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25th Legislature(2007-2008)

Bill Text 25th Legislature


00                      CS FOR HOUSE BILL NO. 2001(RES)                                                                    
01 "An Act relating to the production tax on oil and gas and to conservation surcharges on                                 
02 oil; providing a limit on the amount of tax that may be levied on the production of                                     
03 certain gas that is produced outside of the Cook Inlet sedimentary basin and south of 68                                
04 degrees North latitude; providing a penalty for the underpayment of an installment                                      
05 payment of the production tax on oil and gas; relating to the sharing between agencies                                  
06 of certain information relating to the production tax and to oil and gas or gas only                                    
07 leases; expanding the period in which the Department of Revenue may assess the                                          
08 amount of oil and gas production tax and conservation surcharges; amending the State                                    
09 Personnel Act to place in the exempt service certain state oil and gas auditors and their                               
10 immediate supervisors; establishing an oil and gas tax credit fund and authorizing                                      
11 payment from that fund; providing for retroactive application of certain statutory and                                  
12 regulatory provisions relating to the production tax on oil and gas and conservation                                    
01 surcharges on oil; making conforming amendments; and providing for an effective                                         
02 date."                                                                                                                  
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
05 to read:                                                                                                                
06       LEGISLATIVE INTENT. (a) It is the intent of the legislature that provisions of this                               
07 Act                                                                                                                     
08            (1)  ensure a fair and equitable means of assessing and taxing Alaska's oil and                              
09 gas resources;                                                                                                          
10            (2)  encourage the availability to Alaska's citizens of affordable gas produced,                             
11 transported, and consumed within the state; and                                                                         
12            (3)  confirm by clarification the longstanding interpretation of AS 43.05.260                                
13 by the Department of Revenue through enactment of AS 43.55.075(b) in sec. 46 of this Act,                               
14 relating to limitation of assessments for the production tax on oil and gas and conservation                            
15 surcharges on oil.                                                                                                      
16       (b)  It is the intent of the legislature that not less than half of the amount of money                           
17 received by the state as a result of the retroactivity of certain provisions under sec. 66(b) and                       
18 (c) of this Act that exceeds the amount the state would have received if those provisions had                           
19 not been made retroactive will be appropriated in equal amounts to                                                      
20            (1)  reduce the unfunded liability of the state's public employees' retirement                               
21 system and teachers' retirement system;                                                                                 
22            (2)  the public education fund (AS 14.17.300).                                                               
23       (c)  It is the intent of the legislature that any savings realized by a taxpayer on the                           
24 production of gas outside of the Cook Inlet sedimentary basin as a result of the addition of                            
25 AS 43.55.011(p) by sec. 20 of this Act and the amendment to AS 43.55.160(a) by sec. 50 of                               
26 this Act will be passed on to the ultimate consumer.                                                                  
27    * Sec. 2. AS 38.05.035(a) is amended to read:                                                                      
28            (a)  The director shall                                                                                      
29                 (1)  have general charge and supervision of the division and may                                        
30       exercise the powers specifically delegated to the director; the director may employ                           
01       and fix the compensation of assistants and employees necessary for the operations of                              
02       the division; the director [AND] is the certifying officer of the division, with the                          
03       consent of the commissioner, and may approve vouchers for disbursements of money                                  
04       appropriated to the division;                                                                                     
05                 (2)  manage, inspect, and control state land and improvements on it                                     
06       belonging to the state and under the jurisdiction of the division;                                                
07                 (3)  execute laws, rules, regulations, and orders adopted by the                                        
08       commissioner;                                                                                                     
09                 (4)  prescribe application procedures and practices for the sale, lease,                                
10       or other disposition of available land, resources, property, or interest in them;                                 
11                 (5)  prescribe fees or service charges, with the consent of the                                         
12       commissioner, for any public service rendered;                                                                    
13                 (6)  under the conditions and limitations imposed by law and the                                        
14       commissioner, issue deeds, leases, or other conveyances disposing of available land,                          
15       resources, property, or any interests in them;                                                                
16                 (7)  have jurisdiction over state land, except that land acquired by the                                
