CSHB 238(RES): "An Act amending the program of exploration incentive credits for activities involving locatable or leasable minerals or coal deposits on certain land in the state; and providing for an effective date."
00CS FOR HOUSE BILL NO. 238(RES) 01 "An Act amending the program of exploration incentive credits for activities 02 involving locatable or leasable minerals or coal deposits on certain land in the 03 state; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 27.30.010(a) is amended to read: 06 (a) Except as provided in AS 27.30.012, the [THE] commissioner shall grant 07 to a person described in (d) of this section an exploration incentive credit for the 08 eligible costs of each of the following exploration activities that are performed on or 09 for the benefit of land in the state for the purpose of determining the existence, 10 location, extent, or quality of a locatable or leasable mineral or coal deposit, regardless 11 of whether the land is state-owned land: 12 (1) surveying by geophysical or geochemical methods; 13 (2) drilling exploration holes; 14 (3) conducting underground exploration;
01 (4) surface trenching and bulk sampling; [OR] 02 (5) geological mapping; or 03 (6) performing other exploratory work, including aerial photographs, 04 geological and geophysical logging, sample analysis, and metallurgical testing. 05 * Sec. 2. AS 27.30 is amended by adding a new section to read: 06 Sec. 27.30.012. Credit for certain additional mapping or surveying 07 activities. (a) For the eligible costs incurred in conducting geological mapping or 08 geophysical or geochemical surveying when a mining operation is not initiated based 09 on that mapping or surveying activity, an exploration incentive credit may not be 10 certified for the eligible costs of an exploration activity set out in AS 27.30.010(a)(1) 11 or (5) 12 (1) unless the person requesting the taking of the credit has first 13 obtained a determination that 14 (A) the surveying information described under 15 AS 27.30.010(a)(1) and the results of the geological mapping described under 16 AS 27.30.010(a)(5), as appropriate, are of value to the state because they do 17 not duplicate existing data and meet appropriate general or technical standards 18 applicable to mapping or surveying of state land; the determination of value to 19 the state and of compliance with standards under this subparagraph may be 20 made on the basis of a review made 21 (i) by the department; or 22 (ii) at the discretion of the department, by a professional 23 geologist certified or eligible for certification under AS 08.02.011, 24 functioning as a consultant to the department; if a review is to be made 25 by a professional geologist, the geologist must be a person acceptable 26 to both the department and the person requesting the taking of the 27 credit, and the geologist's services shall be retained under a contract 28 entered into by the person requesting the taking of the credit that is 29 approved by the department; 30 (B) the surveying information recovered and geological mapping 31 obtained were first recovered or obtained after the effective date of this Act or,
01 if earlier first recovered or obtained, the department determines that the value 02 of the data to the public is substantial and that the data is specifically eligible 03 for a credit under this chapter; and 04 (C) the surveying information described under 05 AS 27.30.010(a)(1) and the results of the geological mapping described under 06 AS 27.30.010(a)(5) have been made available to the public or will be made 07 available to the public 08 (i) by publication in a recognized professional journal 09 acceptable to the department; 10 (ii) by publication by the person seeking the credit in a 11 manner and at a price acceptable to the department; or 12 (iii) in a manner that is otherwise acceptable to the 13 department; or 14 (2) if, based on material submitted to the commissioner, the 15 commissioner determines that the state will not accept the exploration activity data 16 obtained from the mapping or surveying because that data duplicates existing data, 17 does not conform to appropriate general or technical standards applicable to mapping 18 or surveying of state land, does not comply with the standard of (1)(B) of this 19 subsection, or cannot be made available to the public under (1)(C) of this subsection. 20 (b) The deadlines set out in AS 27.30.020 for the submission of requests for 21 an exploration incentive credit, for certification of expenditures relating to an 22 application for the credit, and for approval or disapproval of the taking of the credit 23 do not apply to a credit based solely on activity that qualifies for a credit authorized 24 by this section. 25 (c) A credit may not be 26 (1) obtained under this section for eligible costs that are paid for or 27 reimbursed to the person by the federal government or the state; or 28 (2) applied for and obtained under this section for eligible costs that are 29 eligible for the credit authorized by AS 27.30.010, whether or not the credit authorized 30 by that section is requested or whether or not the credit authorized by that section is 31 denied by the commissioner or taken by the person.
