CSHB 63(2D RLS): "An Act amending the definition of `motor fuel' under the state's motor fuel tax to add, as a part of the tax exemption set out in that definition, exemption from the tax for fuel sold for use in jet propulsion aircraft operating in flights that continue from foreign countries, subject to termination of the exemption for that fuel if a refiner operating a refinery at which the fuel was produced fails to comply with terms of a voluntary agreement entered into by the refiner to use Alaska residents, contractors, and suppliers to provide goods and services when the refinery's capacity is expanded, to add exemption from the tax for certain number 6 `residual fuel oil,' also known as bunker fuel, and to delete the exemption from the tax for fuel that is at least 10 percent alcohol by volume; and repealing ch. 42, SLA 1994, the Act providing for the imposition of a different tax levy on residual fuel oil used in and on certain watercraft until June 30, 1998; and providing for an effective date."
00 01 "An Act amending the definition of `motor fuel' under the state's motor fuel 02 tax to add, as a part of the tax exemption set out in that definition, exemption 03 from the tax for fuel sold for use in jet propulsion aircraft operating in flights 04 that continue from foreign countries, subject to termination of the exemption for 05 that fuel if a refiner operating a refinery at which the fuel was produced fails 06 to comply with terms of a voluntary agreement entered into by the refiner to 07 use Alaska residents, contractors, and suppliers to provide goods and services 08 when the refinery's capacity is expanded, to add exemption from the tax for 09 certain number 6 `residual fuel oil,' also known as bunker fuel, and to delete the 10 exemption from the tax for fuel that is at least 10 percent alcohol by volume; 11 and repealing ch. 42, SLA 1994, the Act providing for the imposition of a 12 different tax levy on residual fuel oil used in and on certain watercraft until 13 June 30, 1998; and providing for an effective date." 14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
01 * Section 1. AS 43.40.015(d) is amended to read: 02 (d) A certificate of use is not required 03 (1) for fuel exempted under AS 43.40.100(2)(C) [, (F),] or (J) [(K)]; 04 and 05 (2) for fuel exempted under AS 43.40.100(2)(I) [AS 43.40.100(2)(J)] 06 other than fuel sold or transferred under this exemption to a person who is engaged in 07 construction or mining activity. 08 * Sec. 2. AS 43.40 is amended by adding a new section to read: 09 Sec. 43.40.092. Disallowance of exemption from motor fuel tax for certain 10 fuel sold for use in jet propulsion aircraft operating in flights that continue from 11 foreign countries. (a) The provisions of this section apply to disallow the exemption 12 for motor fuel sold for use by a dealer or used by a user in jet propulsion aircraft 13 operating in flights that continue from foreign countries if, for motor fuel produced by 14 a refiner, 15 (1) the refiner determines, on or after the effective date of this section, 16 that the refiner will expand capacity or expand the refinery to produce more residual 17 fuel oil used in watercraft; 18 (2) on or after the effective date of this section, the refiner has 19 voluntarily committed by agreement entered into with the commissioner that, if the 20 refiner expands its oil refining capacity in order to produce additional supplies of fuel 21 for use in jet propulsion aircraft that qualify for the tax exemption, when the refiner 22 expands capacity, the refiner will 23 (A) use the refiner's best efforts to advertise for, recruit, and 24 employ in the construction activities associated with expanding refinery 25 capacity resident workers who have experience in the specific fields in which 26 they are hired to work; 27 (B) contract with licensed Alaska firms to prepare materials that 28 are used in construction activities and to provide services in conjunction with 29 activities associated with expanded refinery capacity and, in contracting with 30 those firms, to encourage the refiner's contractors to employ and, when 31 necessary, train state residents; and