17       Alaska World War II Veterans Board and the Agricultural Loan Board or the                                         
18       departments or agencies succeeding to their respective functions through foreclosure                              
19       or default; to this end, the director possesses the powers and, with the approval of the                      
20       commissioner, shall perform the duties necessary to protect the state's rights and                                
21       interest in state land, including the taking of all necessary action to protect and                               
22       enforce the state's contractual or other property rights;                                                         
23                 (8)  [REPEALED                                                                                          
24                 (9)]  maintain the [SUCH] records [AS] the commissioner considers                                   
25       necessary, administer oaths, and do all things incidental to the authority imposed; the                           
26       following records and files shall be kept confidential upon request of the person                                 
27       supplying the information:                                                                                        
28                      (A)  the name of the person nominating or applying for the                                         
29            sale, lease, or other disposal of land by competitive bidding;                                               
30                      (B)  before the announced time of opening, the names of the                                        
31            bidders and the amounts of the bids;                                                                         
01                      (C)  all geological, geophysical, and engineering data supplied,                                   
02            whether or not concerned with the extraction or development of natural                                       
03            resources;                                                                                                   
04                      (D)  except as provided in AS 38.05.036, cost data and                                             
05            financial information submitted in support of applications, bonds, leases, and                               
06            similar items;                                                                                               
07                      (E)  applications for rights-of-way or easements;                                                  
08                      (F)  requests for information or applications by public agencies                                   
09            for land that [WHICH] is being considered for use for a public purpose;                                  
10                 (9) [(10)]  account for the fees, licenses, taxes, or other money                                   
11       received in the administration of this chapter including the sale or leasing of land,                             
12       identify their source, and promptly transmit them to the proper fiscal department after                           
13       crediting them to the proper fund; receipts from land application filing fees and                                 
14       charges for copies of maps and records shall be deposited immediately in the general                              
15       fund of the state by the director;                                                                                
16                 (10) [(11)]  select and employ or obtain at reasonable compensation                                 
17       cadastral, appraisal, or other professional personnel the director considers necessary                            
18       for the proper operation of the division;                                                                         
19                 (11) [(12)]  be the certifying agent of the state to select, accept, and                            
20       secure by whatever action is necessary in the name of the state, by deed, sale, gift,                             
21       devise, judgment, operation of law, or other means any land, of whatever nature or                                
22       interest, available to the state; and be the certifying agent of the state, to select,                            
23       accept, or secure by whatever action is necessary in the name of the state any land, or                           
24       title or interest to land available, granted, or subject to being transferred to the state                        
25       for any purpose;                                                                                                  
26                 (12)  on request, furnish records, files, and other information                                     
27       related to the administration of AS 38.05.180 to the Department of Revenue for                                
28       use in forecasting state revenue under or administering AS 43.55, whether or not                              
29       those records, files, and other information are required to be kept confidential                              
30       under (8) of this subsection; in the case of records, files, or other information                             
31       required to be kept confidential under (8) of this subsection, the Department of                              
01       Revenue shall maintain the confidentiality that the Department of Natural                                     
02       Resources is required to extend to records, files, and other information under (8)                            
03       of this subsection                                                                                            
04                 [(13)  REPEALED                                                                                         
05                 (14)  REPEALED].                                                                                        
06    * Sec. 3. AS 38.05.036(b) is amended to read:                                                                      
07            (b)  The Department of Revenue may obtain from the department information                                    
08       relating to royalty and net profits payments and to exploration incentive credits under                           
09       this chapter or under AS 41.09, whether or not that information is confidential. The                              
10       Department of Revenue may use the information in carrying out its functions and                                   
11       responsibilities under AS 43, and shall hold that information confidential to the extent                          
12       required by an agreement with the department or by AS 38.05.035(a)(8)                                         
13       [AS 38.05.035(a)(9)], AS 41.09.010(d), or AS 43.05.230.                                                           
14    * Sec. 4. AS 38.05.036(f) is amended to read:                                                                      
