CSHB 341(JUD): "An Act relating to administrative adjudication and judicial appeals and to the informal resolution of certain factual disputes between taxpayers and the Department of Revenue; establishing the office of tax appeals as a quasi-judicial agency in the Department of Administration; revising the procedures for hearing certain tax appeals, including appeals regarding seafood marketing assessments; relating to consideration and determination by the superior court of disputes involving certain taxes and penalties due, and amending provisions relating to the assessment, levy, and collection of taxes and penalties by the state and to the tax liability of taxpayers; providing for the release of agency records relating to formal administrative tax appeals; relating to litigation disclosure of public records; clarifying administrative subpoena power in certain tax matters; and providing for an effective date."
00CS FOR HOUSE BILL NO. 341(JUD) 01 "An Act relating to administrative adjudication and judicial appeals and to the 02 informal resolution of certain factual disputes between taxpayers and the 03 Department of Revenue; establishing the office of tax appeals as a quasi-judicial 04 agency in the Department of Administration; revising the procedures for hearing 05 certain tax appeals, including appeals regarding seafood marketing assessments; 06 relating to consideration and determination by the superior court of disputes 07 involving certain taxes and penalties due, and amending provisions relating to the 08 assessment, levy, and collection of taxes and penalties by the state and to the tax 09 liability of taxpayers; providing for the release of agency records relating to 10 formal administrative tax appeals; relating to litigation disclosure of public records; 11 clarifying administrative subpoena power in certain tax matters; and providing for 12 an effective date." 13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 14 * Section 1. AS 43.05 is amended by adding new sections to read:
01 ARTICLE 4. OFFICE OF TAX APPEALS. 02 Sec. 43.05.400. OFFICE OF TAX APPEALS ESTABLISHED. (a) The office 03 of tax appeals is established within the department. The office of tax appeals is a 04 quasi-judicial agency, headed by a Board of Tax Appeals. 05 (b) The Board of Tax Appeals consists of the chief administrative law judge, 06 who is the chair of the board, and additional administrative law judges as may be 07 appointed; however, the Board of Tax Appeals shall have at least two members. 08 Sec. 43.05.405. JURISDICTION. The office of tax appeals has original 09 jurisdiction to hear formal appeals from informal conference decisions of the 10 Department of Revenue under AS 43.05.240. Appeal to the office may be taken only 11 from an informal conference decision under AS 43.05.240. Jurisdiction of the office 12 is limited to, and AS 43.05.400 - 43.05.499 applies to and governs, an administrative 13 appeal regarding 14 (1) electric and telephone cooperative taxes under AS 10.25; 15 (2) a seafood marketing assessment under AS 16.51; 16 (3) all taxes levied under AS 43, except the property tax assessed under 17 AS 43.56; and 18 (4) any other taxes administered by the Department of Revenue. 19 Sec. 43.05.410. APPOINTMENT. (a) The governor shall appoint a chief 20 administrative law judge of the office of tax appeals, and may appoint additional 21 administrative law judges in the office of tax appeals. 22 (b) The initial term for an administrative law judge is two years. A person 23 appointed to serve as an administrative law judge, including chief administrative law 24 judge, may be appointed to subsequent terms of four years each. 25 (c) The initial appointment and any reappointment of an administrative law 26 judge, including the chief administrative law judge, is subject to confirmation by the 27 legislature in joint session. 28 Sec. 43.05.415. REMOVAL. (a) The chief administrative law judge may be 29 disciplined or removed from office by the commissioner only for good cause. 30 (b) An administrative law judge other than the chief administrative law judge 31 may be disciplined or removed from office by the chief administrative law judge only
01 for good cause. 02 (c) In this section, "good cause" includes 03 (1) violation of the Alaska code of judicial conduct adopted by the 04 Alaska Supreme Court; 05 (2) conviction of a crime of moral turpitude; 06 (3) unjustified failure to handle the caseload assigned or similar 07 nonfeasance of office; 08 (4) failure to meet the requirements of AS 43.05.425 relating to 09 qualification for office; and 10 (5) unreasonable failure to comply with the statutes or regulations 11 regarding the confidentiality of taxpayer information. 12 Sec. 43.05.420. ADMINISTRATION. (a) The chief administrative law judge 13 (1) shall exercise general supervision of the office; and 14 (2) may select and hire staff for the office. 15 (b) An administrative law judge, including the chief administrative law judge, 16 may preside over a proceeding and carry out any procedures authorized under 17 AS 43.05.400 - 43.05.499. 18 (c) The board may adopt regulations implementing or interpreting 19 AS 43.05.400 - 43.05.499, including rules of procedure and evidence for proceedings 20 before the office. 21 Sec. 43.05.425. QUALIFICATIONS; CODE OF CONDUCT. (a) An 22 administrative law judge, including the chief administrative law judge, at the time of 23 appointment, must 24 (1) be licensed to practice law in this state or another state; and 25 (2) have experience in the field of tax law or tax administration. 26 (b) A person appointed as an administrative law judge under AS 43.05.410 27 who is not licensed to practice law in this state at the time of appointment must 28 become licensed to practice law in this state within 12 months after appointment or 29 shall cease to hold office. 30 (c) An administrative law judge, including the chief administrative law judge, 31 shall comply with the Alaska code of judicial conduct and, except as provided in (b)
