings given in 13 AS 31.25.080; 14 (2) may not charge a utility in the state more than 15 (A) $12 for each 1,000 cubic feet of natural gas after 16 completion of the gas pipeline, but before the completion of a related liquefied 17 natural gas plant; 18 (B) $5 for each 1,000 cubic feet of natural gas after completion 19 of a liquefied natural gas plant related to the gas pipeline. 20 (b) The commission has jurisdiction to enforce this section to the extent not 21 preempted by federal law. 22 (c) In this section, 23 (1) "gas pipeline" has the meaning given in AS 31.25.390; 24 (2) "liquefied natural gas plant" has the meaning given in 25 AS 31.25.390. 26  * Sec. 27. AS 43.20 is amended by adding a new section to read: 27 Sec. 43.20.019. Tax on income of certain oil and gas pass-through entities.  28 (a) Each taxable year, a tax is imposed on the entire taxable income derived from 29 sources in the state of every qualified entity. The tax is computed as follows: 30 If the taxable income is: Then the tax is: 31 Less than $1,000,000 zero 01 $1,000,000 but less than $2,000,000 5 percent of the 02 taxable income over $1,000,000 03 $2,000,000 but less than $3,000,000 $50,000 plus 6 percent of the 04 taxable income over $2,000,000 05 $3,000,000 but less than $4,000,000 $110,000 plus 7 percent of the 06 taxable income over $3,000,000 07 $4,000,000 but less than $5,000,000 $180,000 plus 8 percent of the 08 taxable income over $4,000,000 09 $5,000,000 or more $260,000 plus 9.4 percent of the 10 taxable income over $5,000,000. 11 (b) For purposes of calculating taxable income under this section, 12 (1) taxable income of a qualified entity is determined under 13 AS 43.20.144 as if the qualified entity were taxable as a C corporation, as defined by 14 26 U.S.C. 1361(a)(2) (Internal Revenue Code), as that section read on January 1, 15 2026; 16 (2) notwithstanding AS 43.20.021 and AS 43.20.036, a qualified entity 17 may not apply as a credit or deduction against tax liability a credit or deduction 18 allowed as to federal taxes under 26 U.S.C. (Internal Revenue Code), except that the 19 qualified entity may take a credit or deduction allowed for a C corporation under (1) of 20 this subsection. 21 (c) The tax under this section does not apply to a corporation subject to tax 22 under AS 43.20.011 or to an entity that is part of a unitary business with a corporation 23 subject to tax under AS 43.20.011. 24 (d) A public corporation is exempt from the tax under this section. If a 25 qualified entity is held in part by a public corporation, income in proportion to the 26 ownership interest held by the public corporation is exempt from the tax under this 27 section. The department may direct each owner of a qualified entity that is owned in 28 part by the Alaska Gasline Development Corporation (AS 31.25) to file a return with 29 the department. Notwithstanding AS 40.25.100(a) and AS 43.05.230(a), a return filed 30 by the Alaska Gasline Development Corporation under this subsection is a public 31 record and is not confidential. 01 (e) For the purpose of determining the tax due under this section, the 02 department shall 03 (1) aggregate the taxable income of two or more entities if the 04 department determines that, without the provisions of this section, the taxable income 05 would reasonably be expected to be attributed to a single entity; 06 (2) except as provided in (c) of this section, include in the calculation 07 of taxable income of the qualified entity income that is attributable to an entity that is 08 part of a unitary business with the qualified entity paying tax under this section; and 09 (3) adopt regulations to prevent evasion of taxes imposed under this 10 section. 11 (f) For purposes of calculating income under this section, a qualified entity 12 may deduct from income a payment to the shareholder, owner, member, or partner of 13 the qualified entity, if 14 (1) the shareholder, owner, member, or partner is a taxpayer under this 15 chapter; 16 (2) the payment does not include a transfer of property; 17 (3) the payment is included in the shareholder's, owner's, member's, or 18 partner's income for purposes of this chapter; and 19 (4) the payment was not made with the specific intent to reduce or 20 evade the payment of tax under this chapter. 21 (g) In this section, 22 (1) "carbon capture" and "carbon storage" have the meanings given in 23 AS 43.55.165(e)(23); 24 (2) "pipeline" means a pipeline that transports oil or gas from north of 25 68 degrees North latitude to a location outside of the lease or property where the oil or 26 gas is produced for the direct purpose of sale and delivery of the oil or gas to a 27 commercial market; 28 (3) "qualified entity" 29 (A) means a sole proprietorship, partnership, limited liability 30 company, or entity that has elected to file federal returns under 26 U.S.C. 1361 31 - 1379 (Internal Revenue Code) that 01 (i) has taxable income; 02 (ii) owns, operates, manages, or controls an entity that 03 has taxable income; 04 (iii) holds an ownership, investment, or similar interest 05 in an entity that has taxable income; or 06 (iv) owns an operating right, operating interest, or 07 working interest in a mineral interest of an entity with taxable income; 08 (B) does not include a natural person; 09 (4) "taxable income" means income 10 (A) from the production of oil or gas from a lease or property 11 in the state; 12 (B) from the transportation of oil or gas by pipeline in the state; 13 (C) from the supply of oil or gas for transportation by pipeline 14 in the state, whether directly, to an intermediary, or as an intermediary; 15 (D) from gas treatment, carbon capture, or carbon storage 16 activities in the state; 17 (E) from liquefied natural gas processing in the state; 18 (F) from the marine transportation of liquefied natural gas 19 produced in the state; and 20 (G) of an entity that is part of a unitary business with a carrier 21 or producer paying tax under this section as provided under (e)(2) of this 22 section. 23  * Sec. 28. AS 43.20.030(a) is amended to read: 24 (a) If a taxpayer [CORPORATION], or a partnership that has a taxpayer 25 [CORPORATION] as a partner, is required to make a return under the provisions of 26 the Internal Revenue Code, the taxpayer [IT] shall file with the department, within 30 27 days after the federal return is required to be filed, a return setting out 28 (1) the amount of tax due under this chapter, less credits claimed 29 against the tax; and 30 (2) other information for the purpose of carrying out the provisions of 31 this chapter that the department requires. 01  * Sec. 29. AS 43.20.031(i) is amended to read: 02 (i) A taxpayer that [CORPORATION WHICH] is a member of a group of 03 unitary corporations or entities that [WHICH] collectively has income from business 04 activity taxable both inside and outside the state, or income from other sources both 05 inside and outside the state, shall determine its income from sources in this state by 06 use of the combined method of accounting. 07  * Sec. 30. AS 43.55.011(f) is amended to read: 08 (f) The levy of tax under (e) of this section for 09 (1) oil and gas produced before January 1, 2022, from leases or 10 properties that include land north of 68 degrees North latitude, other than gas subject 11 to (o) of this section, may not be less than 12 (A) four percent of the gross value at the point of production 13 when the average price per barrel for Alaska North Slope crude oil for sale on 14 the United States West Coast during the calendar year for which the tax is due 15 is more than $25; 16 (B) three percent of the gross value at the point of production 17 when the average price per barrel for Alaska North Slope crude oil for sale on 18 the United States West Coast during the calendar year for which the tax is due 19 is over $20 but not over $25; 20 (C) two percent of the gross value at the point of production 21 when the average price per barrel for Alaska North Slope crude oil for sale on 22 the United States West Coast during the calendar year for which the tax is due 23 is over $17.50 but not over $20; 24 (D) one percent of the gross value at the point of production 25 when the average price per barrel for Alaska North Slope crude oil for sale on 26 the United States West Coast during the calendar year for which the tax is due 27 is over $15 but not over $17.50; or 28 (E) zero percent of the gross value at the point of production 29 when the average price per barrel for Alaska North Slope crude oil for sale on 30 the United States West Coast during the calendar year for which the tax is due 31 is $15 or less; [AND] 01 (2) oil produced on and after January 1, 2022, and before January 1,  02 2027, from leases or properties that include land north of 68 degrees North latitude, 03 may not be less than 04 (A) four percent of the gross value at the point of production 05 when the average price per barrel for Alaska North Slope crude oil for sale on 06 the United States West Coast during the calendar year for which the tax is due 07 is more than $25; 08 (B) three percent of the gross value at the point of production 09 when the average price per barrel for Alaska North Slope