CSHB 337(RES): "An Act relating to credits against the oil and gas production tax; relating to the interest rates applicable on certain amounts due related to various taxes, penalties, payments, and the Alaska Gasline Inducement Act; relating to the use of the oil and gas tax credit fund to purchase certain tax credit certificates; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 337(RES) 01 "An Act relating to credits against the oil and gas production tax; relating to the interest 02 rates applicable on certain amounts due related to various taxes, penalties, payments, 03 and the Alaska Gasline Inducement Act; relating to the use of the oil and gas tax credit 04 fund to purchase certain tax credit certificates; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 05.15.095(c) is amended to read: 07 (c) A delinquent fee bears interest at the rate set by AS 43.05.225(2) 08 [AS 43.05.225]. 09 * Sec. 2. AS 34.45.470(a) is amended to read: 10 (a) A person who fails to pay or deliver property within the time prescribed by 11 this chapter may be required to pay to the department interest at the annual rate 12 calculated under AS 43.05.225(2) [AS 43.05.225] on the property or the value of it 13 from the date the property should have been paid or delivered. 14 * Sec. 3. AS 43.05.225 is amended to read:
01 Sec. 43.05.225. Interest. Unless otherwise provided, 02 (1) when a tax levied in this title becomes delinquent, it bears interest 03 in a calendar quarter at the rate of five percentage points above the annual rate charged 04 member banks for advances by the 12th Federal Reserve District as of the first day of 05 that calendar quarter, [OR AT THE ANNUAL RATE OF 11 PERCENT, 06 WHICHEVER IS GREATER,] compounded quarterly as of the last day of that 07 quarter; 08 (2) the interest rate is 12 percent a year for 09 (A) delinquent fees payable under AS 05.15.095(c); and 10 (B) [REPEALED 11 (C)] unclaimed property that is not timely paid or delivered, as 12 allowed by AS 34.45.470(a). 13 * Sec. 4. AS 43.50.570 is amended to read: 14 Sec. 43.50.570. Interest. A licensee who fails to pay an amount due for the 15 purchase of stamps within the time required 16 (1) is considered to have failed to pay the cigarette taxes due under this 17 chapter; and 18 (2) shall pay interest at the rate established under AS 43.05.225(1) 19 [AS 43.05.225] from the date on which the amount became due until the date of 20 payment. 21 * Sec. 5. AS 43.55.020(g) is amended to read: 22 (g) Notwithstanding any contrary provision of AS 43.05.225, an unpaid 23 amount of an installment payment required under (a)(1) - (3) of this section that is not 24 paid when due bears interest (1) at the rate provided for an underpayment under 26 25 U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date 26 the installment payment is due until March 31 following the calendar year of 27 production, and (2) as provided for a delinquent tax under AS 43.05.225(1) 28 [AS 43.05.225] after that March 31. Interest accrued under (1) of this subsection that 29 remains unpaid after that March 31 is treated as an addition to tax that bears interest 30 under (2) of this subsection. An unpaid amount of tax due under (a)(4) of this section 31 that is not paid when due bears interest as provided for a delinquent tax under
01 AS 43.05.225(1) [AS 43.05.225]. 02 * Sec. 6. AS 43.55.020 is amended by adding a new subsection to read: 03 (i) Notwithstanding any contrary provision of AS 43.05.225 or (g) or (h) of 04 this section, if the amount of a tax payment, including an installment payment, due 05 under (a)(1) - (4) of this section is affected by the retroactive application of a 06 regulation adopted under this chapter, the department shall determine whether the 07 retroactive application of the regulation caused an underpayment or an overpayment of 08 the amount due and adjust the interest due on the affected payment as follows: 09 (1) if an underpayment of the amount due occurred, the department 10 shall waive interest that would otherwise accrue for the underpayment before the first 11 day of the second month following the month in which the regulation became 12 effective, if 13 (A) the department determines that the producer's 14 underpayment resulted because the regulation was not in effect when the 15 payment was due; and 16 (B) the producer demonstrates that it made a good faith 17 estimate of its tax obligation in light of the regulations then in effect when the 18 payment was due and paid the estimated tax; 19 (2) if an overpayment of the amount due occurred and the department 20 determines that the producer's overpayment resulted because the regulation was not in 21 effect when the payment was due, the obligation for a refund for the overpayment does 22 not begin to accrue interest earlier than the following, as applicable: 23 (A) except as otherwise provided under (B) of this paragraph, 24 the first day of the second month following the month in which the regulation 25 became effective; 26 (B) 90 days after an amended statement under AS 43.55.030(a) 27 and an application to request a refund of production tax paid is filed, if the 28 overpayment was for a period for which an amended statement under 29 AS 43.55.030(a) was required to be filed before the regulation became 30 effective. 31 * Sec. 7. AS 43.55.023(a) is amended to read:
01 (a) A producer or explorer may take a tax credit for a qualified capital 02 expenditure as follows: 03 (1) notwithstanding that a qualified capital expenditure may be a 04 deductible lease expenditure for purposes of calculating the production tax value of oil 05 and gas under AS 43.55.160(a), unless a credit for that expenditure is taken under 06 AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025, a producer or 07 explorer that incurs a qualified capital expenditure may also elect to apply a tax credit 08 against a tax levied by AS 43.55.011(e) in the amount of 20 percent of that 09 expenditure; [HOWEVER, NOT MORE THAN HALF OF THE TAX CREDIT MAY 10 BE APPLIED FOR A SINGLE CALENDAR YEAR;] 11 (2) a producer or explorer may take a credit for a qualified capital 12 expenditure incurred in connection with geological or geophysical exploration or in 13 connection with an exploration well only if the producer or explorer 14 (A) agrees, in writing, to the applicable provisions of 15 AS 43.55.025(f)(2); 16 (B) submits to the Department of Natural Resources all data 17 that would be required to be submitted under AS 43.55.025(f)(2). 18 * Sec. 8. AS 43.55.023(d) is amended to read: 19 (d) Except as limited by (i) of this section, a person that is entitled to take a tax 20 credit under this section that wishes to transfer the unused credit to another person or 21 obtain a cash payment under AS 43.55.028 may apply to the department for a 22 transferable tax credit certificate [CERTIFICATES]. An application under this 23 subsection must be in a form prescribed by the department and must include 24 supporting information and documentation that the department reasonably requires. 25 The department shall grant or deny an application, or grant an application as to a lesser 26 amount than that claimed and deny it as to the excess, not later than 120 days after the 27 latest of (1) March 31 of the year following the calendar year in which the qualified 28 capital expenditure or carried-forward annual loss for which the credit is claimed was 29 incurred; (2) the date the statement required under AS 43.55.030(a) or (e) was filed for 30 the calendar year in which the qualified capital expenditure or carried-forward annual 31 loss for which the credit is claimed was incurred; or (3) the date the application was
01 received by the department. If, based on the information then available to it, the 02 department is reasonably satisfied that the applicant is entitled to a credit, the 03 department shall issue the applicant a [TWO TRANSFERABLE] tax credit certificate 04 [CERTIFICATES, EACH FOR HALF OF THE AMOUNT OF THE CREDIT]. The 05 credit shown on [ONE OF] the certificate [TWO CERTIFICATES] is available for 06 immediate use. [THE CREDIT SHOWN ON THE SECOND OF THE TWO 07 CERTIFICATES MAY NOT BE APPLIED AGAINST A TAX FOR A CALENDAR 08 YEAR EARLIER THAN THE CALENDAR YEAR FOLLOWING THE 09 CALENDAR YEAR IN WHICH THE CERTIFICATE IS ISSUED, AND THE 10 CERTIFICATE MUST CONTAIN A CONSPICUOUS STATEMENT TO THAT 11 EFFECT.] A certificate issued under this subsection does not expire. 12 * Sec. 9. AS 43.55.023(g) is amended to read: 13 (g) The issuance of a transferable tax credit certificate under (d) of this section 14 or the purchase of a certificate under AS 43.55.028 does not limit the department's 15 ability to later audit a tax credit claim to which the certificate relates or to adjust the 16 claim if the department determines, as a result of the audit, that the applicant was not 17 entitled to the amount of the credit for which the certificate was issued. The tax 18 liability of the applicant under AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased 19 by the amount of the credit that exceeds that to which the applicant was entitled, or the 20 applicant's available valid outstanding credits applicable against the tax levied by 21 AS 43.55.011(e) are reduced by that amount. If the applicant's tax liability is increased 22 under this subsection, the increase bears interest under AS 43.05.225(1) 23 [AS 43.05.225] from the date the transferable tax credit certificate was issued. For 24 purposes of this subsection, an applicant that is an explorer is considered a producer 25 subject to the tax levied by AS 43.55.011(e). 26 * Sec. 10. AS 43.55.023 is amended by adding a new subsection to read: 27 (m) A producer or explorer may take a tax credit for a well-related 28 expenditure incurred after June 30, 2010, and before July 1, 2016, as follows: 29 (1) notwithstanding that a well-related expenditure may be a 30 deductible lease expenditure under AS 43.55.165 for purposes of calculating the 31 production tax value of oil and gas under AS 43.55.160(a), unless a credit for that
