SB 203: "An Act relating to a tax credit for a facility to store Cook Inlet gas for sale and delivery in the state; relating to an exemption from the oil and gas exploration, production, and pipeline transportation property tax for a facility that stores Cook Inlet gas for sale and delivery in the state; and providing for an effective date."
00 SENATE BILL NO. 203 01 "An Act relating to a tax credit for a facility to store Cook Inlet gas for sale and delivery 02 in the state; relating to an exemption from the oil and gas exploration, production, and 03 pipeline transportation property tax for a facility that stores Cook Inlet gas for sale and 04 delivery in the state; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 43.20 is amended by adding a new section to article 1 to read: 07 Sec. 43.20.046. Cook Inlet gas storage facility tax credit. (a) A taxpayer that 08 is an owner of a Cook Inlet gas storage facility may apply as a credit against the state 09 tax liability that may be imposed on the taxpayer under this chapter, for a tax year 10 beginning after December 31, 2009, 20 percent of the taxpayer's qualified capital 11 investment in a Cook Inlet gas storage facility. The credit is subject to the terms and 12 conditions of this section and is in addition to any other credit authorized to the 13 taxpayer by this chapter. 14 (b) A qualified capital investment for the investment credit under (a) of this
01 section is 02 (1) a cash expenditure or a payment due under a binding payment 03 agreement entered into after December 31, 2009, and before January 1, 2013, made for 04 the purchase, construction, or other acquisition of an ownership interest in the real 05 property or tangible personal property used in this state for a Cook Inlet gas storage 06 facility; in this paragraph, "property" includes 07 (A) property that is placed in use under a capitalized lease or an 08 operating lease; and 09 (B) machinery, appliances, supplies, and equipment directly 10 related to the storage of gas produced from the Cook Inlet sedimentary basin 11 and designated for sale and delivery in the state; and 12 (2) the cost of cushion gas acquired after December 31, 2009, and 13 before January 1, 2013, that is required for a Cook Inlet gas storage facility to 14 function. 15 (c) The credit for each tax year allowed under (a) of this section may not 16 exceed 50 percent of the taxpayer's total tax liability under this chapter, but shall be 17 calculated before the application of any other credits allowed under this chapter. An 18 unused portion of the credit for the tax year 19 (1) may be carried forward into one or more of the following tax years, 20 except that the unused credit from one tax year may not be carried forward for more 21 than five following tax years; 22 (2) shall be applied to the taxpayer's tax liability under this chapter 23 during the following tax year before allowance of a credit allowed under (a) of this 24 section for that following tax year. 25 (d) To obtain the credit allowed by this section, the taxpayer has the burden of 26 demonstrating compliance with the requirements of this section to entitle the taxpayer 27 to the claim of and the amount of the credit. To claim the credit, a person shall submit, 28 on a form prescribed by the department, information that demonstrates that the 29 taxpayer is eligible for the credit and evidence of the expenses that are the basis of the 30 claim of the credit. A person 31 (1) required to file a return under this chapter shall submit the form
01 claiming the credit with the taxpayer's return; 02 (2) not required to file a return under this chapter shall submit the form 03 claiming the credit before May 1 of the year following the year in which the 04 expenditure qualifying for the credit under this section is made. 05 (e) A taxpayer entitled to a credit under this section 06 (1) with prior written approval by the department, may convey, assign, 07 or transfer the credit to another taxpayer or business entity; 08 (2) forfeits the credit to which the taxpayer is entitled during the tax 09 year and any carryover of it under (c) of this section, but does not forfeit the portion of 10 the credit that accrued in a previous taxable year that may be carried over under (c) of 11 this section, if the taxpayer 12 (A) disposes of the qualified capital investment; 13 (B) takes the qualified investment out of service; or 14 (C) fails to use the Cook Inlet gas storage facility primarily for 15 the storage of gas for sale and delivery in the state. 16 (f) In this section, 17 (1) "Cook Inlet gas storage facility" means a tank, depleted reservoir, 18 injection well for gas storage permitted under AS 31.05, or other structure in the state 19 for the storage of gas that is produced from the Cook Inlet sedimentary basin and 20 designated for sale and delivery in the state, and includes machinery, supplies, and 21 equipment directly related to and necessary for filling and withdrawing gas from the 22 structures holding the gas for storage in the facility; 23 (2) "Cook Inlet sedimentary basin" has the meaning given in 24 AS 43.55.900; 25 (3) "cushion gas" means gas that is needed to pressurize the storage 26 facility and that allows the storage facility to function. 27 * Sec. 2. AS 43.56.210(5) is amended to read: 28 (5) "taxable property" 29 (A) means real and tangible personal property used or 30 committed by contract or other agreement for use within this state primarily in 31 the exploration for, production of, or pipeline transportation of gas or unrefined
01 oil (except for property used solely for the retail distribution or liquefaction of 02 natural gas), or in the operation or maintenance of facilities used in the 03 exploration for, production of, or pipeline transportation of gas or unrefined 04 oil; "taxable property" includes 05 (i) machinery, appliances, supplies, and equipment; 06 (ii) drilling rigs, wells (whether producing or not), 07 gathering lines and transmission lines, pumping stations, compressor 08 stations, power plants, topping plants, and processing units; 09 (iii) roads, tank farms, tanker terminals, docks and other 10 port facilities, and air strips; 11 (iv) aircraft and motor vehicles owned by a person 12 whose principal business in the state is the exploration for, production 13 of, or pipeline transportation of gas or unrefined oil and whose 14 operation of the aircraft or motor vehicle directly relates to the conduct 15 of that business; 16 (v) maintenance equipment and facilities, and 17 maintenance camps and other related facilities; and 18 (vi) communications facilities owned by a person 19 whose principal business in the state is the exploration for, production 20 of, or pipeline transportation of gas or unrefined oil and whose 21 operation of the communications facilities directly relates to the 22 conduct of that business; 23 (B) does not include 24 (i) permanent residences; 25 (ii) office buildings requiring substantial local 26 government services; 27 (iii) oil and gas pipeline systems owned and operated by 28 a public utility that is certificated under AS 42.05.221 and is regulated 29 by the Regulatory Commission of Alaska; 30 (iv) aircraft and motor vehicles, except aircraft and 31 motor vehicles taxable under (A)(iv) of this paragraph; [AND]
01 (v) communications facilities, except communications 02 facilities taxable under (A)(vi) of this paragraph; and 03 (vi) notwithstanding (A) of this paragraph, a Cook 04 Inlet gas storage facility, as that term is defined in AS 43.20.046; 05 * Sec. 3. This Act takes effect immediately under AS 01.10.070(c).