crude oil for sale on 10 the United States West Coast during the calendar year for which the tax is due 11 is over $20 but not over $25; 12 (C) two percent of the gross value at the point of production 13 when the average price per barrel for Alaska North Slope crude oil for sale on 14 the United States West Coast during the calendar year for which the tax is due 15 is over $17.50 but not over $20; 16 (D) one percent of the gross value at the point of production 17 when the average price per barrel for Alaska North Slope crude oil for sale on 18 the United States West Coast during the calendar year for which the tax is due 19 is over $15 but not over $17.50; or 20 (E) zero percent of the gross value at the point of production 21 when the average price per barrel for Alaska North Slope crude oil for sale on 22 the United States West Coast during the calendar year for which the tax is due 23 is $15 or less; and  24 (3) oil produced on and after January 1, 2027, from leases or  25 properties that include land north of 68 degrees North latitude, may not be less  26 than  27 (A) six percent of the gross value at the point of production  28 when the average price per barrel for Alaska North Slope crude oil for  29 sale on the United States West Coast during the calendar year for which  30 the tax is due is more than $25;  31 (B) three percent of the gross value at the point of  01 production when the average price per barrel for Alaska North Slope  02 crude oil for sale on the United States West Coast during the calendar  03 year for which the tax is due is over $20 but not over $25;  04 (C) two percent of the gross value at the point of production  05 when the average price per barrel for Alaska North Slope crude oil for  06 sale on the United States West Coast during the calendar year for which  07 the tax is due is over $17.50 but not over $20;  08 (D) one percent of the gross value at the point of production  09 when the average price per barrel for Alaska North Slope crude oil for  10 sale on the United States West Coast during the calendar year for which  11 the tax is due is over $15 but not over $17.50; or  12 (E) zero percent of the gross value at the point of  13 production when the average price per barrel for Alaska North Slope  14 crude oil for sale on the United States West Coast during the calendar  15 year for which the tax is due is $15 or less. 16  * Sec. 31. AS 43.55.020(a) is amended to read: 17 (a) For a calendar year, a producer subject to tax under AS 43.55.011 shall pay 18 the tax as follows: 19 (1) for oil and gas produced before January 1, 2014, an installment 20 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 21 as allowed by law, is due for each month of the calendar year on the last day of the 22 following month; except as otherwise provided under (2) of this subsection, the 23 amount of the installment payment is the sum of the following amounts, less 1/12 of 24 the tax credits that are allowed by law to be applied against the tax levied by 25 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 26 not be less than zero: 27 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 28 produced from leases or properties in the state outside the Cook Inlet 29 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 30 the greater of 31 (i) zero; or 01 (ii) the sum of 25 percent and the tax rate calculated for 02 the month under AS 43.55.011(g) multiplied by the remainder obtained 03 by subtracting 1/12 of the producer's adjusted lease expenditures for the 04 calendar year of production under AS 43.55.165 and 43.55.170 that are 05 deductible for the oil and gas under AS 43.55.160 from the gross value 06 at the point of production of the oil and gas produced from the leases or 07 properties during the month for which the installment payment is 08 calculated; 09 (B) for oil and gas produced from leases or properties subject 10 to AS 43.55.011(f), the greatest of 11 (i) zero; 12 (ii) zero percent, one percent, two percent, three 13 percent, or four percent, as applicable, of the gross value at the point of 14 production of the oil and gas produced from the leases or properties 15 during the month for which the installment payment is calculated; or 16 (iii) the sum of 25 percent and the tax rate calculated for 17 the month under AS 43.55.011(g) multiplied by the remainder obtained 18 by subtracting 1/12 of the producer's adjusted lease expenditures for the 19 calendar year of production under AS 43.55.165 and 43.55.170 that are 20 deductible for the oil and gas under AS 43.55.160 from the gross value 21 at the point of production of the oil and gas produced from those leases 22 or properties during the month for which the installment payment is 23 calculated; 24 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 25 each lease or property, the greater of 26 (i) zero; or 27 (ii) the sum of 25 percent and the tax rate calculated for 28 the month under AS 43.55.011(g) multiplied by the remainder obtained 29 by subtracting 1/12 of the producer's adjusted lease expenditures for the 30 calendar year of production under AS 43.55.165 and 43.55.170 that are 31 deductible under AS 43.55.160 for the oil or gas, respectively, 01 produced from the lease or property from the gross value at the point of 02 production of the oil or gas, respectively, produced from the lease or 03 property during the month for which the installment payment is 04 calculated; 05 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 06 (i) the sum of 25 percent and the tax rate calculated for 07 the month under AS 43.55.011(g) multiplied by the remainder obtained 08 by subtracting 1/12 of the producer's adjusted lease expenditures for the 09 calendar year of production under AS 43.55.165 and 43.55.170 that are 10 deductible for the oil and gas under AS 43.55.160 from the gross value 11 at the point of production of the oil and gas produced from the leases or 12 properties during the month for which the installment payment is 13 calculated, but not less than zero; or 14 (ii) four percent of the gross value at the point of 15 production of the oil and gas produced from the leases or properties 16 during the month, but not less than zero; 17 (2) an amount calculated under (1)(C) of this subsection for oil or gas 18 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 19 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 20 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 21 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 22 gas produced during the month for the amount of taxable gas produced during the 23 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 24 during the month for the amount of taxable oil produced during the calendar year; 25 (3) an installment payment of the estimated tax levied by 26 AS 43.55.011(i) for each lease or property is due for each month of the calendar year 27 on the last day of the following month; the amount of the installment payment is the 28 sum of 29 (A) the applicable tax rate for oil provided under 30 AS 43.55.011(i), multiplied by the gross value at the point of production of the 31 oil taxable under AS 43.55.011(i) and produced from the lease or property 01 during the month; and 02 (B) the applicable tax rate for gas provided under 03 AS 43.55.011(i), multiplied by the gross value at the point of production of the 04 gas taxable under AS 43.55.011(i) and produced from the lease or property 05 during the month; 06 (4) any amount of tax levied by AS 43.55.011, net of any credits 07 applied as allowed by law, that exceeds the total of the amounts due as installment 08 payments of estimated tax is due on March 31 of the year following the calendar year 09 of production; 10 (5) for oil and gas produced on and after January 1, 2014, and before 11 January 1, 2022, an installment payment of the estimated tax levied by 12 AS 43.55.011(e), net of any tax credits applied as allowed by law, is due for each 13 month of the calendar year on the last day of the following month; except as otherwise 14 provided under (6) of this subsection, the amount of the installment payment is the 15 sum of the following amounts, less 1/12 of the tax credits that are allowed by law to be 16 applied against the tax levied by AS 43.55.011(e) for the calendar year, but the amount 17 of the installment payment may not be less than zero: 18 (A) for oil and gas not subject to AS 43.55.011(o) or (p) 19 produced from leases or properties in the state outside the Cook Inlet 20 sedimentary basin, other than leases or properties subject to AS 43.55.011(f), 21 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 and gas under AS 43.55.160 from the gross value 27 at the point of production of the oil and gas produced from the leases or 28 properties during the month for which the installment payment is 29 calculated; 30 (B) for oil and gas produced from leases or properties subject 31 to AS 43.55.011(f), the greatest of 01 (i) zero; 02 (ii) zero percent, one percent, two percent, three 03 percent, or four percent, as applicable, of the gross value at the point of 04 production of the oil and gas produced from the leases or properties 05 during the month for which the installment payment