15            (f)  Except as otherwise provided in this section or in connection with official                             
16       investigations or proceedings of the department, it is unlawful for a current or former                           
17       officer, employee, or agent of the state to divulge information obtained by the                                   
18       department as a result of an audit under this section that is required by an agreement                            
19       with the department or by AS 38.05.035(a)(8) [AS 38.05.035(a)(9)] or                                          
20       AS 41.09.010(d) to be kept confidential.                                                                          
21    * Sec. 5. AS 38.05.036(g) is amended to read:                                                                      
22            (g)  Nothing in this section prohibits the publication of statistics in a manner                             
23       that maintains the confidentiality of information to the extent required by an                                    
24       agreement with the department or by AS 38.05.035(a)(8) [AS 38.05.035(a)(9)] or                                
25       AS 41.09.010(d).                                                                                                  
26    * Sec. 6. AS 38.05.123(f) is amended to read:                                                                      
27            (f)  As part of the timber sale negotiations authorized by this section, the                                 
28       commissioner may require a prospective purchaser negotiating a timber sale contract                               
29       to submit financial and technical data that demonstrates that the requirements of this                            
30       section have been or will be met. Upon the prospective purchaser's request, the                                   
31       commissioner shall keep data provided by the purchaser confidential in accordance                                 
01       with the requirements of AS 38.05.035(a)(8) [AS 38.05.035(a)(9)].                                             
02    * Sec. 7. AS 38.05.133(e) is amended to read:                                                                      
03            (e)  The commissioner may make a written request to a prospective licensee                                   
04       for additional information on the prospective licensee's proposal. The commissioner                               
05       shall keep confidential information described in AS 38.05.035(a)(8)                                           
06       [AS 38.05.035(a)(9)] that is voluntarily provided if the prospective licensee has made                            
07       a written request that the information remain confidential.                                                       
08    * Sec. 8. AS 38.05.180(j) is amended to read:                                                                      
09            (j)  The commissioner                                                                                        
10                 (1)  may provide for modification of royalty on individual leases,                                      
11       leases unitized as described in (p) of this section, leases subject to an agreement                               
12       described in (s) or (t) of this section, or interests unitized under AS 31.05                                     
13                      (A)  to allow for production from an oil or gas field or pool if                                   
14                           (i)  the oil or gas field or pool has been sufficiently                                       
15                 delineated to the satisfaction of the commissioner;                                                     
16                           (ii)  the field or pool has not previously produced oil or                                    
17                 gas for sale; and                                                                                       
18                           (iii)  oil or gas production from the field or pool would                                     
19                 not otherwise be economically feasible;                                                                 
20                      (B)  to prolong the economic life of an oil or gas field or pool                                   
21            as per barrel or barrel equivalent costs increase or as the price of oil or gas                              
22            decreases, and the increase or decrease is sufficient to make future production                              
23            no longer economically feasible; or                                                                          
24                      (C)  to reestablish production of shut-in oil or gas that would                                    
25            not otherwise be economically feasible;                                                                      
26                 (2)  may not grant a royalty modification unless the lessee or lessees                                  
27       requesting the change make a clear and convincing showing that a modification of                                  
28       royalty meets the requirements of this subsection and is in the best interests of the                             
29       state;                                                                                                            
30                 (3)  shall provide for an increase or decrease or other modification of                                 
31       the state's royalty share by a sliding scale royalty or other mechanism that shall be                             
01       based on a change in the price of oil or gas and may also be based on other relevant                              
02       factors such as a change in production rate, projected ultimate recovery, development                             
03       costs, and operating costs;                                                                                       
04                 (4)  may not grant a royalty reduction for a field or pool                                              
05                      (A)  under (1)(A) of this subsection if the royalty modification                                   
06            for the field or pool would establish a royalty rate of less than five percent in                            
07            amount or value of the production removed or sold from a lease or leases                                     
08            covering the field or pool;                                                                                  
09                      (B)  under (1)(B) or (1)(C) of this subsection if the royalty                                      
10            modification for the field or pool would establish a royalty rate of less than                               
