SB 124: "An Act providing a tax credit applicable to the oil and gas production tax based on the cost of building a year-round road to access an area of oil and gas exploration and development."
00 SENATE BILL NO. 124 01 "An Act providing a tax credit applicable to the oil and gas production tax based on the 02 cost of building a year-round road to access an area of oil and gas exploration and 03 development." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 43.20.043(g) is amended to read: 06 (g) A taxpayer that obtains a credit for a qualified capital investment or cost 07 incurred for qualified services under this section may not also claim a tax credit or 08 royalty modification for the same qualified capital investment or cost incurred for 09 qualified services under AS 38.05.180(i), AS 41.09.010, AS 43.55.023, [OR] 10 43.55.025, or 43.55.026. However, a taxpayer may elect not to obtain a credit under 11 this section in order to qualify for a credit provided under AS 38.05.180(i), 12 AS 41.09.010, AS 43.55.023, [OR] 43.55.025, or AS 43.55.026. 13 * Sec. 2. AS 43.55 is amended by adding a new section to read: 14 Sec. 43.55.026. Road construction credit. (a) A person that constructs a year-
01 round road that extends more than 25 miles from the state highway system as that 02 system existed on December 31, 2010, to an area of oil or gas exploration or 03 development that was not accessible by a seasonal or year-round road or by sea before 04 January 1, 2011, is entitled to a credit equal to 50 percent of the reasonable and 05 necessary expenditures directly related to the construction of the year-round road. The 06 credit under this section may be applied only against the tax levied by 07 AS 43.55.011(e) on the production of oil or gas from a lease or property accessed by 08 the road that is the basis for the credit. For purposes of this subsection, reasonable and 09 necessary expenditures directly related to the construction of the year-round road do 10 not include expenditures for administration, supervision, or engineering costs; 11 community relations or environmental costs; bonuses; taxes or other payments to 12 governments related to the road; costs, including repairs and replacements, arising 13 from or associated with fraud, wilful misconduct, gross negligence, criminal 14 negligence, or violation of law; or other costs that are generally recognized as indirect 15 costs or financing costs. 16 (b) The commissioner shall, in consultation with the 17 (1) commissioner of transportation and public facilities, determine 18 (A) whether a road for which the credit is claimed under this 19 section extends more than 25 miles from the state highway system as that 20 system existed on December 31, 2010; 21 (B) whether the road may be used year-round; 22 (C) the date construction of the road is complete; and 23 (D) expenditures that are construction expenditures eligible for 24 the credit under this section; 25 (2) commissioner of natural resources, determine whether a road for 26 which the credit is claimed under this section provides access to an area of oil or gas 27 exploration and development that was not accessible year-round by road or by sea 28 before January 1, 2011. 29 (c) The commissioner may, in consultation with the commissioner of 30 transportation and public facilities, adopt regulations that identify expenditures that are 31 the direct costs of road construction and that are eligible for the credit under this
01 section. 02 (d) A credit under this section 03 (1) may not reduce a person's tax liability under AS 43.55.011(e) 04 below zero for any calendar year; 05 (2) may be applied in a later calendar year; and 06 (3) may be transferred in whole or in part to a person producing oil or 07 gas from a lease or property that is more than 25 miles from the state highway system 08 as that system existed on December 31, 2010, and accessed by the road that is the 09 basis for the credit. 10 * Sec. 3. AS 43.55.180(a) is amended to read: 11 (a) The department shall study 12 (1) the effects of the provisions of this chapter on oil and gas 13 exploration, development, and production in the state, on investment expenditures for 14 oil and gas exploration, development, and production in the state, on the entry of new 15 producers into the oil and gas industry in the state, on state revenue, and on tax 16 administration and compliance, giving particular attention to the tax rates provided 17 under AS 43.55.011, the tax credits provided under AS 43.55.023 - 43.55.026 18 [AS 43.55.023 - 43.55.025], and the deductions for and adjustments to lease 19 expenditures provided under AS 43.55.160 - 43.55.170; and 20 (2) the effects of the tax rates under AS 43.55.011(i) on state revenue 21 and on oil and gas exploration, development, and production on private land, and the 22 fairness of those tax rates for private landowners.