is calculated; or 06 (iii) 35 percent multiplied by the remainder obtained by 07 subtracting 1/12 of the producer's adjusted lease expenditures for the 08 calendar year of production under AS 43.55.165 and 43.55.170 that are 09 deductible for the oil and gas under AS 43.55.160 from the gross value 10 at the point of production of the oil and gas produced from those leases 11 or properties during the month for which the installment payment is 12 calculated, except that, for the purposes of this calculation, a reduction 13 from the gross value at the point of production may apply for oil and 14 gas subject to AS 43.55.160(f) or (g); 15 (C) for oil or gas subject to AS 43.55.011(j), (k), or (o), for 16 each lease or property, the greater of 17 (i) zero; or 18 (ii) 35 percent multiplied by the remainder obtained by 19 subtracting 1/12 of the producer's adjusted lease expenditures for the 20 calendar year of production under AS 43.55.165 and 43.55.170 that are 21 deductible under AS 43.55.160 for the oil or gas, respectively, 22 produced from the lease or property from the gross value at the point of 23 production of the oil or gas, respectively, produced from the lease or 24 property during the month for which the installment payment is 25 calculated; 26 (D) for oil and gas subject to AS 43.55.011(p), the lesser of 27 (i) 35 percent multiplied by the remainder obtained by 28 subtracting 1/12 of the producer's adjusted lease expenditures for the 29 calendar year of production under AS 43.55.165 and 43.55.170 that are 30 deductible for the oil and gas under AS 43.55.160 from the gross value 31 at the point of production of the oil and gas produced from the leases or 01 properties during the month for which the installment payment is 02 calculated, but not less than zero; or 03 (ii) four percent of the gross value at the point of 04 production of the oil and gas produced from the leases or properties 05 during the month, but not less than zero; 06 (6) an amount calculated under (5)(C) of this subsection for oil or gas 07 subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 08 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 09 applicable, for gas or set out in AS 43.55.011(k) for oil, but substituting in 10 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 11 gas produced during the month for the amount of taxable gas produced during the 12 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 13 during the month for the amount of taxable oil produced during the calendar year; 14 (7) for oil and gas produced on or after January 1, 2022, an installment 15 payment of the estimated tax levied by AS 43.55.011(e), net of any tax credits applied 16 as allowed by law, is due for each month of the calendar year on the last day of the 17 following month; except as otherwise provided under (10) of this subsection, the 18 amount of the installment payment is the sum of the following amounts, less 1/12 of 19 the tax credits that are allowed by law to be applied against the tax levied by 20 AS 43.55.011(e) for the calendar year, but the amount of the installment payment may 21 not be less than zero: 22 (A) for oil produced from leases or properties subject to 23 AS 43.55.011(f), the greatest of 24 (i) zero; 25 (ii) the percent applicable under AS 43.55.011(f) 26 [ZERO PERCENT, ONE PERCENT, TWO PERCENT, THREE 27 PERCENT, OR FOUR PERCENT, AS APPLICABLE,] of the gross 28 value at the point of production of the oil produced from the leases or 29 properties during the month for which the installment payment is 30 calculated; or 31 (iii) 35 percent multiplied by the remainder obtained by 01 subtracting 1/12 of the producer's adjusted lease expenditures for the 02 calendar year of production under AS 43.55.165 and 43.55.170 that are 03 deductible for the oil under AS 43.55.160(h)(1) from the gross value at 04 the point of production of the oil produced from those leases or 05 properties during the month for which the installment payment is 06 calculated, except that, for the purposes of this calculation, a reduction 07 from the gross value at the point of production may apply for oil 08 subject to AS 43.55.160(f) or 43.55.160(f) and (g); 09 (B) for oil produced before or during the last calendar year 10 under AS 43.55.024(b) for which the producer could take a tax credit under 11 AS 43.55.024(a), from leases or properties in the state outside the Cook Inlet 12 sedimentary basin, no part of which is north of 68 degrees North latitude, other 13 than leases or properties subject to AS 43.55.011(o) or (p), the greater of 14 (i) zero; or 15 (ii) 35 percent multiplied by the remainder obtained by 16 subtracting 1/12 of the producer's adjusted lease expenditures for the 17 calendar year of production under AS 43.55.165 and 43.55.170 that are 18 deductible for the oil under AS 43.55.160(h)(2) from the gross value at 19 the point of production of the oil produced from the leases or properties 20 during the month for which the installment payment is calculated; 21 (C) for oil and gas produced from leases or properties subject 22 to AS 43.55.011(p), except as otherwise provided under (8) of this subsection, 23 the sum of 24 (i) 35 percent multiplied by the remainder obtained by 25 subtracting 1/12 of the producer's adjusted lease expenditures for the 26 calendar year of production under AS 43.55.165 and 43.55.170 that are 27 deductible for the oil under AS 43.55.160(h)(3) from the gross value at 28 the point of production of the oil produced from the leases or properties 29 during the month for which the installment payment is calculated, but 30 not less than zero; and 31 (ii) 13 percent of the gross value at the point of 01 production of the gas produced from the leases or properties during the 02 month, but not less than zero; 03 (D) for oil produced from leases or properties in the state, no 04 part of which is north of 68 degrees North latitude, other than leases or 05 properties subject to (B), (C), or (F) of this paragraph, the greater of 06 (i) zero; or 07 (ii) 35 percent multiplied by the remainder obtained by 08 subtracting 1/12 of the producer's adjusted lease expenditures for the 09 calendar year of production under AS 43.55.165 and 43.55.170 that are 10 deductible for the oil under AS 43.55.160(h)(4) from the gross value at 11 the point of production of the oil produced from the leases or properties 12 during the month for which the installment payment is calculated; 13 (E) for gas produced from each lease or property in the state 14 outside the Cook Inlet sedimentary basin, other than a lease or property subject 15 to AS 43.55.011(o) or (p), 13 percent of the gross value at the point of 16 production of the gas produced from the lease or property during the month for 17 which the installment payment is calculated, but not less than zero; 18 (F) for oil subject to AS 43.55.011(k), for each lease or 19 property, the greater of 20 (i) zero; or 21 (ii) 35 percent multiplied by the remainder obtained by 22 subtracting 1/12 of the producer's adjusted lease expenditures for the 23 calendar year of production under AS 43.55.165 and 43.55.170 that are 24 deductible under AS 43.55.160 for the oil produced from the lease or 25 property from the gross value at the point of production of the oil 26 produced from the lease or property during the month for which the 27 installment payment is calculated; 28 (G) for gas subject to AS 43.55.011(j) or (o), for each lease or 29 property, the greater of 30 (i) zero; or 31 (ii) 13 percent of the gross value at the point of 01 production of the gas produced from the lease or property during the 02 month for which the installment payment is calculated; 03 (8) an amount calculated under (7)(C) of this subsection may not 04 exceed four percent of the gross value at the point of production of the oil and gas 05 produced from leases or properties subject to AS 43.55.011(p) during the month for 06 which the installment payment is calculated; 07 (9) for purposes of the calculation under (1)(B)(ii), (5)(B)(ii), and 08 (7)(A)(ii) of this subsection, the applicable percentage of the gross value at the point 09 of production is determined under AS 43.55.011(f) [AS 43.55.011(f)(1) or (2)] but 10 substituting the phrase "month for which the installment payment is calculated" in 11 AS 43.55.011(f)(1) and (2) for the phrase "calendar year for which the tax is due"; 12 (10) an amount calculated under (7)(F) or (G) of this subsection for oil 13 or gas subject to AS 43.55.011(j), (k), or (o) may not exceed the product obtained by 14 carrying out the calculation set out in AS 43.55.011(j)(1) or (2) or 43.55.011(o), as 15 applicable, for gas, or set out in AS 43.55.011(k) for oil, but substituting in 16 AS 43.55.011(j)(1)(A) or (2)(A) or 43.55.011(o), as applicable, the amount of taxable 17 gas produced during the month for the amount of taxable gas produced during the 18 calendar year and substituting in AS 43.55.011(k) the amount of taxable oil produced 19 during the month for the amount of taxable oil produced during the calendar year. 20  * Sec. 32. AS 43.55.020 is amended by adding a new subsection to read: 21 (n) If oil or gas is produced and sold at no cost or under circumstances in 22 which the sales price does not represent the prevailing value for oil or gas of like kind, 23 quality, or character for the field, unit, or area from which the product is produced, the 24 department shall require tax to be paid based on the value of the oil or gas. To 25 determine the value of the oil or gas for purposes of this subsection, the department 26 (1) shall base the value for oil or gas on the value of oil or gas of the 27 same kind, quality, and character prevailing for that field, unit, or area during the 28 calendar month of production or sale; and 29 (2) may not base a value for oil or gas on oil or gas sold at no cost or at 30 a cost substantially lower than that of other oil or gas of the same kind, quality, and 31 character. 