01 expenditure is taken under (a) of this section, AS 38.05.180(i), AS 41.09.010, 02 AS 43.20.043, or AS 43.55.025, a producer or explorer that incurs a well-related 03 expenditure may also elect to apply a credit against a tax levied by AS 43.55.011(e) in 04 the amount of 30 percent of the expenditures during a calendar year that exceed the 05 average annual well-related expenditures for the calendar years 2008 and 2009; the 06 producer or explorer shall submit the amount of well-related expenditures for each of 07 the years 2008 and 2009, at the time an election is made to apply the credit authorized 08 by this subsection; 09 (2) a producer or explorer may take a credit for a well-related 10 expenditure incurred in connection with geological or geophysical exploration or in 11 connection with an exploration well only if the producer or explorer 12 (A) agrees, in writing, to the applicable provisions of 13 AS 43.55.025(f)(2); and 14 (B) submits to the Department of Natural Resources all data 15 that would be required to be submitted under AS 43.55.025(f)(2) for a credit 16 under AS 43.55.025; 17 (3) in this subsection, "well-related expenditure" means a lease 18 expenditure 19 (A) directly related to an exploration well, a stratigraphic test 20 well, a producing well, or an injection well other than a disposal well, if the 21 expenditure is a qualified capital expenditure and an intangible drilling and 22 development cost under 26 U.S.C. 263(c), as amended, and 26 C.F.R. 1.612-4, 23 regardless of the elections made under 26 U.S.C. 263(c); in this subparagraph, 24 an expenditure directly related to a well includes an expenditure for well 25 drilling, well sidetracking, well deepening, well testing, well stimulation, well 26 completion or recompletion, or well workover, regardless as to whether the 27 well is or has been a producing well; or 28 (B) for seismic work conducted within the boundaries of a 29 production or exploration unit. 30 * Sec. 11. AS 43.77.020(d) is amended to read: 31 (d) A person subject to the tax under this chapter shall make quarterly
01 payments of the tax estimated to be due for the year, as required under regulations 02 adopted by the department. A taxpayer will be subject to an estimated tax penalty, 03 determined by applying the interest rate specified in AS 43.05.225(1) [AS 43.05.225] 04 to the underpayment for each quarter, unless the taxpayer makes estimated tax 05 payments in equal installments that total either 06 (1) at least 90 percent of the taxpayer's tax liability under this chapter 07 for the tax year; or 08 (2) at least 100 percent of the taxpayer's tax liability under this chapter 09 for the prior tax year. 10 * Sec. 12. AS 43.90.430 is amended to read: 11 Sec. 43.90.430. Interest. When a payment due to the state under this chapter 12 becomes delinquent, the payment bears interest at the rate applicable to a delinquent 13 tax under AS 43.05.225(1) [AS 43.05.225]. 14 * Sec. 13. AS 43.55.028(e)(2) and 43.55.028(e)(3) are repealed. 15 * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 TRANSITION: APPLICABILITY OF SEC. 6 OF THIS ACT. Section 6 of this Act 18 applies to taxes, including installment payments of estimated tax, due on or after February 27, 19 2007. 20 * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 RETROACTIVITY OF REGULATIONS. Notwithstanding any contrary provision of 23 AS 44.62.240, if the Department of Revenue expressly designates in a regulation to 24 implement, interpret, make specific or otherwise carry out secs. 6, 7, or 8 of this Act, or 25 AS 43.55.023(m), as enacted by sec. 10 of this Act, that the regulation applies retroactively to 26 a specific date, the regulation applies retroactively to that date. 27 * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to 28 read: 29 RETROACTIVITY OF SECS. 6 - 8 OF THIS ACT. (a) Section 6 of this Act is 30 retroactive to February 28, 2007. 31 (b) Sections 7 and 8 of this Act are retroactive to January 1, 2010.
01 * Sec. 17. Sections 1 - 5, and 9 - 11 of this Act take effect July 1, 2010. 02 * Sec. 18. Except as provided in sec. 17 of this Act, this Act takes effect immediately under 03 AS 01.10.070(c).