11            three percent in amount or value of the production removed or sold from a                                    
12            lease or leases covering the field or pool;                                                                  
13                 (5)  may not grant a royalty reduction under this subsection without                                    
14       including an explicit condition that the royalty reduction is not assignable without the                          
15       prior written approval, which may not be unreasonably withheld, by the                                            
16       commissioner; the commissioner shall, in the preliminary and final findings and                                   
17       determinations, set out the conditions under which the royalty reduction may be                                   
18       assigned;                                                                                                         
19                 (6)  shall require the lessee or lessees to submit, with the application                                
20       for the royalty reduction, financial and technical data that demonstrate that the                                 
21       requirements of this subsection are met; the commissioner                                                         
22                      (A)  may require disclosure of only the financial and technical                                    
23            data related to development, production, and transportation of oil and gas or                                
24            gas only from the field or pool that are reasonably available to the applicant;                              
25            and                                                                                                          
26                      (B)  shall keep the data confidential under AS 38.05.035(a)(8)                                 
27            [AS 38.05.035(a)(9)] at the request of the lessee or lessees making application                              
28            for the royalty reduction; the confidential data may be disclosed by the                                     
29            commissioner to legislators and to the legislative auditor and as directed by                                
30            the chair or vice-chair of the Legislative Budget and Audit Committee to the                                 
31            director of the division of legislative finance, the permanent employees of                                  
01            their respective divisions who are responsible for evaluating a royalty                                      
02            reduction, and to agents or contractors of the legislative auditor or the                                    
03            legislative finance director who are engaged under contract to evaluate the                                  
04            royalty reduction, if they sign an appropriate confidentiality agreement;                                    
05                 (7)  may                                                                                                
06                      (A)  require the lessee or lessees making application for the                                      
07            royalty reduction under (1)(A) of this subsection to pay for the services of an                              
08            independent contractor, selected by the lessee or lessees from a list of                                     
09            qualified consultants compiled by the commissioner, to evaluate hydrocarbon                                  
10            development, production, transportation, and economics and to assist the                                     
11            commissioner in evaluating the application and financial and technical data;                                 
12            if, under this subparagraph, the commissioner requires payment for the                                       
13            services of an independent contractor, the total cost of the services to be paid                             
14            for by the lessee or lessees may not exceed $150,000 for each application, and                               
15            the commissioner shall determine the relevant scope of the work to be                                        
16            performed by the contractor; selection of an independent contractor under this                               
17            subparagraph is not subject to AS 36.30;                                                                     
18                      (B)  with the mutual consent of the lessee or lessees making                                       
19            application for the royalty reduction under (1)(B) or (1)(C) of this subsection,                             
20            request payment for the services of an independent contractor, selected from a                               
21            list of qualified consultants to evaluate hydrocarbon development, production,                               
22            transportation, and economics by the commissioner to assist the commissioner                                 
23            in evaluating the application and financial and technical data; if, under this                               
24            subparagraph, the commissioner requires payment for the services of an                                       
25            independent contractor, the total cost of the services that may be paid for by                               
26            the lessee or lessees may not exceed $150,000 for each application, and the                                  
27            commissioner shall determine the relevant scope of the work to be performed                                  
28            by the contractor; selection of an independent contractor under this                                         
29            subparagraph is not subject to AS 36.30;                                                                     
30                 (8)  shall make and publish a preliminary findings and determination                                    
31       on the royalty reduction application, give reasonable public notice of the preliminary                            
01       findings and determination, and invite public comment on the preliminary findings                                 
02       and determination during a 30-day period for receipt of public comment;                                           
03                 (9)  shall offer to appear before the Legislative Budget and Audit                                      
04       Committee, on a day that is not earlier than 10 days and not later than 20 days after                             
05       giving public notice under (8) of this subsection, to provide the committee a review of                           
06       the commissioner's preliminary findings and determination on the royalty reduction                                
07       application and administrative process; if the Legislative Budget and Audit                                       