01  * Sec. 33. AS 43.55.023(c) is amended to read: 02 (c) A credit or portion of a credit under this section 03 (1) may not be used to reduce a person's tax liability under 04 AS 43.55.011(e) for any calendar year below zero; 05 (2) may, if not used under this subsection, be applied in a later 06 calendar year; 07 (3) may, regardless of when the credit was earned, be used to satisfy a 08 tax, interest, penalty, fee, or other charge that 09 (A) is related to the tax due under this chapter for a prior year, 10 except for a surcharge under AS 43.55.201 - 43.55.299, [OR] 43.55.300, or  11 43.55.320 or the tax levied by AS 43.55.011(i) or 43.55.014; and 12 (B) has not, for the purpose of art. IX, sec. 17(a), Constitution 13 of the State of Alaska, been subject to an administrative proceeding or 14 litigation. 15  * Sec. 34. AS 43.55.023(e) is amended to read: 16 (e) A person to which a transferable tax credit certificate is issued under (d) of 17 this section may transfer the certificate to another person, and a transferee may further 18 transfer the certificate. Subject to the limitations set out in (a) - (d) of this section, and 19 notwithstanding any action the department may take with respect to the applicant 20 under (g) of this section, the owner of a certificate may apply the credit or a portion of 21 the credit shown on the certificate 22 (1) against a tax levied by AS 43.55.011(e); however, a credit shown 23 on a transferable tax credit certificate may not be applied under this paragraph to 24 reduce a transferee's total tax liability under AS 43.55.011(e) for oil and gas produced 25 during a calendar year to less than 80 percent of the tax that would otherwise be due 26 without applying that credit; any portion of a credit not used under this paragraph may 27 be applied in a later period; or 28 (2) regardless of when the credit was earned, to satisfy a tax, interest, 29 penalty, fee, or other charge that 30 (A) is related to the tax due under this chapter, except for a 31 surcharge under AS 43.55.201 - 43.55.299, [OR] 43.55.300, or 43.55.320 or 01 the tax levied by AS 43.55.011(i) or 43.55.014; 02 (B) is for a calendar year before the year in which the 03 certificate is applied; and 04 (C) has not, for the purpose of art. IX, sec. 17(a), Constitution 05 of the State of Alaska, been subject to an administrative proceeding or 06 litigation. 07  * Sec. 35. AS 43.55.025(h) is amended to read: 08 (h) A producer that purchases a production tax credit certificate may apply the 09 credits against its production tax levied by AS 43.55.011(e). Regardless of the price 10 the producer paid for the certificate, the producer may receive a credit against its 11 production tax liability for the full amount of the credit, but for not more than the 12 amount for which the certificate is issued. A production tax credit or a portion of a 13 production tax credit or a production tax credit certificate or a portion of a production 14 tax credit certificate allowed under this section 15 (1) may not be applied more than once; 16 (2) may be applied in a later calendar year; 17 (3) may, regardless of when the credit was earned, be applied to satisfy 18 a tax, interest, penalty, fee, or other charge that 19 (A) is related to the tax due under this chapter for a prior year, 20 except for a surcharge under AS 43.55.201 - 43.55.299, [OR] 43.55.300, or  21 43.55.320 or the tax levied by AS 43.55.011(i) or 43.55.014; and 22 (B) has not, for the purpose of art. IX, sec. 17(a), Constitution 23 of the State of Alaska, been subject to an administrative proceeding or 24 litigation. 25  * Sec. 36. AS 43.55.165(e) is amended to read: 26 (e) For purposes of this section, lease expenditures do not include 27 (1) depreciation, depletion, or amortization; 28 (2) oil or gas royalty payments, production payments, lease profit 29 shares, or other payments or distributions of a share of oil or gas production, profit, or 30 revenue, except that a producer's lease expenditures applicable to oil and gas produced 31 from a lease issued under AS 38.05.180(f)(3)(B), (D), or (E) include the share of net 01 profit paid to the state under that lease; 02 (3) taxes based on or measured by net income; 03 (4) interest or other financing charges or costs of raising equity or debt 04 capital; 05 (5) acquisition costs for a lease or property or exploration license; 06 (6) costs arising from fraud, wilful misconduct, gross negligence, 07 violation of law, or failure to comply with an obligation under a lease, permit, or 08 license issued by the state or federal government; 09 (7) fines or penalties imposed by law; 10 (8) costs of arbitration, litigation, or other dispute resolution activities 11 that involve the state or concern the rights or obligations among owners of interests in, 12 or rights to production from, one or more leases or properties or a unit; 13 (9) costs incurred in organizing a partnership, joint venture, or other 14 business entity or arrangement; 15 (10) amounts paid to indemnify the state; the exclusion provided by 16 this paragraph does not apply to the costs of obtaining insurance or a surety bond from 17 a third-party insurer or surety; 18 (11) surcharges levied under AS 43.55.201, [OR] 43.55.300, or  19 43.55.320; 20 (12) an expenditure otherwise deductible under (b) of this section that 21 is a result of an internal transfer, a transaction with an affiliate, or a transaction 22 between related parties, or is otherwise not an arm's length transaction, unless the 23 producer establishes to the satisfaction of the department that the amount of the 24 expenditure does not exceed the fair market value of the expenditure; 25 (13) an expenditure incurred to purchase an interest in any corporation, 26 partnership, limited liability company, business trust, or any other business entity, 27 whether or not the transaction is treated as an asset sale for federal income tax 28 purposes; 29 (14) a tax levied under AS 43.55.011 or 43.55.014; 30 (15) costs incurred for dismantlement, removal, surrender, or 31 abandonment of a facility, pipeline, well pad, platform, or other structure, or for the 01 restoration of a lease, field, unit, area, tract of land, body of water, or right-of-way in 02 conjunction with dismantlement, removal, surrender, or abandonment; a cost is not 03 excluded under this paragraph if the dismantlement, removal, surrender, or 04 abandonment for which the cost is incurred is undertaken for the purpose of replacing, 05 renovating, or improving the facility, pipeline, well pad, platform, or other structure; 06 (16) costs incurred for containment, control, cleanup, or removal in 07 connection with any unpermitted release of oil or a hazardous substance and any 08 liability for damages imposed on the producer or explorer for that unpermitted release; 09 this paragraph does not apply to the cost of developing and maintaining an oil 10 discharge prevention and contingency plan under AS 46.04.030; 11 (17) costs incurred to satisfy a work commitment under an exploration 12 license under AS 38.05.132; 13 (18) that portion of expenditures, that would otherwise be qualified 14 capital expenditures, as defined in AS 43.55.023, incurred during a calendar year that 15 are less than the product of $0.30 multiplied by the total taxable production from each 16 lease or property, in BTU equivalent barrels, during that calendar year, except that, 17 when a portion of a calendar year is subject to this provision, the expenditures and 18 volumes shall be prorated within that calendar year; 19 (19) costs incurred for repair, replacement, or deferred maintenance of 20 a facility, a pipeline, a structure, or equipment, other than a well, that results in or is 21 undertaken in response to a failure, problem, or event that results in an unscheduled 22 interruption of, or reduction in the rate of, oil or gas production; or costs incurred for 23 repair, replacement, or deferred maintenance of a facility, a pipeline, a structure, or 24 equipment, other than a well, that is undertaken in response to, or is otherwise 25 associated with, an unpermitted release of a hazardous substance or of gas; however, 26 costs under this paragraph that would otherwise constitute lease expenditures under (a) 27 and (b) of this section may be treated as lease expenditures if the department 28 determines that the repair or replacement is solely necessitated by an act of war, by an 29 unanticipated