CSHB 4005(FIN): "An Act relating to the mining license tax; relating to the exploration incentive credit and royalty payments; relating to mining license application, renewal, and fees; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 4005(FIN) 01 "An Act relating to the mining license tax; relating to the exploration incentive credit 02 and royalty payments; relating to mining license application, renewal, and fees; and 03 providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 27.30.030(a) is amended to read: 06 (a) In a tax year [OR ROYALTY PAYMENT PERIOD], subject to (c) of this 07 section and the respective limitations of this subsection, the person may apply the 08 credit, the taking of which was approved under AS 27.30.020(2), against [(1)] taxes 09 payable by the person 10 (1) [(A)] under AS 43.65; application of the credit under this 11 paragraph [SUBPARAGRAPH] may not exceed the lesser of 12 (A) [(i)] 50 percent of the person's tax liability under AS 43.65 13 for the tax year that is related to production from the mining operation at which 14 the exploration activities occurred, as shown under (b) of this section; or
01 (B) [(ii)] 50 percent of the person's total tax liability under 02 AS 43.65 for the tax year; 03 (2) [(B)] under AS 43.20; application of the credit under this 04 paragraph [SUBPARAGRAPH] may not exceed the lesser of 05 (A) [(i)] an amount equal to the amount determined under 06 (1)(A) [(A)(i)] of this subsection [PARAGRAPH]; or 07 (B) [(ii)] 50 percent of the person's total tax liability under 08 AS 43.20 for the tax year [; AND 09 (2) MINERAL PRODUCTION ROYALTY PAYMENTS PAYABLE 10 BY THE PERSON UNDER AS 38.05.135 - 38.05.160 AND 38.05.212 FOR 11 PRODUCTION FROM THE MINING OPERATION AT WHICH THE 12 EXPLORATION ACTIVITIES OCCURRED; APPLICATION OF THE CREDIT 13 UNDER THIS PARAGRAPH MAY NOT EXCEED 50 PERCENT OF THE 14 PERSON'S MINERAL PRODUCTION ROYALTY PAYMENT LIABILITY FROM 15 THE MINING OPERATION AT WHICH THE EXPLORATION ACTIVITIES 16 OCCURRED]. 17 * Sec. 2. AS 27.30.030(b) is amended to read: 18 (b) If the person applies the credit against the person's tax liability under 19 (a)(1)(A) or (a)(2)(A) [(a)(1)(A)(i) OR (a)(1)(B)(i)] of this section, the commissioner 20 of revenue shall disallow application of the credit under that provision unless the 21 person files with the person's tax return an accounting of the person's mining operation 22 activities for each mining operation that is included in the tax return and as to which 23 the credit is being applied. The accounting of mining operation activities required by 24 this subsection shall be made 25 (1) on a form prescribed by the Department of Revenue; on the form, 26 the person shall 27 (A) identify the mining operations for which the credit is 28 claimed; and 29 (B) set out the gross income attributable to the mining 30 operations and other information about the mining operations that the 31 Department of Revenue may require;
01 (2) without regard to an exemption to which the person may be entitled 02 under AS 43.65.010(a). 03 * Sec. 3. AS 27.30.040 is amended to read: 04 Sec. 27.30.040. Credit may be carried forward. Except as its application is 05 limited by AS 27.30.030 and 27.30.050, a portion of a credit that is not applied under 06 AS 27.30.030 during a tax year [OR ROYALTY PAYMENT PERIOD] may be 07 carried forward to and applied during a subsequent tax year [OR ROYALTY 08 PAYMENT PERIOD]. 09 * Sec. 4. AS 27.30.050 is amended to read: 10 Sec. 27.30.050. Limit on application of credit. An exploration incentive 11 credit for a mining operation may not exceed $20,000,000 and must be applied within 12 15 tax years [OR ROYALTY PAYMENT PERIODS] after the taking of the credit is 13 approved under AS 27.30.020(2), but the tax years [OR ROYALTY PAYMENT 14 PERIODS] in which the credit is applied need not be 15 (1) the tax year [OR ROYALTY PAYMENT PERIOD] in which the 16 person first incurs liability for payment of tax [OR ROYALTY] based on the person's 17 activity that is the basis of the claim of the exploration incentive credit; or 18 (2) consecutive periods. 