08       Committee accepts the commissioner's offer, the committee shall give notice of the                                
09       committee's meeting to all members of the legislature;                                                            
10                 (10)  shall make copies of the preliminary findings and determination                                   
11       available to                                                                                                      
12                      (A)  the presiding officer of each house of the legislature;                                       
13                      (B)  the chairs of the legislature's standing committees on                                        
14            resources; and                                                                                               
15                      (C)  the chairs of the legislature's special committees on oil and                                 
16            gas, if any;                                                                                                 
17                 (11)  shall, within 30 days after the close of the public comment period                                
18       under (8) of this subsection,                                                                                     
19                      (A)  prepare a summary of the public response to the                                               
20            commissioner's preliminary findings and determination;                                                       
21                      (B)  make a final findings and determination; the                                                  
22            commissioner's final findings and determination prepared under this                                          
23            subparagraph regarding a royalty reduction is final and not appealable to the                                
24            court;                                                                                                       
25                      (C)  transmit a copy of the final findings and determination to                                    
26            the lessee;                                                                                                  
27                      (D)  with the applicant's consent, amend the applicant's lease or                                  
28            unitization agreement consistent with the commissioner's final decision; and                                 
29                      (E)  make copies of the final findings and determination                                           
30            available to each person who submitted comment under (8) of this subsection                                  
31            and who has filed a request for the copies;                                                                  
01                 (12)  is not limited by the provisions of AS 38.05.134(3) or (f) of this                                
02       section in the commissioner's determination under this subsection.                                                
03    * Sec. 9. AS 38.05.275(c) is amended to read:                                                                      
04            (c)  Subsection (b) of this section may not be construed to limit the director in                            
05       the exercise of authority granted by AS 38.05.035(a)(11) [AS 38.05.035(a)(12)].                               
06    * Sec. 10. AS 39.25.110 is amended by adding a new paragraph to read:                                              
07                 (42)  oil and gas auditors performing                                                                   
08                      (A)  production tax audits, and their immediate supervisors, in                                    
09            the Department of Revenue;                                                                                   
10                      (B)  royalty audits, including net profit share audits, and their                                  
11            immediate supervisors, in the Department of Natural Resources.                                               
12    * Sec. 11. AS 41.09.010(d) is amended to read:                                                                     
13            (d)  Data derived from drilling a stratigraphic test well or exploratory well that                           
14       is provided to the commissioner under (c)(3) of this section shall be kept confidential                           
15       for 24 months after receipt by the commissioner unless the owner of the well gives                                
16       written permission to the state to release the well data at an earlier date, and,                                 
17       notwithstanding AS 31.05.035(c), confidentiality may not be extended beyond 24                                    
18       months. The provisions of AS 38.05.035(a)(8)(C) [AS 38.05.035(a)(9)(C)] apply to                              
19       other data provided to the commissioner under (c)(3) of this section, except that the                             
20       commissioner, under appropriate confidentiality provisions and without preference or                              
21       discrimination, may display to all interested third parties, but may not distribute or                            
22       transfer in hard copy or electronic form, those data with respect to all land if the                              
23       commissioner determines that the limited disclosure is necessary to further the                                   
24       interest of the state in evaluating or developing its land.                                                       
25    * Sec. 12. AS 43.05.230(a) is amended to read:                                                                     
26            (a)  It is unlawful for a current or former officer, employee, or agent of the                               
27       state to divulge the amount of income or the particulars set out or disclosed in a report                         
28       or return made under this title, except                                                                           
29                 (1)  in connection with official investigations or proceedings of the                                   
30       department, whether judicial or administrative, involving taxes due under this title;                             
31                 (2)  in connection with official investigations or proceedings of the                                   
01       child support enforcement agency, whether judicial or administrative, involving child                             
02       support obligations imposed or imposable under AS 25 or AS 47;                                                    
03                 (3)  as provided in AS 38.05.036 pertaining to audit functions of the                                   
04       Department of Natural Resources;                                                                                  