grave natural disaster or other natural phenomenon of an exceptional, 30 inevitable, and irresistible character, the effects of which could not have been 31 prevented or avoided by the exercise of due care or foresight, or by an intentional or 01 negligent act or omission of a third party, other than a party or its agents in privity of 02 contract with, or employed by, the producer or an operator acting for the producer, but 03 only if the producer or operator, as applicable, exercised due care in operating and 04 maintaining the facility, pipeline, structure, or equipment, and took reasonable 05 precautions against the act or omission of the third party and against the consequences 06 of the act or omission; in this paragraph, 07 (A) "costs incurred for repair, replacement, or deferred 08 maintenance of a facility, a pipeline, a structure, or equipment" includes costs 09 to dismantle and remove the facility, pipeline, structure, or equipment that is 10 being replaced; 11 (B) "hazardous substance" has the meaning given in 12 AS 46.03.826; 13 (C) "replacement" includes renovation or improvement; 14 (20) costs incurred to construct, acquire, or operate a refinery or crude 15 oil topping plant, regardless of whether the products of the refinery or topping plant 16 are used in oil or gas exploration, development, or production operations; however, if 17 a producer owns a refinery or crude oil topping plant that is located on or near the 18 premises of the producer's lease or property in the state and that processes the 19 producer's oil produced from that lease or property into a product that the producer 20 uses in the operation of the lease or property in drilling for or producing oil or gas, the 21 producer's lease expenditures include the amount calculated by subtracting from the 22 fair market value of the product used the prevailing value, as determined under 23 AS 43.55.020(f), of the oil that is processed; 24 (21) costs of lobbying, public relations, public relations advertising, or 25 policy advocacy; 26 (22) costs incurred as part of a capital expenditure or other action taken 27 for a carbon management purpose under AS 38.05.081 or a carbon offset project under 28 AS 38.95.400 - 38.95.499; 29 (23) costs incurred for carbon capture or carbon storage, including fees 30 incurred under AS 41.06.160, surcharges incurred under AS 41.06.175, or costs 31 associated with obtaining, operating, or maintaining a license or lease under 01 AS 38.05.700 - 38.05.795; in this paragraph, 02 (A) "carbon capture" means the process of capturing carbon 03 dioxide from a chemical, mechanical, or industrial process, or directly from the 04 ambient atmosphere, and reducing the carbon dioxide to a concentrated form, 05 including a supercritical fluid; "carbon capture" does not include gas 06 processing or gas treatment; 07 (B) "carbon storage" means the long-term geologic storage of 08 carbon dioxide in a carbon storage facility permitted under AS 41.06.120 or a 09 Class VI injection well, as defined in 40 C.F.R. 146.5(f). 10  * Sec. 37. AS 43.55.201(b) is amended to read: 11 (b) The surcharge imposed by (a) of this section is in addition to the tax 12 imposed by AS 43.55.011 and is due on the last day of the month on oil produced 13 from each lease or property during the preceding month. The surcharge is in addition 14 to the surcharge imposed by AS 43.55.300 - 43.55.310 and 43.55.320. 15  * Sec. 38. AS 43.55 is amended by adding new sections to article 3 to read: 16 Sec. 43.55.320. Infrastructure maintenance surcharge on oil. (a) Every 17 producer of oil shall pay a surcharge of $0.30 per barrel of oil produced from each 18 lease or property in the state, less any oil the ownership or right to which is exempt 19 from taxation. 20 (b) The surcharge imposed by (a) of this section is in addition to the tax 21 imposed by AS 43.55.011 and the surcharges imposed by AS 43.55.201 and 22 43.55.300. 23 (c) A tax credit authorized under this chapter may not be applied to reduce a 24 producer's liability for the surcharge. 25 (d) The surcharge is due on the last day of the month on oil produced from 26 each lease or property during the preceding month. The surcharge shall be paid at the 27 same time and in the same manner as the surcharge imposed under AS 43.55.201. 28 Sec. 43.55.325. Dalton Highway pipeline corridor maintenance fund. (a) 29 The Dalton Highway pipeline corridor maintenance fund is established in the general 30 fund. 31 (b) The legislature may appropriate to the fund the revenue collected under 01 AS 43.55.320 and other money. 02 (c) Money in the fund may be used by the legislature to make appropriations 03 for maintenance and operation costs of the James Dalton Highway (AS 19.40) and 04 within the James Dalton Highway corridor. 05 (d) Nothing in this section creates a dedicated fund. 06  * Sec. 39. AS 43.55.900(24) is amended to read: 07 (24) "surcharge" means 08 (A) when used in AS 43.55.201 - 43.55.299, the surcharge 09 levied by AS 43.55.201; 10 (B) when used in AS 43.55.300 - 43.55.310, the surcharge 11 levied by AS 43.55.300;  12 (C) when used in AS 43.55.320 - 43.55.325, the surcharge  13 levied by AS 43.55.320; 14  * Sec. 40. AS 43.56.020(b) is amended to read: 15 (b) There is exempt from state taxes levied or authorized under 16 AS 43.56.010(a), 17 (1) before the construction commencement date, property that is 18 committed by contract or other agreement for use in this state primarily for the 19 production or pipeline transportation of gas or unrefined oil, or in the operation or 20 maintenance of facilities for the production or pipeline transportation of gas or 21 unrefined oil; and 22 (2) a spur line that services a Fairbanks natural gas utility. 23  * Sec. 41. AS 43.56.020(d) is amended to read: 24 (d) Real or personal property used or committed by contract or other  25 agreement for the construction, operation, or maintenance [TAXABLE 26 PROPERTY] of a natural gas pipeline project [OWNED OR FINANCED BY THE 27 ALASKA GASLINE DEVELOPMENT CORPORATION OR A JOINT VENTURE, 28 PARTNERSHIP, OR OTHER ENTITY THAT INCLUDES THE ALASKA 29 GASLINE DEVELOPMENT CORPORATION] is exempt from state taxes levied or 30 authorized under AS 43.56.010(a) and municipal taxes levied or authorized under 31 AS 43.56.010(b) [BEFORE THE COMMENCEMENT OF COMMERCIAL 01 OPERATIONS OF THAT NATURAL GAS PIPELINE PROJECT]. In this 02 subsection, "natural gas pipeline project" means a natural gas pipeline project  03 subject to, or expected by the department to be subject to, the tax under  04 AS 43.59.010 ["COMMENCEMENT OF COMMERCIAL OPERATIONS" MEANS 05 THE FIRST FLOW OF NATURAL GAS IN THE PROJECT THAT GENERATES 06 REVENUE TO THE OWNERS OF THE NATURAL GAS PIPELINE PROJECT]. 07  * Sec. 42. AS 43.56.020(d), as amended by sec. 41 of this Act, is amended to read: 08 (d) Taxable property [REAL OR PERSONAL PROPERTY USED OR 09 COMMITTED BY CONTRACT OR OTHER AGREEMENT FOR THE 10 CONSTRUCTION, OPERATION, OR MAINTENANCE] of a natural gas pipeline 11 project owned or financed by the Alaska Gasline Development Corporation or a  12 joint venture, partnership, or other entity that includes the Alaska Gasline  13 Development Corporation is exempt from state taxes levied or authorized under 14 AS 43.56.010(a) and municipal taxes levied or authorized under AS 43.56.010(b) 15 before the commencement of commercial operations of that natural gas pipeline  16 project. In this subsection, "commencement of commercial operations" means the  17 first flow of natural gas in the project that generates revenue to the owners of the  18 natural gas pipeline project ["NATURAL GAS PIPELINE PROJECT" MEANS A 19 NATURAL GAS PIPELINE PROJECT SUBJECT TO, OR EXPECTED BY THE 20 DEPARTMENT TO BE SUBJECT TO, THE TAX UNDER AS 43.59.010]. 21  * Sec. 43. AS 43.56.030 is amended to read: 22 Sec. 43.56.030. In place of other taxes. Except for those taxes imposed under 23 AS 43.55, the taxes levied or authorized under AS 43.56.010(b) are in place of 24 (1) all other ad valorem taxes or other taxes imposed by a municipality 25 on property subject to tax under this chapter or exempted from taxation by 26 AS 43.56.020; and 27 (2) all other taxes imposed by a municipality on or with respect to the 28 property subject to tax under this chapter or exempted from taxation by AS 43.56.020, 29 including [, BUT NOT LIMITED TO,] 30 (A) taxes on the retail sale or use of the property except for the 31 retail sales tax on the first $1,000 of each sale; 01 (B) taxes on the sale or use of gas, including liquefied natural  02 gas, or unrefined oil; 03 (C) taxes on the sale or use of services used in or associated 04 with the property or in its maintenance or operation except for the sales tax on 05 the first $1,000 of each sale; 06 (D) taxes on or measured by gross or net income from the 07 property, including income from 08 (i) the exploration for, production of, or pipeline 09 transportation of gas or unrefined oil or property; or  10 (ii) a liquefied natural gas plant; and 11 (E) any license, excise, fee, charge or other tax on or pertaining 12 to the property or services. 