01 (C) enter into contracts with Alaska-licensed vendors, 02 contractors, and suppliers for the provision of supplies and services used in 03 conjunction with activities associated with expanding refinery capacity; and 04 (3) the commissioner determines that a dealer or user claiming the 05 exemption for motor fuel acquired from a refiner who has entered into an agreement 06 described in (2) of this subsection acquired the motor fuel for which the exemption is 07 claimed from a refiner who has not complied with the requirements of the agreement 08 in completing expansion of its oil refining capacity under the agreement described in 09 (1) of this subsection. 10 (b) For purposes of this section, 11 (1) the term "resident worker" means an individual who 12 (A) is physically present in the state with the intent to remain 13 in the state indefinitely and has a home in the state; 14 (B) demonstrates that intent by maintaining a residence in the 15 state; 16 (C) possesses a resident fishing, trapping, or hunting license, or 17 receives a permanent fund dividend; and 18 (D) may be required to state under oath that the individual is 19 not claiming residency outside of the state or obtaining benefits under a claim 20 of residency outside of the state; 21 (2) the phrases "Alaska-licensed contractors" and "Alaska firms" mean 22 a contractor or firm that 23 (A) has held an Alaska business license for one year before 24 performing any work in connection with the commitment described in (a) of 25 this section; 26 (B) has maintained for one year a place of business within the 27 state that deals in the supplies, services, or construction of the nature required 28 for the commitment described in (a) of this section; and 29 (C) is 30 (i) a sole proprietorship and the proprietor is an Alaska 31 resident;
01 (ii) a partnership and more than 50 percent of the 02 partners are Alaska residents; 03 (iii) a corporation that has been incorporated in the state 04 or is authorized to do business in the state; or 05 (iv) a joint venture composed entirely of ventures that 06 qualify under this subparagraph. 07 * Sec. 3. AS 43.40.100(2) is amended to read: 08 (2) "motor fuel" means fuel used in an engine for the propulsion of a 09 motor vehicle or aircraft, and fuel used in and on watercraft for any purpose, or in a 10 stationary engine, machin e, or mechanical contrivance that [WHICH] is run by an 11 internal combustion motor; "motor fuel" does not include 12 (A) fuel consigned to foreign countries; 13 (B) fuel sold for use in jet propulsion aircraft operating in 14 flights 15 (i) to foreign countrie s; or 16 (ii) that continue from foreign countries, unless 17 exemption of the motor fuel from taxation is disallowed because of 18 the refiner's failure to comply with the provisions of a voluntary 19 agreement under AS 43.40.092 in conjunction with expansion of 20 refinery capacity ; 21 (C) fuel used in stationary power plants operating as public 22 utility plants and generating electrical energy for sale to the general public; 23 (D) fuel used by nonprofit power associations or corporations 24 for generating electric energy for resale; 25 (E) fuel used by charitable institutions; 26 (F) [FUEL WHICH IS AT LEAST 10 PERCENT ALCOHOL 27 BY VOLUME; 28 (G)] fuel sold or transferred between qualified dealers; 29 (G) [(H)] fuel sold to federal, state, and local government 30 agencies for official use; 31 (H) [(I)] fuel used in stationary power plants that generate
01 electrical energy for private residential consumption; 02 (I) [(J)] fuel used to heat private or commercial buildings or 03 facilities; 04 (J) [(K)] fuel used for other nontaxable purposes as prescribed 05 by regulations adopted by the department; [OR] 06 (K) [(L)] fuel used in stationary power plants of 100 kilowatts 07 [KW] or less that generate electrical power for commercial enterprises not for 08 resale; or 09 (L) residual fuel oil used in and on watercraft if the residual 10 fuel oil is sold or transferred in the state or consumed by a user; for 11 purposes of this subparagraph, "residual fuel oil" means the heavy refined 12 hydrocarbon known as number 6 fuel oil that is the residue from crude oil 13 after refined petroleum products have been extracted by the refining 14 process and that may be consumed or used only when sufficient heat is 15 provided to the oil to reduce its viscosity rated by kinetic unit and to give 16 it fluid properties sufficient for pumping and combustion; 17 * Sec. 4. Chapter 42, SLA 1994, is repealed. 18 * Sec. 5. This Act takes effect July 1, 1997.