01 * Sec. 3. AS 27.30.030(a) is amended to read: 02 (a) In a tax year or royalty payment period, subject to (c) of this section and 03 the respective limitations of this subsection, the person may apply the credit, the taking 04 of which was approved under AS 27.30.020(2), against 05 (1) taxes payable by the person 06 (A) under AS 43.65; application of the credit under this 07 subparagraph may not exceed the lesser of 08 (i) 50 percent of the person's tax liability under 09 AS 43.65 for the tax year that is related to production from the mining 10 operation at which the exploration activities occurred, as shown under 11 (b) of this section; or 12 (ii) 50 percent of the person's total tax liability under 13 AS 43.65 for the tax year; 14 (B) under AS 43.20; when the claim of the credit does not 15 contain eligible costs of surveying information described under 16 AS 27.30.010(a)(1) or the results of geological mapping described under 17 AS 27.30.010(a)(5), or when the claim of the credit contains eligible costs 18 of surveying information described under AS 27.30.010(a)(1) or the results 19 of geological mapping described under AS 29.30.010(a)(5) and the 20 surveying information or results of geological mapping cannot be certified 21 by the commissioner as eligible costs under AS 27.30.012, application of the 22 credit under this subparagraph may not exceed the lesser of 23 (i) an amount equal to the amount determined under 24 (A)(i) of this paragraph; or 25 (ii) 50 percent of the person's total tax liability under 26 AS 43.20 for the tax year; [AND] 27 (C) under AS 43.20; when the claim of the credit contains 28 eligible costs of either surveying information described under 29 AS 27.30.010(a)(1) or the results of geological mapping described under 30 AS 27.30.010(a)(5) and the surveying information or results of geological 31 mapping are certified as eligible costs by the commissioner under
01 AS 27.30.012, application of the credit under this subparagraph may not 02 exceed the greater of 03 (i) an amount equal to the amount determined under 04 (A)(i) of this paragraph; or 05 (ii) 50 percent of the person's total tax liability under 06 AS 43.20 for the tax year; and 07 (2) mineral production royalty payments payable by the person under 08 AS 38.05.135 - 38.05.175 and 38.05.212 for production from the mining operation at 09 which the exploration activities occurred; application of the credit under this paragraph 10 may not exceed 50 percent of the person's mineral production royalty payment liability 11 from the mining operation at which the exploration activities occurred. 12 * Sec. 4. AS 27.30.030(b) is amended to read: 13 (b) If the person applies the credit against the person's tax liability under 14 (a)(1)(A)(i), [OR] (a)(1)(B)(i), or (a)(1)(C)(i) of this section, the commissioner of 15 revenue shall disallow application of the credit under that provision unless the person 16 files with the person's tax return an accounting of the person's mining operation 17 activities for each mining operation that is included in the tax return and as to which 18 the credit is being applied. The accounting of mining operation activities required by 19 this subsection shall be made 20 (1) on a form prescribed by the Department of Revenue; on the form, 21 the person shall 22 (A) identify the mining operations for which the credit is 23 claimed; and 24 (B) set out the gross income attributable to the mining 25 operations and other information about the mining operations that the 26 Department of Revenue may require; 27 (2) without regard to an exemption to which the person may be entitled 28 under AS 43.65.010(a). 29 * Sec. 5. AS 27.30.050 is amended to read: 30 Sec. 27.30.050. Limit on application of credit. (a) The grant of all 31 exploration incentive credits for a mining operation under AS 27.30.010, including
01 credits authorized by AS 27.30.012 for geological mapping or geophysical or 02 geochemical surveying when a mining operation is not initiated, made to a person 03 described in AS 27.30.010(d) may not exceed $20,000,000. 04 (b) An exploration incentive credit for a mining operation [MAY NOT 05 EXCEED $20,000,000 AND] must be applied within 15 tax years or royalty payment 06 periods after the taking of the credit is approved under AS 27.30.020(2), but the tax 07 years or royalty payment periods in which the credit is applied need not be 08 (1) the tax year or royalty payment period in which the person first 09 incurs liability for payment of tax or royalty based on the person's activity that is the 10 basis of the claim of the exploration incentive credit; or 11 (2) consecutive periods. 12 * Sec. 6. AS 27.30.090(a) is amended to read: 13 (a) Except as to information the disclosure of which has been authorized 14 by AS 27.30.012, the [THE] commissioner shall keep the exploration activity data 15 provided under AS 27.30.020 confidential for 36 months after receipt by the 16 department. 17 * Sec. 7. AS 27.30.099(2) is amended to read: 18 (2) "eligible costs" means all expenses incurred by a person 19 described in AS 27.30.010(d) in conducting geological mapping or geophysical and 20 geochemical surveying without regard to whether a mining operation is initiated 21 based on the mapping or surveying activities and, in addition, [MEAN] the costs 22 incurred for activities in direct support of exploration activity conducted at the mining 23 operation of the exploration activity for the purpose of determining the existence, 24 location, extent, or quality of a mineral or coal deposit; when used with reference to 25 activities in direct support of exploration activity conducted at the mining 26 operation, the term 27 (A) includes 28 (i) the costs of obtaining the approvals, permits, licenses, 29 and certificates for an exploration activity set out in AS 27.30.010(a) 30 [AS 27.30.010(a)(1) - (5)]; 31 (ii) direct labor costs and the cost of benefits for
01 employees directly associated with work described in AS 27.30.010(a) 02 [AS 27.30.010(a)(1) - (5)]; 03 (iii) the cost of renting or leasing equipment from parties 04 not affiliated with the person requesting and taking the credit; 05 (iv) the reasonable costs of owning, maintaining, and 06 operating equipment; 07 (v) insurance and bond premiums associated with the 08 activities set out in (i) - (iv) of this subparagraph; 09 (vi) payments to consultants and independent 10 contractors; and 11 (vii) the general expense of operating the person's 12 business, including the costs of materials and supplies, if those expenses 13 and costs are directly attributable to the work described in 14 AS 27.30.010(a) [AS 27.30.010(a)(1) - (5)]; 15 (B) does not include return on investment, insurance or bond 16 premiums not covered under (A)(v) of this paragraph, or any other expense that 17 the person has not incurred to complete work described in AS 27.30.010(a) 18 [AS 27.30.010(a)(1) - (5)]; 19 * Sec. 8. AS 27.30.099(3) is amended to read: 20 (3) "exploration activity data" includes, as applicable, 21 (A) a representative skeleton core for each hole cored or a 22 representative set of cuttings for each hole rotary drilled; 23 (B) chemical analytical data, [AND] noninterpretive geophysical 24 data, and geological mapping; 25 (C) aerial photographs or a topographic or geologic map 26 showing the location of the drill holes, sample locations, or the other 27 exploration activities undertaken; 28 * Sec. 9. This Act is retroactive to January 1, 1997, and applies to activities that qualify 29 for the exploration incentive credit authorized by AS 27.30.012, added by sec. 2 of this Act, 30 that are undertaken after December 31, 1996. 31 * Sec. 10. This Act takes effect immediately under AS 01.10.070(c).