19 * Sec. 5. AS 38.05.150(d) is amended to read: 20 (d) For the privilege of mining or extracting the coal in the land covered by 21 the lease, the lessee 22 (1) shall pay to the state the royalties specified in the lease; the 23 royalties shall be fixed before offering the lease, and shall be effective for a period of 24 not more than 20 years; the royalties shall be not less than five cents a ton of 2,000 25 pounds; [THE ROYALTY PAYMENT IS SUBJECT TO THE EXPLORATION 26 INCENTIVE CREDIT AUTHORIZED BY AS 27.30;] 27 (2) shall also pay an annual rental, payable at the date of the lease and 28 annually thereafter, on the land or coal deposits covered by the lease, at a rate fixed by 29 the commissioner before offering the lease; the annual rental shall be effective for a 30 period of not more than 20 years; the annual rental shall be not less than 25 cents an 31 acre for the first year of the lease, not less than 50 cents an acre for the second year,
01 third year, fourth year and fifth year, and not less than $1 an acre for each year 02 thereafter during the continuance of the lease; the rental for each year shall be credited 03 against the royalties as they accrue for that year; each lease shall provide that the 04 annual rental payment is subject to adjustment at intervals of not [NO] more than 20 05 years and adjustments shall be based on the current rates for properties similarly 06 situated. 07 * Sec. 6. AS 43.65.010(c) is amended to read: 08 (c) The license tax on mining is as follows: on [UPON] the net income of the 09 taxpayer from the property in the state, computed with allowable depletion, plus 10 royalty received in connection with mining property in the state 11 over $40,000 and not over $50,000 ............................................................... 3 percent 12 over $50,000 and not over $100,000 ......................................................... $1,500 plus 13 5 percent of the excess over $50,000 14 over $100,000 ............................................................................................ $4,000 15 (9) [7] percent of the excess over $100,000. 16 * Sec. 7. AS 43.65.030 is amended to read: 17 Sec. 43.65.030. Applications and [APPLICATION FOR] renewals; fees. 18 The fee for a mining license and for each renewal is $50. Application for renewal of 19 a mining license shall be made before January 1 [MAY 1] of each year. 20 * Sec. 8. AS 27.30.080 and AS 38.05.212(b)(2) are repealed. 21 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 APPLICABILITY. (a) The changes to the applicability of the exploration incentive 24 credit made in AS 27.30.030(a) and (b), as amended by secs. 1 and 2 of this Act, 25 AS 27.30.040, as amended by sec. 3 of this Act, AS 27.30.050, as amended by sec. 4 of this 26 Act, AS 38.05.150(d), as amended by sec. 5 of this Act, and the repeal of AS 27.30.080 and 27 AS 38.05.212(b)(2) by sec. 8 of this Act, apply to a royalty payment period beginning on or 28 after the effective date of sec. 1 of this Act. 29 (b) AS 43.65.010(c), as amended by sec. 6 of this Act, applies to net income of the 30 taxpayer from property in the state during a taxable year beginning on or after the effective 31 date of sec. 6 of this Act.
01 * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 TRANSITION. In administering the application of the exploration incentive credit 04 under AS 27.30, AS 27.30.030(b)(2) applies to an accounting under AS 27.30.030(b) for a 05 person who began mining production before the effective date of this section. 06 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 TRANSITION: REGULATIONS. The Department of Revenue and the Department of 09 Natural Resources may adopt regulations necessary to implement the changes made by this 10 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 11 before the effective date of the law implemented by the regulation. 12 * Sec. 12. Section 11 this Act takes effect immediately under AS 01.10.070(c). 13 * Sec. 13. Except as provided in sec. 12 of this Act, this Act takes effect July 1, 2016.