HB 4005: "An Act relating to the mining license tax; relating to the exploration incentive credit; relating to mining license application, renewal, and fees; and providing for an effective date."
00 HOUSE BILL NO. 4005 01 "An Act relating to the mining license tax; relating to the exploration incentive credit; 02 relating to mining license application, renewal, and fees; and providing for an effective 03 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 43.65.010(a) is amended to read: 20 (a) A person prosecuting or attempting to prosecute, or engaging in the 21 business of mining in the state shall obtain a license from the department. All new 22 mining operations are exempt from the tax levied by this chapter for two [THREE 23 AND ONE-HALF] years after production begins. 24 * Sec. 6. AS 43.65.010(c) is amended to read: 25 (c) The license tax on mining is as follows: on [UPON] the net income of the 26 taxpayer from the property in the state, computed with allowable depletion, plus 27 royalty received in connection with mining property in the state 28 over $40,000 and not over $50,000 ............................................................... 3 percent 29 over $50,000 and not over $100,000 ......................................................... $1,500 plus 30 5 percent of the excess over $50,000 31 over $100,000 ............................................................................................. $4,000
01 9  percent of the excess over $100,000. 02 * Sec. 7. AS 43.65.030 is amended to read: 03 Sec. 43.65.030. Applications and [APPLICATION FOR] renewals; fees. 04 The fee for a mining license and for each renewal is $50. Application for renewal of 05 a mining license shall be made before January 1 [MAY 1] of each year. 06 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 APPLICABILITY. (a) The changes to the applicability of the exploration incentive 09 credit made in AS 27.30.030(a) and (b), as amended by secs. 1 and 2 of this Act, 10 AS 27.30.040, as amended by sec. 3 of this Act, and AS 27.30.050, as amended by sec. 4 of 11 this Act, apply to a royalty payment period beginning on or after the effective date of sec. 1 of 12 this Act. 13 (b) AS 43.65.010(a), as amended by sec. 5 of this Act, applies to a mining operation 14 that begins production on or after the effective date of sec. 5 of this Act. 15 (c) AS 43.65.010(c), as amended by sec. 6 of this Act, applies to net income of the 16 taxpayer from property in the state during a taxable year that begins on or after the effective 17 date of sec. 6 of this Act. 18 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 TRANSITION. In administering the application of the exploration incentive credit 21 under AS 27.30, AS 27.30.030(b)(2), as that subsection read on June 30, 2016, applies to an 22 accounting under AS 27.30.030(b) for a person who began mining production before the 23 effective date of this Act. 24 * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 TRANSITION: REGULATIONS. The Department of Revenue and the Department of 27 Natural Resources may adopt regulations necessary to implement the changes made by this 28 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 29 before the effective date of the law implemented by the regulation. 30 * Sec. 11. Section 10 this Act takes effect immediately under AS 01.10.070(c). 31 * Sec. 12. Except as provided in sec. 11 of this Act, this Act takes effect July 1, 2016.