01 of this section, shall be and remain licensed to practice law in this state. 02 Sec. 43.05.430. NOTICE OF APPEAL FROM INFORMAL CONFERENCE 03 DECISION. An appeal under the jurisdiction of the office is initiated by filing with 04 the office, and serving upon the commissioner of revenue, a notice of appeal from an 05 informal conference decision of the Department of Revenue under AS 43.05.240. A 06 notice of appeal from the informal conference decision may be filed or amended after 07 the time for filing has expired only if good cause is shown. 08 Sec. 43.05.435. SCOPE AND STANDARDS FOR DECISION. The 09 administrative law judge shall hear all questions de novo under AS 43.05.400 - 10 43.05.499. The administrative law judge shall 11 (1) resolve a question of fact by a preponderance of the evidence or, 12 if a different standard of proof has been set by law for a particular question, by that 13 standard of proof; 14 (2) resolve a question of law in the exercise of the independent 15 judgment of the administrative law judge; 16 (3) defer to the Department of Revenue as to a matter for which 17 discretion is legally vested in the Department of Revenue, unless not supported by a 18 reasonable basis. 19 Sec. 43.05.440. SERVICE OF DOCUMENTS. Service of documents required 20 under AS 43.05.400 - 43.05.499 may be accomplished in any manner authorized under 21 the Alaska Rules of Civil Procedure. If service is done only by mail, the date of 22 service is determined by the date of mailing. If service is done by both mail and hand 23 delivery, the date of service is determined by the earlier of the date of mailing or 24 actual receipt of the documents. 25 Sec. 43.05.445. DISCOVERY. (a) In an appeal under AS 43.05.405, 26 discovery may take place only under a plan for discovery approved by the 27 administrative law judge. The administrative law judge shall approve a plan for 28 discovery to the extent consistent with the efficient, just, and speedy conduct of the 29 appeal. The plan may limit or set conditions on discovery and must include provisions 30 for stipulations of fact by the Department of Revenue and the taxpayer. Discovery 31 shall be limited to information that is relevant to the determination of the correct tax
01 or penalty, unless the Department of Revenue or the taxpayer makes a showing that 02 the discovery is reasonably calculated to lead to admissible information. 03 (b) Requests by the taxpayer for disclosure of public records relating to the 04 appeal are governed by, and the records are disclosed only in accordance with, the plan 05 approved under this section. 06 (c) Legislative history, reported court decisions, statutes, regulations, or similar 07 documents available for public inspection at a library or the office of the lieutenant 08 governor or through a publicly accessible database must be obtained through those 09 means and may not be sought through discovery. 10 Sec. 43.05.450. SUBPOENAS. An administrative law judge may issue a 11 subpoena to compel attendance of a witness or the production of a document or thing. 12 A subpoena may compel attendance of a witness or production of a document or thing, 13 located either inside or outside the state, to the maximum extent permitted by law. A 14 subpoena may be used for the purpose of discovery or for the purpose of presenting 15 evidence at a formal hearing. A subpoena shall issue upon request of a party, subject 16 to reasonable limitation or conditions set in the subpoena. A subpoena may be 17 enforced by petition to or other appropriate legal proceeding brought in a court of this 18 state or another jurisdiction. 19 Sec. 43.05.455. FORMAL HEARING. (a) At or before the formal hearing, 20 a party may present argument and evidence relevant to the amount of the tax or 21 penalty. The administrative law judge shall administer oaths and permit inquiry 22 necessary to determine the proper amount of the tax or penalty. 23 (b) Each party and witness shall be present during the formal hearing, except 24 that 25 (1) with the consent of the taxpayer, the administrative law judge may 26 conduct all or part of the hearing by telephone, audio or video teleconference, or other 27 electronic medium; and 28 (2) with the consent of the parties and the administrative law judge, all 29 or part of the hearing may be conducted through correspondence. 30 (c) The taxpayer bears the burden of proof on questions of fact by a 31 preponderance of the evidence unless a different standard of proof has been set by law