13  * Sec. 44. AS 43.56.060(a) is amended to read: 14 (a) The department shall assess, at its full and true value as of January 1 of  15 the assessment year, property for the tax levied under AS 43.56.010(b) and 16 AS 29.45.080 on property used or committed by contract or other agreement for use 17 (1) for the pipeline transportation of gas or unrefined oil or for the 18 production of gas or unrefined oil;  19 (2) as part of or related to a liquefied natural gas plant [AT ITS 20 FULL AND TRUE VALUE AS OF JANUARY 1 OF THE ASSESSMENT YEAR]. 21  * Sec. 45. AS 43.56.210(5) is amended to read: 22 (5) "taxable property" 23 (A) means real and tangible personal property used or 24 committed by contract or other agreement for use within this state primarily in 25 the exploration for, production of, or pipeline transportation of gas or unrefined 26 oil (except for property used solely for the retail distribution or liquefaction of 27 natural gas), or in the operation or maintenance of facilities used in the 28 exploration for, production of, or pipeline transportation of gas or unrefined 29 oil; "taxable property" includes 30 (i) machinery, appliances, supplies, and equipment; 31 (ii) drilling rigs, wells (whether producing or not), 01 gathering lines and transmission lines, pumping stations, compressor 02 stations, power plants, topping plants, and processing units; 03 (iii) roads, tank farms, tanker terminals, docks and other 04 port facilities, and air strips; 05 (iv) aircraft and motor vehicles owned by a person 06 whose principal business in the state is the exploration for, production 07 of, or pipeline transportation of gas or unrefined oil and whose 08 operation of the aircraft or motor vehicle directly relates to the conduct 09 of that business; 10 (v) maintenance equipment and facilities, and 11 maintenance camps and other related facilities; [AND] 12 (vi) communications facilities owned by a person 13 whose principal business in the state is the exploration for, production 14 of, or pipeline transportation of gas or unrefined oil and whose 15 operation of the communications facilities directly relates to the 16 conduct of that business; and  17 (vii) a marine export terminal;  18 (B) means a liquefied natural gas plant;  19 (C) does not include 20 (i) permanent residences; 21 (ii) office buildings requiring substantial local 22 government services; 23 (iii) oil and gas pipeline systems owned and operated by 24 a public utility that is certificated under AS 42.05.221 and is regulated 25 by the Regulatory Commission of Alaska; 26 (iv) aircraft and motor vehicles, except aircraft and 27 motor vehicles taxable under (A)(iv) of this paragraph; and 28 (v) communications facilities, except communications 29 facilities taxable under (A)(vi) of this paragraph; 30  * Sec. 46. AS 43.56.210 is amended by adding new paragraphs to read: 31 (7) "liquefied natural gas plant" means a facility for liquefying natural 01 gas and includes structures, equipment, underlying land rights, other associated 02 systems, storage, and facilities for off-loading liquefied natural gas; 03 (8) "marine export terminal" means 04 (A) a terminal and related facilities required to export gas or 05 unrefined oil by marine transportation; and 06 (B) auxiliary vessels used in the operation of the terminal. 07  * Sec. 47. AS 43 is amended by adding a new chapter to read: 08 Chapter 59. Pipeline Alternative Volumetric Tax. 09 Sec. 43.59.010. Alternative volumetric tax. (a) The owner of a qualified 10 property shall pay an alternative volumetric tax on the throughput of the qualified 11 property. Subject to AS 43.59.015, the alternative volumetric tax applies beginning the 12 day after the commencement of commercial operations of the qualified property. If a 13 qualified property has multiple owners, each owner shall pay the tax in proportion to 14 ownership. 15 (b) The volumetric tax for each 1,000 cubic feet of natural gas 16 (1) transported through a gas treatment plant or carbon capture facility 17 is 18 (A) $0.06 before the date that throughput of natural gas 19 transported through the gas treatment plant or carbon capture facility first 20 exceeds 250,000,000 cubic feet of natural gas a day; 21 (B) $0.10 on and after the date that throughput of natural gas 22 transported through the gas treatment plant or carbon capture facility first 23 exceeds 250,000,000 cubic feet of natural gas a day; 24 (2) transported through a gas pipeline is 25 (A) $0.06 on and after the date the gas pipeline commences 26 commercial operations but before throughput of natural gas transported 27 through the gas pipeline first exceeds 250,000,000 cubic feet of natural gas a 28 day; 29 (B) $0.15 on and after the date that throughput of natural gas 30 transported through the gas pipeline first exceeds 250,000,000 cubic feet of 31 natural gas a day; 01 (3) processed by a liquefied natural gas plant is $0.15 on and after the 02 date the liquefied natural gas plant commences commercial operations. 03 (c) The department shall adjust each tax rate under (b) of this section for 04 inflation, based on the percentage increase during the previous calendar year in the 05 Consumer Price Index for all urban consumers for urban Alaska, as determined by the 06 United States Department of Labor, Bureau of Labor Statistics. The department shall 07 adjust the tax rate 08 (1) under (b)(1)(A) of this section beginning January 1 following five 09 full calendar years of application of the tax under (b)(1)(A) of this section; 10 (2) under (b)(1)(B) of this section beginning January 1 following the 11 first full calendar year of application of the tax under (b)(1)(B) of this section; 12 (3) under (b)(2)(A) of this section beginning January 1 following the 13 first full five calendar years after the gas pipeline commences commercial operations; 14 (4) under (b)(2)(B) of this section beginning January 1 following the 15 first full calendar year of application of the tax under (b)(2)(B) of this section; 16 (5) under (b)(3) of this section beginning January 1 following the first 17 full calendar year after the liquefied natural gas plant commences commercial 18 operations. 19 (d) For purposes of determining throughput as required to assess the tax rate 20 under (b) of this section, the department shall calculate throughput as a rolling average 21 over a consecutive 30-day period. 22 (e) The tax levied under this section is in place of all property taxes levied on 23 qualified property, including taxes levied under AS 43.56.010 and AS 29.45.080. 24 (f) The Alaska Gasline Development Corporation (AS 31.25), or a subsidiary 25 of the corporation, shall pay the tax levied under this section. 26 (g) The alternative tax under this section does not apply to a spur line. Except 27 as provided in AS 43.56.020(b)(2), property associated with a spur line remains 28 subject to taxation under AS 43.56.010. In this subsection, "spur line" means a natural 29 gas transmission line or lateral line 30 (1) that branches from the main natural gas pipeline project to deliver 31 natural gas to a local community or utility distribution system; or 01 (2) described in AS 31.25.005(4), or similar infrastructure not serving 02 as the primary export or mainline transmission facility. 03 Sec. 43.59.015. Additional payment; application of alternative volumetric  04 tax. (a) The owner of qualified property shall 05 (1) make a payment of at least $50,000,000, as described in 06 AS 44.33.850(b), to the state during the calendar year in which construction of a gas 07 pipeline commences; for purposes of this paragraph, construction of a gasline 08 commences when 09 (A) multiple sections of steel pipe that are intended for use as 10 part of a gas pipeline are laying and welding together in an excavated trench; 11 and 12 (B) at least one work camp has been established along the gas 13 pipeline route that is intended to provide crew quarters and services during 14 construction of the gas pipeline; 15 (2) for each of the five calendar years after the payment made under 16 (1) of this subsection, make a payment of at least $30,000,000, as described in 17 AS 44.33.850(c), to the state. 18 (b) The tax under AS 43.59.010 is suspended for the calendar year 19 immediately after a calendar year in which an owner of qualified property does not 20 make a payment required under (a)(2) of this section. If the tax under AS 43.59.010 is 21 suspended under this subsection, an owner of qualified property shall pay all other 22 property taxes levied on the qualified property, including taxes levied under 23 AS 43.56.010 and AS 29.45.080. 24 (c) Except as provided in (b) of this section, there is not a penalty or other 25 consequence for failing to make a payment under this section. 26 Sec. 43.59.020. Returns; payment of tax and fee. (a) Every person having 27 direct ownership or control of an interest in qualified property subject to tax under 28 AS 43.59.010 shall file a return with the department on or before the last day of each 29 month. The return must state the throughput, in cubic feet of natural gas a day, of the 30 qualified property for the month preceding the month in which the return is due. The 31 owner of the qualified property shall, at the time the return is filed, pay the tax due 01 under AS 43.59.010 for the month preceding the return. A payment under this 02 subsection is considered late if the payment is not received by the department on or 03 before the last day of the month in which the return is due. 04 (b) If payment of the tax levied under AS 43.59.010 is delinquent, the 05 department shall assess a penalty of 10 percent of the amount of delinquent taxes and 06 interest on the delinquent taxes, exclusive of penalty, at the rate specified in 07 AS 43.05.225. 