SB 242: "An Act providing income tax credits for geothermal resource exploration and development."
00 SENATE BILL NO. 242 01 "An Act providing income tax credits for geothermal resource exploration and 02 development." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 43.20 is amended by adding a new section to article 1 to read: 05 Sec. 43.20.046. Geothermal resource tax credit. (a) In addition to any other 06 credit authorized to the person by this chapter, a person may take a credit against the 07 tax due under this chapter for geothermal resource exploration and development as 08 provided by this section. 09 (b) A person is eligible for a geothermal resource exploration credit for 10 qualified exploration expenditures incurred after June 30, 2008, and before July 1, 11 2018, in the amount of 50 percent of the qualified exploration expenditures incurred 12 for exploration for a geothermal resource owned by the state and 25 percent of the 13 eligible exploration expenditures for a geothermal resource not owned by the state, 14 except that the total amount of the geothermal resource exploration credit for a single
01 exploration project may not exceed $20,000,000. An unused geothermal resource 02 exploration credit may not be carried forward for more than the greater of 03 (1) five years immediately following the year in which the qualified 04 exploration expenditure was incurred; or 05 (2) if the geothermal resource first generates gross income in the five- 06 year period in (1) of this subsection, seven years immediately following the year in 07 which the geothermal resource first generates gross income. 08 (c) A person is eligible for a geothermal resource development credit in the 09 amount of 10 percent of the qualified development expenditures incurred to develop a 10 geothermal resource. An unused geothermal resource credit may not be carried 11 forward for more than seven years immediately following the year in which the 12 geothermal resource is first used to generate gross income. 13 (d) A credit under (b) or (c) of this section 14 (1) may not be applied against more than 50 percent of the person's tax 15 liability under this chapter for a tax year; 16 (2) may be transferred to a person who is a successor in interest in the 17 geothermal resource project that resulted from the exploration qualifying for an 18 exploration credit under (b) of this section or qualifying for a development credit 19 under (c) of this section. 20 (e) In this section, 21 (1) "geothermal resource" has the meaning given to "geothermal 22 resources" in AS 38.05.965; 23 (2) "qualified development expenditure" means an expenditure 24 (A) to develop a known geothermal resource; and 25 (B) that is reasonable and necessary 26 (i) to acquire, lease, or rent real property, including an 27 expenditure for engineering services, surveying, title insurance, 28 recording fees, legal services, site improvements, site restoration, 29 access roads, and fencing; 30 (ii) for the construction of the facility to develop and 31 use the geothermal resource, including an expenditure for drilling
01 development wells; materials; labor; travel and transportation related to 02 facility design; and the costs of startup, commissioning, and testing; 03 (iii) for equipment used in the operation of the facility; 04 (iv) for safety measures and environmental protection; 05 (v) for financial and legal services related to obtaining 06 licenses and permits and preparing an environmental impact statement; 07 (vi) for capitalized interest during the construction 08 period; 09 (3) "qualified exploration expenditure" means an expenditure 10 (A) to explore a previously unknown geothermal resource; and 11 (B) that is reasonable and necessary for goods, services, or 12 rental of personal property required for the surface preparation, drilling, and 13 assessment of the commercial potential of a geothermal resource.