01 for a particular question. 02 (d) The formal hearing before the administrative law judge is not required to 03 be conducted with strict adherence to the Alaska Rules of Evidence. Relevant 04 evidence must be admitted if it is probative of a material fact in controversy. 05 Irrelevant and unduly repetitious evidence shall be excluded. Hearsay evidence is 06 admissible if it is the kind of evidence on which responsible persons are accustomed 07 to rely in the conduct of serious affairs, regardless of the existence of a common law 08 or statutory rule that makes improper the admission of the evidence over objection in 09 a civil action. Oral evidence may be taken only on oath or affirmation. The rules of 10 privilege are effective to the same extent that they are recognized in a civil action in 11 the courts of this state, except that relevant documents and other material items that 12 are public records under AS 09.25.100 - 09.25.220 shall be admissible. 13 (e) The administrative law judge shall make a record of the proceedings of the 14 appeal, including recordation of the proceedings of a formal hearing by electronic or 15 stenographic means. 16 (f) The administrative law judge may grant exceptions to the requirements of 17 this section in the interest of justice. 18 Sec. 43.05.460. ENFORCEMENT. (a) The administrative law judge and each 19 party is responsible for the efficient, just, and speedy conduct of the formal hearing. 20 The administrative law judge may impose sanctions on the parties for failure to comply 21 with a subpoena, an order respecting discovery, and any other matter regarding conduct 22 of the appeal. In imposing sanctions, the administrative law judge shall be guided by 23 the practices of the courts of this state in imposing sanctions for similar offenses in 24 civil proceedings. 25 (b) The administrative law judge may 26 (1) remand the matter for consideration of material new information or 27 material information withheld by a party; 28 (2) prohibit a party from introducing information previously withheld 29 without good cause, and any other evidence dependent upon the information; 30 (3) enter an order, upon a showing of good cause, 31 (A) barring a designated claim or defense;
01 (B) striking part or all of a pleading of a party; or 02 (C) dismissing part or all of the appeal; or 03 (4) grant any other relief that the administrative law judge considers 04 appropriate. 05 (c) In addition to the remedies of (a) and (b) of this section, a party may seek 06 enforcement of a subpoena or other order of an administrative law judge by the 07 superior court under AS 44.62.590. 08 Sec. 43.05.465. DECISION; RECONSIDERATION; FINALITY. (a) Within 09 180 days after the record on the appeal is closed, the administrative law judge shall 10 issue a decision in writing. The decision must contain a concise statement of reasons 11 for the decision, including findings of fact and conclusions of law. In the decision, the 12 administrative law judge may grant relief, provide remedies, and issue any order that 13 is appropriate. The administrative law judge shall serve each party in the case with 14 a copy of the decision. Unless reconsideration by the full board is ordered under (c) 15 of this section, the decision under this subsection is the final administrative decision. 16 (b) A party may request reconsideration of a decision issued under (a) of this 17 section within 30 days after the date of service shown in the certificate of service of 18 the decision. The request must state specific grounds for reconsideration. 19 Reconsideration may be granted if, in reaching the decision, the administrative law 20 judge has 21 (1) overlooked, misapplied, or failed to consider a statute, regulation, 22 court or administrative decision, or legal principle directly controlling; 23 (2) overlooked or misconceived some material fact or proposition of 24 law; 25 (3) misconceived a material question in the case; or 26 (4) applied law in the ruling that has subsequently changed. 27 (c) The board may issue an order for reconsideration of all or part of the 28 decision upon request of a party. Reconsideration is based on the record, unless the 29 board allows additional evidence and argument. A hearing on reconsideration at which 30 additional evidence or argument is offered or received is subject to the procedures 31 applicable to a hearing under AS 43.05.455.
01 (d) The power to order reconsideration expires 60 days after the date of 02 service, as shown on the certificate of service, of a decision issued under (a) of this 03 section. If the board does not issue an order for reconsideration within the time 04 allowed for ordering reconsideration, a motion for reconsideration is considered denied. 05 (e) Within 60 days after the close of the record on reconsideration, the board 06 shall issue a written decision upon reconsideration. The board shall serve each party 07 in the case with a copy of the decision upon reconsideration. The decision upon 08 reconsideration is the final administrative decision. 09 (f) A final administrative decision becomes final either on the date 10 (1) 60 days after the date of service of a decision issued under (a) of 11 this section if an order for reconsideration is not issued; or 12 (2) the decision upon reconsideration is served, as shown by the 13 certificate of service executed by the board under (e) of this section. 14 Sec. 43.05.470. PUBLIC PROCEEDINGS AND RECORDS. (a) Records, 15 proceedings, and decisions under AS 43.05.400 - 43.05.499 are confidential, except 16 that the records, proceedings, and decisions become public records and open to the 17 public when the final administrative decision is issued and becomes final. 