08 Sec. 43.59.030. Remedy. The remedy of distraint of property set out in 09 AS 43.20.270 applies to the tax levied under AS 43.59.010. However, only the 10 qualified property may be distrained. 11 Sec. 43.59.040. Allocation of volumetric tax. The department shall separately 12 account for the tax collected under AS 43.59.010(b)(1), (2), and (3). Each year, the 13 legislature may appropriate 14 (1) to the North Slope Borough, 50 percent of the tax collected on the 15 throughput of a gas treatment plant or carbon capture facility under 16 AS 43.59.010(b)(1); 17 (2) 50 percent of the tax collected on pipeline throughput under 18 AS 43.59.010(b)(2) to affected areas of the state, with appropriations proportionately 19 divided among the municipalities and the unorganized borough through which the gas 20 pipeline runs; to determine the proportional distribution under this paragraph, the 21 length of pipeline in a municipality is divided by the total length of the pipeline; the 22 state shall retain the portions of the tax for the proportion of the pipeline in the 23 unorganized borough; 24 (3) 50 percent of the tax collected on pipeline throughput under 25 AS 43.59.010(b)(2) to municipalities, to reserves, and to communities in the 26 unorganized borough, distributed on a per capita basis under AS 29.60.860; 27 (4) to the Kenai Peninsula Borough, 50 percent of the tax collected on 28 the throughput of a liquefied natural gas plant under AS 43.59.010(b)(3). 29 Sec. 43.59.050. Throughput; regulations. The department shall adopt 30 regulations under AS 44.62 (Administrative Procedure Act) to implement this chapter, 31 including procedures for measuring throughput, throughput reporting, and calculating 01 the rolling average of throughput. For purposes of measuring throughput in regulations 02 adopted under this section, natural gas 03 (1) sold or otherwise delivered at an outlet or offtake point along the 04 gas pipeline is included in throughput; 05 (2) consumed as fuel for the operation of a liquefaction facility, 06 including fuel consumed for refrigeration, is not included in throughput when 07 calculating the tax for natural gas processed by a liquefied natural gas plant under 08 AS 43.59.010(b)(3); 09 (3) consumed as fuel for pipeline compression is not included in 10 throughput. 11 Sec. 43.59.100. Definitions. In this chapter, 12 (1) "commencement of commercial operations" means the first flow of 13 natural gas in the qualified property that generates revenue to the owners of the 14 qualified property; 15 (2) "department" means the Department of Revenue; 16 (3) "gas pipeline" has the meaning given in AS 31.25.390; 17 (4) "gas treatment plant" has the meaning given in AS 31.25.390; 18 (5) "liquefied natural gas plant" has the meaning given in 19 AS 31.25.390; 20 (6) "qualified property" means a major component of an Alaska 21 liquefied natural gas project as defined in AS 31.25.390, taxed under AS 43.59.010(b) 22 (A) for which construction commenced on or after January 1, 23 2026; and 24 (B) that is owned by an instrumentality of the state or a joint 25 venture, partnership, or other affiliated entity that includes an instrumentality 26 of the state. 27  * Sec. 48. AS 44.33 is amended by adding a new section to read: 28 Article 13A. Alaska Gasline Community Impact Fund.  29 Sec. 44.33.850. Alaska gasline community impact fund. (a) The Alaska 30 gasline community impact fund is established as a separate fund in the state treasury. 31 The fund consists of money appropriated to the fund. The department shall administer 01 the fund for the purposes set out in this section. Money in the fund does not lapse. 02 Nothing in this section creates a dedicated fund. 03 (b) The gasline construction impact account is created as a separate account in 04 the fund. The account consists of money appropriated to the account. Upon the state's 05 receipt of a one-time payment intended to offset the effects of construction of a gas 06 pipeline from an entity that has partnered with the Alaska Gasline Development 07 Corporation (AS 31.25), the legislature may appropriate $50,000,000 of the payment 08 to the account. The department shall timely distribute grants from the account to 09 communities for activities, services, or facilities that offset actual or expected effects 10 of construction of a gas pipeline. When administering grants from the account, the 11 department shall prioritize granting awards based on the needs of the community, the 12 severity of the effects caused by construction of the pipeline, and the correlation of the 13 effect to the construction of the pipeline. 14 (c) The statewide gasline impact account is created as a separate account in 15 the fund. The account consists of money appropriated to the account. Each year, the 16 legislature may appropriate to the account up to $30,000,000 of revenue or receipts 17 received by the state as a result of construction of a gas pipeline or from an entity that 18 has partnered with the Alaska Gasline Development Corporation (AS 31.25). Each 19 year, the department shall distribute the money in the account to eligible 20 municipalities, to reserves, and to communities on a per capita basis in accordance 21 with AS 29.60.860. 22 (d) The department shall submit an annual report of fund activity to the senate 23 secretary and the chief clerk of the house of representatives on or before the first day 24 of each regular session of the legislature and shall notify the legislature that the report 25 is available. The report must contain 26 (1) a summary of the grants provided from the gasline construction 27 impact account established under (b) of this section, including 28 (A) the name of each grantee for the preceding calendar year; 29 (B) a summary of projects funded in the preceding calendar 30 year and an explanation of how the project offset an actual or expected effect 31 of the construction of a gas pipeline; 01 (C) a determination of whether the grants provided in the 02 preceding calendar year offset the entire expected effect of the construction of 03 a gas pipeline, as described in the grant request for that project; 04 (D) a list of outstanding grant applications; 05 (E) a list of all grant payments, beginning on inception of the 06 grant program; 07 (2) a list of all communities that, in the preceding calendar year, 08 received funds distributed from the statewide gasline impact account established under 09 (c) of this section. 10 (e) In this section, 11 (1) "department" means the Department of Commerce, Community, 12 and Economic Development; 13 (2) "fund" means the Alaska gasline community impact fund 14 established under (a) of this section; 15 (3) "gas pipeline" has the meaning given in AS 31.25.390. 16  * Sec. 49. AS 31.25.030(d) and AS 42.05.711(v) are repealed. 17  * Sec. 50. AS 14.17.510(d); AS 29.45.050(aa), 29.45.080(g); AS 29.60.860(e); 18 AS 43.56.020(b)(2); AS 43.59.010, 43.59.020, 43.59.030, 43.59.040, 43.59.050, and 19 43.59.100 are repealed. 20  * Sec. 51. AS 44.33.850 is repealed. 21  * Sec. 52. AS 44.33.850(b) is repealed. 22  * Sec. 53. AS 29.60.860(d) and AS 44.33.850(c) are repealed. 23  * Sec. 54. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 APPROPRIATIONS TO THE ALASKA GASLINE COMMUNITY IMPACT FUND 26 AND THE STATEWIDE GASLINE IMPACT ACCOUNT. (a) The legislature may 27 appropriate to the gasline construction impact account established under AS 44.33.850(b), 28 added by sec. 48 of this Act, $50,000,000 of revenue or receipts received by the state as a 29 result of the construction of a gas pipeline or from an entity that has partnered with the Alaska 30 Gasline Development Corporation (AS 31.25). 31 (b) The legislature may appropriate to the statewide gasline impact account 01 established under AS 44.33.850(c), added by sec. 48 of this Act, revenue or receipts for five 02 consecutive fiscal years, beginning the fiscal year after the legislature appropriates 03 $50,000,000 to the gasline construction impact account, as described (a) of this section.  04  * Sec. 55. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 APPLICABILITY: ALASKA GASLINE DEVELOPMENT CORPORATION 07 CONFIDENTIALITY AGREEMENTS, SUBSIDIARIES, NOTIFICATIONS, LEGAL 08 RELATIONSHIPS. (a) AS 31.25.080(a)(1), (6), and (24), as amended by sec. 12 of this Act, 09 apply to a transfer or disposition occurring on or after the effective date of sec. 12 of this Act. 10 (b) AS 31.25.090(k) and (m), added by sec. 15 of this Act, apply to a confidentiality 11 agreement entered into on or after the effective date of sec. 15 of this Act. 12 (c) AS 31.25.145, added by sec. 19 of this Act, applies to revenue generated on and 13 after the effective date of sec. 19 of this Act. 14 (d) AS 31.25.280, added by sec. 23 of this Act, applies to a legal relationship with a 15 foreign entity entered into on or after the effective date of sec. 23 of this Act. In this 16 subsection, "legal relationship" has the meaning given in AS 31.25.280(c), added by sec. 23 17 of this Act. 18 (e) AS 31.25.285, added by sec. 23 of this Act, applies to a legal relationship entered 19 into on or after the effective date of sec. 23 of this Act. In this subsection, "legal relationship" 20 has the meaning given in AS 31.25.285(b), added by sec. 23 of this Act. 21  * Sec. 56. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 APPLICABILITY: OIL AND GAS ENTITY TAX. The tax established under 24 AS 43.20.019, added by sec. 27 of this Act, applies to a qualified entity for a tax year 25 beginning on or after January 1, 2026. In this section, "qualified entity" has the meaning given 26 in AS 43.20.019(g), added by sec. 27 of this Act. 27  * Sec. 57. The uncodified law of the State of Alaska is amended by adding a new section to 28 read: 29 APPLICABILITY: OIL AND GAS VALUATION. AS 43.55.020(n), added by sec. 30 32 of this Act, applies to oil and gas produced on and after the effective date of sec. 32 of this 31 Act. 01  * Sec. 58. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 APPLICABILITY: OIL AND GAS PROPERTY TAX ON LIQUEFIED NATURAL 04 GAS PLANTS. Notwithstanding AS 43.56.030, as amended by sec. 43 of this Act, 05 AS 43.56.060(a), as amended by sec. 44 of this Act, AS 43.56.210(5), as amended by sec. 45 06 of this Act, and AS 43.56.210(7), added by sec. 46 of this Act, a liquefied natural gas plant 07 existing on January 1, 2026, shall pay property taxes under AS 43.56.030, 43.56.060, and 08 43.56.210, as those sections read on January 1, 2026, until January 1, 2030. In this section, 09 "liquefied natural gas plant" means a facility for liquefying natural gas and includes 10 structures, equipment, underlying land rights, other associated systems, storage, and facilities 11 for off-loading liquefied natural gas. 12  * Sec. 59. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 TRANSITION: EXISTING OPTIONS. (a) Within 30 days after the effective date of 15 sec. 17 of this Act, the Alaska Gasline Development Corporation shall notify the president of 16 the senate, the speaker of the house of representatives, and the chairs of the finance committee 17 of each house of the legislature of any existing options to invest in a revenue-generating 18 project, as required under AS 31.25.125, added by sec. 17 of this Act. 19 (b) An option for state participation in a revenue-generating project negotiated by the 20 Alaska Gasline Development Corporation agreed to before the effective date of AS 31.25.125, 21 added by sec. 17 of this Act, must allow the state to exercise the option for at least 12 months 22 after the corporation notifies the legislature under AS 31.25.125, added by sec. 17 of this Act. 23  * Sec. 60. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 TRANSITION: PAYMENT OF TAX. A person subject to the tax levied under 26 AS 43.20.019, added by sec. 27 of this Act, before the effective date of sec. 27 of this Act, 27 shall pay the balance of the tax due for a tax year ending before January 1, 2027, by 28 January 1, 2027. Until January 1, 2027, the Department of Revenue shall waive interest that 29 would otherwise accrue under AS 43.05.225 and civil and criminal penalties accruing under 30 AS 43.05.220, 43.05.245, and 43.05.290, that are a result of the retroactivity of secs. 27 - 29 31 of this Act. 01  * Sec. 61. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 ACCOUNT SUNSET; NOTIFICATION. (a) After the first appropriation to the 04 gasline construction impact account established under AS 44.33.850(b), added by sec. 48 of 05 this Act, is deposited in the account, the commissioner of commerce, community, and 06 economic development shall notify the revisor of statutes when the balance of the account is 07 zero. 08 (b) After the first appropriation to the statewide gasline impact account established 09 under AS 44.33.850(c), added by sec. 48 of this Act, is deposited in the account, the 10 commissioner of commerce, community, and economic development shall notify the revisor 11 of statutes when the balance of the account is zero.  12  * Sec. 62. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 RETROACTIVITY OF REGULATIONS. Notwithstanding a contrary provision of 15 AS 44.62.240, if the Department of Revenue expressly designates in a regulation that the 16 regulation applies retroactively to a specific date, a regulation adopted by the Department of 17 Revenue to implement, interpret, make specific, or otherwise carry out secs. 27 - 29 of this 18 Act applies retroactively to that date. 19  * Sec. 63. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 RETROACTIVITY. Sections 27 - 29, 56, and 60 of this Act are retroactive to 22 January 1, 2026. 23  * Sec. 64. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 CONDITIONAL EFFECT: PIPELINE VOLUME TAX; NOTIFICATION. (a) 26 Sections 2 - 4, 6, 8, 21, 40, 41, and 47 of this Act only take effect if, on or before January 1, 27 2038, the state receives a one-time payment of at least $50,000,000, as described in 28 AS 44.33.850(b), added by sec. 48 of this Act, intended to offset the effects of construction of 29 a gas pipeline, from an entity that has partnered with the Alaska Gasline Development 30 Corporation (AS 31.25). 31 (b) The commissioner of revenue shall, on or before January 1, 2038, notify the 01 revisor of statutes whether the state has received the one-time payment described under (a) of 02 this section. 03  * Sec. 65. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 CONDITIONAL EFFECT: NATURAL GAS PROJECTS; NOTIFICATION. (a) 06 Sections 5, 22, 42, and 50 of this Act take effect only if secs. 2 - 4, 6, 8, 21, 40, 41, and 47 of 07 this Act take effect under sec. 64 of this Act and, 08 (1) by January 1, 2028, construction of a natural gas pipeline has not begun; 09 (2) by January 1, 2032, at least one major component of the Alaska liquefied 10 natural gas project, as defined in AS 31.25.390, has not been completed; or 11 (3) 10 years after commencement of commercial operation of a liquefied 12 natural gas plant, neither contingency under (1) or (2) of this subsection has occurred. 13 (b) The commissioner of revenue shall, 14 (1) on or before January 1, 2028, notify the revisor of statutes whether 15 construction of a natural gas pipeline has not begun; 16 (2) on or before January 1, 2032, notify the revisor of statutes whether at least 17 one major component of the Alaska liquefied natural gas project has not been completed; and 18 (3) notify the revisor of statutes when 10 years have elapsed since 19 commencement of commercial operation of a liquefied natural gas plant. 20 (c) In this section, 21 (1) "construction of a natural gas pipeline" means 22 (A) laying and welding together in an excavated trench multiple 23 sections of steel pipe that are intended for use as part of a gas pipeline; and 24 (B) establishment of at least one work camp along the gas pipeline 25 route that is intended to provide crew quarters and services during construction of the 26 gas pipeline; 27 (2) "gas pipeline" has the meaning given in AS 31.25.390; 28 (3) "liquefied natural gas plant" has the meaning given in AS 31.25.390; 29 (4) "qualified property" has the meaning given in AS 43.59.100, added by sec. 30 47 of this Act. 31  * Sec. 66. If secs. 2 - 4, 6, 8, 21, 40, 41, and 47 of this Act take effect under sec. 64(a) of 01 this Act, they take effect the day after the one-time payment described in sec. 64(a) of this Act 02 is received by the state. 03  * Sec. 67. If secs. 5, 22, 42, and 50 of this Act take effect under sec. 65(a)(1) of this Act, 04 they take effect January 1, 2028. 05  * Sec. 68. If secs. 5, 22, 42, and 50 of this Act take effect under sec. 65(a)(2) of this Act, 06 they take effect January 1, 2032. 07  * Sec. 69. If secs. 5, 22, 42, and 50 of this Act take effect under sec. 65(a)(3) of this Act, 08 they take effect on the earlier of 09 (1) 10 years after commencement of commercial operation of a liquefied 10 natural gas plant; or 11 (2) January 1, 2050. 12  * Sec. 70. Sections 30 and 31 of this Act take effect January 1, 2027. 13  * Sec. 71. Sections 33 - 39 of this Act take effect July 1, 2026. 14  * Sec. 72. Section 52 of this Act takes effect on the earlier of 15 (1) the day after the balance of the gasline construction impact account 16 established under AS 44.33.850(b), added by sec. 48 of this Act, is zero; or 17 (2) January 1, 2038. 18  * Sec. 73. Section 53 of this Act takes effect on the earlier of 19 (1) the day after the balance of the statewide gasline impact account 20 established under AS 44.33.850(c), added by sec. 48 of this Act, is zero; or 21 (2) January 1, 2044. 22  * Sec. 74. Section 51 of this Act takes effect one year after the later of 23 (1) the repeal of AS 44.33.850(b) under secs. 52 and 72 of this Act; or 24 (2) the repeal of AS 44.33.850(c) under secs. 53 and 73 of this Act. 25  * Sec. 75. Except as provided in secs. 66 - 74 of this Act, this Act takes effect immediately 26 under AS 01.10.070(c).