18 (b) Upon a showing of good cause, an administrative law judge shall issue a 19 protective order requiring that specified parts of the records, proceeding, or decision 20 shall be kept confidential in a particular appeal. If a protective order is issued, the 21 final administrative decision shall be made public after redacting by deletion or 22 substitution of information as required by the protective order. 23 (c) The department, in consultation with the chief administrative law judge, 24 shall maintain, index, and make available for public inspection the final administrative 25 decisions, proceedings, and records of the office made public under this section. 26 Sec. 43.05.475. CONSISTENCY OF DECISIONS. (a) As to questions of 27 law, a final administrative decision issued under AS 43.05.400 - 43.05.499, unless 28 reversed or overruled, has the force of legal precedent. 29 (b) To promote consistency among legal determinations issued under 30 AS 43.05.400 - 43.05.499, the chief administrative law judge may review and circulate 31 among the other administrative law judges the drafts of formal decisions, decisions
01 upon reconsideration, and other legal opinions of the other administrative law judges 02 in the office. The drafts are confidential documents and are not subject to disclosure 03 under AS 09.25.100 - 09.25.220 or this chapter. 04 Sec. 43.05.480. JUDICIAL REVIEW. (a) Judicial review by the superior 05 court of a final administrative decision may be had by a party to the appeal under this 06 chapter by filing a notice of appeal in accordance with the applicable rules of court 07 governing appeals to that court in civil matters. The notice of appeal shall be filed 08 within 30 days after an administrative decision becomes final under AS 43.05.465. 09 The right to judicial review under this subsection is not affected by the failure to seek 10 reconsideration before the administrative law judge. 11 (b) The amount due must be paid or refunded within 30 days after the date 12 that the final administrative decision becomes final under AS 43.05.465. In place of 13 payment of the amount due, a taxpayer who has appealed a final administrative 14 decision may file a bond with the court or otherwise obtain relief from payment in 15 accordance with the Alaska Rules of Appellate Procedure. 16 (c) Appeals under this section are reviewed under AS 44.62.560 and 44.62.570. 17 (d) If, after the appeal is heard, it appears that the final administrative decision 18 was correct, the court shall affirm the decision. If the final administrative decision is 19 incorrect, the court shall determine the amount due. If the taxpayer is entitled to a 20 refund, the court shall order the repayment and the Department of Revenue shall pay 21 the amount due and attach a certified copy of the judgment to the payment. If the 22 court determines that the taxpayer owes an additional amount, the court shall order the 23 payment and the taxpayer shall pay the amount due and attach a certified copy of the 24 judgment to the payment. Any payment required under this subsection shall be paid 25 by the 30th day following the expiration of the time within which an appeal from the 26 superior court decision may be filed, unless the party appealing files a bond or 27 otherwise obtains relief from payment in accordance with the Alaska Rules of 28 Appellate Procedure. 29 Sec. 43.05.499. DEFINITIONS. In AS 43.05.400 - 43.05.499, unless the 30 context otherwise requires, 31 (1) "administrative law judge" means an administrative law judge
01 appointed under AS 43.05.410; 02 (2) "board" means the Board of Tax Appeals established under 03 AS 43.05.410; 04 (3) "commissioner" means the commissioner of administration; 05 (4) "department" means the Department of Administration; 06 (5) "discovery" means the use of subpoenas, subpoenas duces tecum, 07 interrogatories, requests for production, requests for admission, depositions, and other 08 methods of civil procedure by which one party to an action may discover information 09 within the knowledge and control of another person; 10 (6) "legislative history" means the documents of the legislature 11 recording the background and events, including draft bills, correspondence and 12 memoranda, committee reports, tapes and transcripts of hearings, and tapes and 13 transcripts of floor debate concerning consideration of a bill; 14 (7) "office" means office of tax appeals in the department; 15 (8) "party" means the Department of Revenue or the taxpayer; 16 (9) "proceeding" means only a proceeding under the jurisdiction of the 17 office; 18 (10) "subpoena" means a command to appear at a certain time and 19 place to testify, or to appear at a certain time and place to produce books, papers, and 20 other things, and testify; 21 (11) "tax" means a tax described in AS 43.05.405, including a seafood 22 marketing assessment under AS 16.51; 23 (12) "taxpayer" means a person required to pay a tax, including a 24 person required to pay a seafood marketing assessment under AS 16.51. 25 * Sec. 2. AS 09.25.100 is amended to read: 26 Sec. 09.25.100. DISPOSITION OF TAX INFORMATION. Information in the 27 possession of the Department of Revenue that discloses the particulars of the business 28 or affairs of a taxpayer or other person is not a matter of public record, except for 29 purposes of investigation and law enforcement. The information shall be kept 30 confidential except when its production is required in an official investigation, 31 administrative adjudication under AS 43.05.400 - 43.05.499, or court proceeding.
01 These restrictions do not prohibit the publication of statistics presented in a manner 02 that prevents the identification of particular reports and items, [OR] prohibit the 03 publication of tax lists showing the names of taxpayers who are delinquent and 04 relevant information that may assist in the collection of delinquent taxes, or prohibit 05 the publication of records, proceedings, and decisions under AS 43.05.400 - 06 43.05.499. 07 * Sec. 3. AS 09.25.122 is amended to read: 08 Sec. 09.25.122. LITIGATION DISCLOSURE. A public record that is subject 09 to disclosure and copying under AS 09.25.110 - 09.25.120 remains a public record 10 subject to disclosure and copying even if the record is used for, included in, or relevant 11 to litigation, including law enforcement proceedings, involving a public agency, except 12 that with respect to a person involved in litigation, the records sought shall be 13 disclosed in accordance with the rules of procedure applicable in a court or an 14 administrative adjudication [RULES]. In this section, "involved in litigation" means 15 a party to litigation or representing a party to litigation, including obtaining public 16 records for the party. 17 * Sec. 4. AS 22.10.020(d) is amended to read: 18 (d) The superior court has jurisdiction in all matters appealed to it from a 19 subordinate court, or administrative agency when appeal is provided by law. The 20 hearings on appeal from a final order or judgment 21 (1) of a subordinate court [OR ADMINISTRATIVE AGENCY] shall 22 be on the record unless the superior court, in its discretion, grants a trial de novo, in 23 whole or in part; 24 (2) of the Department of Revenue in matters relating to fixing the 25 amount of, or imposing a penalty on, a tax levied and collected by the state when 26 appeal is taken under AS 43.05.242 shall be heard as a trial de novo as a matter 27 of right; 28 (3) of an administrative agency, except for a matter described in 29 (2) of this subsection, shall be on the record unless the superior court, in its 30 discretion, grants a trial de novo, in whole or in part. 31 * Sec. 5. AS 37.10.410 is amended to read:
01 Sec. 37.10.410. "ADMINISTRATIVE PROCEEDINGS INVOLVING TAXES" 02 DEFINED. (a) The following money received by the state is considered to be 03 received as a result of the termination of an administrative proceeding for purposes of 04 applying art. IX, sec. 17(a), Constitution of the State of Alaska: 05 (1) past due taxes that are received by the state for each tax year for 06 which a request for an informal conference under AS 43.05.240 [AS 43.05.240(a)] is 07 made to the Department of Revenue, together with penalties and interest on the taxes; 08 (2) past due taxes that are received by the state after a request for a 09 formal hearing under AS 43.05.241 [AS 43.05.240(b)(1)] is made to the Department 10 of Revenue, together with penalties and interest on the taxes. 11 (b) Money received by the state under the following conditions is not 12 considered to be received as the result of the termination of an administrative 13 proceeding for purposes of applying art. IX, sec. 17(a), Constitution of the State of 14 Alaska: 15 (1) taxes that are not due at the time the request for the proceeding was 16 made under AS 43.05.240, 43.05.241, or 43.05.242 [AS 43.05.240(a) or (b)(1)]; 17 (2) taxes set out in a return not audited by the Department of Revenue 18 at the date of collection; or 19 (3) taxes collected for a tax year for which the taxpayer did not give 20 notice of appeal of an assessment made by the Department of Revenue. 21 * Sec. 6. AS 39.25.110 is amended by adding a new paragraph to read: 22 (31) the chief administrative law judge and any other administrative law 23 judges appointed to the office of tax appeals of the Department of Administration under 24 AS 43.05.400 - 43.05.499. 25 * Sec. 7. AS 43.05.010 is amended to read: 26 Sec. 43.05.010. DUTIES OF COMMISSIONER. The commissioner of revenue 27 shall 28 (1) exercise general supervision and direct the activities of the 29 Department of Revenue; 30 (2) supervise the fiscal affairs and responsibilities of the department; 31 (3) prescribe uniform rules for investigations and hearings;
01 (4) keep a record of all departmental proceedings, record and file all 02 bonds, and assume custody of returns, reports, papers, and documents of the department; 03 (5) [REPEALED 04 (6)] adopt a seal and affix it to each order, process, or certificate issued 05 by the commissioner; 06 (6) [(7)] keep a record of each order, process, and certificate issued by 07 the commissioner, and keep the record open to public inspection at all reasonable times; 08 (7) [(8)] hold hearings and investigations necessary for the administration 09 of state tax and revenue laws; 10 (8) except as provided in AS 43.05.400 - 43.05.499, [(9)] hear and 11 determine appeals of a matter within the jurisdiction of the Department of Revenue 12 [INVOLVING INCOME, EXCISE, LICENSE, OR OTHER TAXES LEVIED UNDER 13 STATE LAWS] and enter orders on the appeals that are final unless reversed or 14 modified by the courts; 15 (9) issue subpoenas to [(10)] require the attendance of witnesses and the 16 production of necessary books, papers, documents, correspondence, and other things 17 [EVIDENCE AT HEARINGS]; 18 (10) [(11)] order the taking of depositions before a person competent to 19 administer oaths; 20 (11) [(12)] administer oaths and take acknowledgments; 21 (12) [(13)] request the attorney general for rulings on the interpretation 22 of the tax and revenue laws administered by the department; 23 (13) [(14)] call upon the attorney general to institute actions for recovery 24 of unpaid taxes, fees, excises, additions to tax, penalties, and interest; 25 (14) [(15)] issue warrants for the collection of unpaid tax penalties and 26 interest and take all steps necessary and proper to enforce full and complete compliance 27 with the tax, license, excise, and other revenue laws of the state; 28 (15) [(16)] audit reports, payments, and payments due relating to royalty 29 and net profits under oil and gas contracts, agreements, or leases under AS 38.05 [; 30 (17) REPEALED]. 31 * Sec. 8. AS 43.05.040 is amended to read:
01 Sec. 43.05.040. INSPECTION OF RECORDS OR PREMISES AND 02 ISSUANCE OF SUBPOENAS. (a) The department may examine the books, papers, 03 records, or memoranda of any person to ascertain the correctness of a return filed or to 04 determine whether a tax or a payment for oil or gas royalty or net profits shares under 05 a contract, agreement, or lease under AS 38.05 is due, or in an investigation or 06 inspection in connection with tax matters or matters relating to oil and gas royalty or net 07 profits under contracts, agreements, or leases under AS 38.05. The records and the 08 premises where a business is conducted shall be open at all reasonable times for official 09 inspection, and the department may subpoena any person to appear and produce books, 10 records, papers, or memoranda bearing upon tax matters or matters relating to oil and gas 11 royalty or net profits under contracts, agreements, or leases under AS 38.05, and to give 12 testimony or answer interrogatories under oath respecting tax matters or matters related 13 to oil and gas royalty or net profits under contracts, agreements, or leases under 14 AS 38.05, and the department may administer oaths to persons who are so subpoenaed. 15 A subpoena issued under this section may compel attendance of a witness or 16 production of a document or thing, located either inside or outside the state, to the 17 maximum extent permitted by law. 18 (b) A subpoena may be served by the commissioner of public safety or a peace 19 officer designated by the commissioner of public safety, [OR] by a person designated by 20 the Department of Revenue, or as otherwise provided by law. A subpoena may also 21 be served by registered or certified mail for delivery restricted only to the person 22 subpoenaed. The return delivery receipt must be addressed so that the receipt is 23 returned to the department. 24 (c) If a person who is subpoenaed neglects or refuses to obey the subpoena 25 issued as provided in this section, the department may report the fact to the superior 26 court or the appropriate court of another jurisdiction, and may seek an order from 27 the court compelling obedience to the subpoena. The [AND THE] court, to the 28 maximum extent permitted by law, may compel obedience to the subpoena to the same 29 extent as witnesses may be compelled to obey the subpoenas of the court. 30 * Sec. 9. AS 43.05.230(a) is amended to read: 31 (a) It is unlawful for a current or former officer, employee, or agent of the state
01 to divulge the amount of income or the particulars set out or disclosed in a report or 02 return made under this title, except 03 (1) in connection with official investigations or proceedings of the 04 department, whether judicial or administrative, involving taxes due under this title; 05 (2) in connection with official investigations or proceedings of the child 06 support enforcement agency, whether judicial or administrative, involving child support 07 obligations imposed or imposable under AS 25 or AS 47; 08 (3) as provided in AS 38.05.036 pertaining to audit functions; [AND] 09 (4) as provided in AS 43.05.400 - 43.05.499; and 10 (5) as otherwise provided in this section. 11 * Sec. 10. AS 43.05.240 is repealed and reenacted to read: 12 Sec. 43.05.240. TAXPAYER REMEDIES. (a) A taxpayer aggrieved by the 13 action of the department in fixing the amount of a tax or penalty may apply to the 14 department within 60 days after the date of mailing of the notice required to be given 15 to the taxpayer by the department, giving notice of the grievance, and requesting an 16 informal conference to be scheduled with an appeals officer. The taxpayer shall be given 17 access to the taxpayer's file in the department in the matter for preparation for the 18 informal conference. At the informal conference, the taxpayer may present to the 19 appeals officer arguments and evidence relevant to the amount of tax or penalty due the 20 state. If the department determines that a correction is warranted, the department shall 21 make the correction. 22 (b) A party who believes that the appeals officer is unduly delaying a hearing 23 process may notify the commissioner in writing. Within 30 days after being notified by 24 a party, the commissioner may issue an order prescribing a schedule for the appeals 25 officer to complete the informal conference or setting a meeting at which that schedule 26 will be discussed and prescribed. The schedule may be subsequently modified by 27 consent of the parties. If the commissioner fails to issue an order within 30 days after 28 receiving notice of a party's belief of undue delay, the department's action in fixing the 29 amount of tax or penalty shall be considered to have been summarily affirmed by the 30 appeals officer the same as if an informal conference decision to that effect were issued 31 on the last day of that 30-day period.
01 * Sec. 11. AS 43.05 is amended by adding new sections to read: 02 Sec. 43.05.241. FORMAL APPEAL. For a matter within the jurisdiction of the 03 office of tax appeals under AS 43.05.405, the taxpayer aggrieved by an informal 04 conference decision entered under AS 43.05.240 may file with the office of tax appeals 05 a notice of appeal for formal hearing, as provided in AS 43.05.430, no later than 60 days 06 after service of the decision resulting from an informal conference. 07 Sec. 43.05.242. JUDICIAL APPEAL. (a) Within 60 days after decision 08 resulting from the informal conference, a person aggrieved by the action of the 09 department under AS 43.05.240 in fixing the amount of a tax or in imposing a penalty 10 may appeal to the superior court. 11 (b) The superior court, sitting without a jury, shall hear all questions de novo. 12 As used in this section, "de novo" has the same meaning as in AS 43.05.400 - 43.05.499. 13 The court shall 14 (1) resolve a question of fact by a preponderance of the evidence or, if 15 a different standard of proof has been set by law for a particular question, by that 16 standard of proof; 17 (2) resolve a question of law in the exercise of the independent judgment 18 of the superior court judge; 19 (3) defer to the Department of Revenue as to a matter for which 20 discretion is legally vested in the Department of Revenue, unless not supported by a 21 reasonable basis. 22 (c) When an appeal is taken under this section, 23 (1) the taxpayer shall be given access to the file of the department in the 24 matter for preparation of the appeal; 25 (2) if, after the appeal is heard, 26 (A) it appears that the tax was correct, the court shall confirm the 27 tax; 28 (B) it appears that the tax was incorrect, the court shall determine 29 the amount of the tax; if the person aggrieved is entitled to recover the tax or 30 part of it, the court shall order the repayment, and the department shall 31 immediately pay the amount due and attach a certified copy of the judgment to
01 the payment. 02 Sec. 43.05.244. TAX, PENALTY, AND INTEREST PAYABLE BEFORE 03 APPEAL. (a) In an appeal from a decision of the department involving a deficiency of 04 taxes levied and collected by the state, whether in a formal hearing under AS 43.05.241 05 and 43.05.400 - 43.05.499 or under a judicial appeal authorized by AS 43.05.242, the 06 taxpayer shall pay to the state the full amount of the tax, penalty, and interest in respect 07 of the amount of tax assessed that is not in dispute. The taxpayer shall post a bond, 08 obtain a letter of credit, or provide other evidence satisfactory to the department that it 09 is able to pay the amount of tax, penalty, and interest in respect of the amount of tax 10 assessed that is in dispute and that is the basis of the taxpayer's appeal. 11 (b) The tax and interest due under this section are the amounts stated in the final 12 order of the department from which the appeal is taken, or if the final order appealed 13 from is a summary judgment or partial summary judgment, the amount shall be as 14 originally assessed on the issue or issues disposed of. 15 * Sec. 12. AS 43.05.245 is amended to read: 16 Sec. 43.05.245. ASSESSMENT AND COLLECTION OF TAX, PENALTIES, 17 AND INTEREST. If a taxpayer fails to file a return or report required by this title in 18 the time required by law or regulation, or makes an erroneous or fraudulent return, the 19 department shall proceed to assess the license fees, tax, penalties, or interest and make 20 a return from information that [WHICH] it obtains. A return made and subscribed by 21 the department in accordance with this section is presumed sufficient for all legal 22 purposes. However, nothing prevents a taxpayer from presenting evidence or other 23 information on an informal conference [APPEAL] under AS 43.05.240 or in an appeal 24 under AS 43.05.241 or 43.05.242 in order to rebut the presumed sufficiency of a return 25 made and subscribed by the department, nor does the presumption of sufficiency alter 26 the parties' respective burdens of proof once the taxpayer has presented evidence or other 27 material information to rebut that presumption. The assessment of license fees, tax, 28 penalties, or interest under this section occurs when the department issues a notice and 29 demand for payment of the license fees, tax, penalties, or interest. The notice and 30 demand for payment is issued when the notice and demand is delivered to the taxpayer 31 in person or placed in the United States mail, addressed to the last known address of the
01 taxpayer. Penalties and interest assessed under this title shall be collected in the same 02 manner as provided in this title for the collection of tax or license fees. 03 * Sec. 13. AS 43.20.270(a) is amended to read: 04 (a) The department may collect taxes, with interest, penalties, and other 05 additional amounts permitted by law, by distraint and sale, in the manner provided in this 06 section, of the property of a person liable to pay the taxes, interest, penalties, or other 07 additional amounts, who neglects or refuses to pay them within 10 days from the mailing 08 of notice and demand for payment of them, and who has not appealed from the 09 assessment of the taxes, interest, penalties, and other additional amounts determined 10 under AS 43.05.240 or following appeal taken under AS 43.05.241 or 43.05.242. 11 * Sec. 14. AS 43.55.013(g) is amended to read: 12 (g) The monthly production at the economic limit for a lease or property is 13 presumed to be 3,000 Mcf times the number of well days for the lease or property during 14 that month for which the tax is to be paid. The taxpayer may rebut this presumption 15 [AT A FORMAL HEARING UNDER AS 43.05.240] by providing clear and convincing 16 evidence of a different monthly production rate at the economic limit for the lease or 17 property. The hearing shall be held before February 15 of the year or within six months 18 after commencement of gas production for a lease or property. The monthly production 19 rate at the economic limit for the lease or property based upon the clear and convincing 20 evidence of the taxpayer shall be calculated by dividing the value determined under (i) 21 of this section into the average monthly direct operating cost determined under (h) of this 22 section. 23 * Sec. 15. AS 43.55.040 is amended to read: 24 Sec. 43.55.040. POWERS OF DEPARTMENT OF REVENUE. Except as 25 provided in AS 43.05.400 - 43.05.499, the [THE] department may 26 (1) require a person engaged in production and the agent or employee of 27 the person, and the purchaser of oil or gas, or the owner of a royalty interest in oil or 28 gas to furnish additional information that is considered by the department as necessary 29 to compute the amount of the tax; 30 (2) examine the books, records, and files of such a person; 31 (3) conduct hearings and compel the attendance of witnesses and the
01 production of books, records, and papers of any person; and 02 (4) make an investigation or hold an inquiry that is considered necessary 03 to a disclosure of the facts as to 04 (A) the amount of production from any oil or gas location, or of 05 a company or other producer of oil or gas; [,] and 06 (B) the rendition of the oil and gas for taxing purposes. 07 * Sec. 16. EFFECT ON EXISTING REMEDIES AND PROCEDURES. This Act does not 08 affect the remedies and procedures 09 (1) specified in AS 04.11, including AS 04.11.560; AS 05.15, including 10 AS 05.15.610; AS 42.05, including AS 42.05.551; or AS 43.56, including AS 43.56.120 and 11 43.56.130; or 12 (2) adopted by regulation by the Department of Revenue governing appeal of a 13 decision of the Department of Revenue regarding 14 (A) a game of chance or skill made under AS 05.15; 15 (B) a permanent fund dividend under AS 43.23; 16 (C) a coin-operated device or punchboard under AS 43.35; or 17 (D) a child support obligation under AS 25.27. 18 * Sec. 17. TRANSITIONAL PROVISIONS. (a) The remedies and procedures provided by 19 this Act apply to all revenue tax appeals in which a request for formal hearing is filed with the 20 Department of Revenue on or after the effective date of this Act. The remedies and procedures 21 existing before the effective date of this Act apply to all revenue tax appeals in which a request 22 for formal hearing was filed with the Department of Revenue before the effective date of this 23 Act, unless, on the effective date of this Act, 24 (1) there has been an informal conference, but there has not been material 25 discovery by either party and substantive motions have not been filed; 26 (2) there has not been an informal conference, nor has there been material 27 discovery by either party and substantive motions have not been filed, but the taxpayer stipulates 28 to proceed to an informal conference under the remedies and procedures established by 29 AS 43.05.240, as amended by sec. 10 of this Act; or 30 (3) the parties stipulate to use the remedies and procedures established by this 31 Act; consent to that stipulation may not be unreasonably withheld by either party.
01 (b) Until regulations authorized under this Act take effect, 15 AAC 05.001 - 02 15 AAC 05.320 govern appeals within the jurisdiction of the office of tax appeals filed after the 03 effective date of this Act, except to the extent the regulations are inconsistent with this Act. 04 (c) Notwithstanding AS 43.05.405, enacted by sec. 1 of this Act, until the office of tax 05 appeals has a full caseload, and with the approval of the chief administrative law judge, the chief 06 administrative law judge or any other administrative law judge of the office of tax appeals may 07 be appointed by the governor, by the commissioner of administration, or by the commissioner 08 of another department to serve as a special hearing officer or special administrative law judge 09 on another matter outside the scope of this Act and arising from another department of the 10 executive branch. Appointment under this subsection may not interfere with the primary mission 11 of the office of tax appeals under this Act of the expeditious resolution of administrative tax 12 appeals under its jurisdiction. 13 (d) Until 15 AAC 05.001 - 15 AAC 05.320 and other Department of Revenue 14 regulations in effect on the effective date of this Act are revised as necessary, those regulations 15 continue to govern an administrative appeal of a Department of Revenue decision not within the 16 jurisdiction of the office of tax appeals, including a decision regarding a 17 (1) game of chance or skill under AS 05.15; 18 (2) permanent fund dividend under AS 43.23; and 19 (3) coin-operated device or punchboard under AS 43.35. 20 (e) In this section, 21 (1) "chief administrative law judge" means the chief administrative law judge 22 of the office of tax appeals appointed under AS 43.05.410, enacted by sec. 1 of this Act; 23 (2) "office of tax appeals" means the office established in AS 43.05.400, enacted 24 by sec. 1 of this Act. 25 * Sec. 18. This Act takes effect July 1, 1996.