05                 (4)  as provided in AS 43.05.405 - 43.05.499; and                                                       
06                 (5)  as otherwise provided in this section or AS 43.55.890.                                         
07    * Sec. 13. AS 43.05.230(h) is amended to read:                                                                     
08            (h)  The commissioner shall, upon request, furnish to the Department of                                      
09       Natural Resources copies of tax returns, reports, and other documents filed under                             
10       AS 43.55 or AS 43.65, and the Department of Revenue's determinations and                                      
11       workpapers under those chapters. The Department of Natural Resources shall                                    
12       maintain the confidentiality that the Department of Revenue is required to extend to                              
13       the returns, reports, documents, determinations, and workpapers furnished to the                                  
14       Department of Natural Resources under this subsection.                                                            
15    * Sec. 14. AS 43.05.260(a) is amended to read:                                                                     
16            (a)  Except as provided in (c) of this section, [AND] AS 43.20.200(b), and                           
17       AS 43.55.075, the amount of a tax imposed by this title must be assessed within three                         
18       years after the return was filed, whether or not a return was filed on or after the date                          
19       prescribed by law. If the tax is not assessed before the expiration of the applicable                         
20       [THREE-YEAR] period, proceedings may not be instituted in court for the collection                                
21       of the tax.                                                                                                       
22    * Sec. 15. AS 43.55.011(e) is amended to read:                                                                     
23            (e)  There is levied on the producer of oil or gas a tax for all oil and gas                                 
24       produced each calendar year [MONTH] from each lease or property in the state, less                            
25       any oil and gas the ownership or right to which is exempt from taxation or constitutes                            
26       a landowner's royalty interest. Except as otherwise provided under (j) and (k) of this                            
27       section, the tax is equal to the greater of 25 [22.5] percent of the annual production                    
28       tax value of the taxable oil and gas as calculated under AS 43.55.160, or the                                     
29       minimum tax determined under (f) of this section.                                                                 
30    * Sec. 16. AS 43.55.011(j) is amended to read:                                                                     
31            (j)  For a calendar year before 2022, the total tax levied by (e) and (o) [(g)] of                       
01       this section on gas produced from a lease or property in the Cook Inlet sedimentary                               
02       basin may not exceed                                                                                              
03                 (1)  for a lease or property that first commenced commercial                                            
04       production of gas before April 1, 2006, the product obtained by multiplying (A) the                               
05       amount of taxable gas produced during the calendar year from the lease or property,                               
06       times (B) the average rate of tax that was imposed under this chapter on taxable gas                              
07       produced from the lease or property for the 12-month period ending on March 31,                                   
08       2006, times (C) the quotient obtained by dividing the total gross value at the point of                           
09       production of the taxable gas produced from the lease or property during the 12-                                  
10       month period ending on March 31, 2006, by the total amount of that gas;                                           
11                 (2)  for a lease or property that first commences commercial                                            
12       production of gas after March 31, 2006, the product obtained by multiplying (A) the                               
13       amount of taxable gas produced during the calendar year from the lease or property,                               
14       times (B) the average rate of tax that was imposed under this chapter on taxable gas                              
15       produced from all leases or properties in the Cook Inlet sedimentary basin for the 12-                            
16       month period ending on March 31, 2006, times (C) the average prevailing value for                                 
17       gas delivered in the Cook Inlet area for the 12-month period ending March 31, 2006,                               
18       as determined by the department under AS 43.55.020(f).                                                            
19    * Sec. 17. AS 43.55.011(k) is amended to read:                                                                     
20            (k)  For a calendar year before 2022, the total tax levied by (e) and (o) [(g)] of                       
21       this section on oil produced from a lease or property in the Cook Inlet sedimentary                               
22       basin may not exceed                                                                                              
23                 (1)  for a lease or property that first commenced commercial                                            
24       production of oil before April 1, 2006, the product obtained by multiplying (A) the                               
25       amount of taxable oil produced during the calendar year from the lease or property,                               
26       times (B) the average rate of tax that was imposed under this chapter on taxable oil                              
27       produced from the lease or property for the 12-month period ending on March 31,                                   
28       2006, times (C) the quotient obtained by dividing the total gross value at the point of                           
29       production of the taxable oil produced from the lease or property during the 12-month                             
30       period ending on March 31, 2006, by the total amount of that oil;                                                 
31                 (2)  for a lease or property that first commences commercial                                            
01       production of oil after March 31, 2006, the product obtained by multiplying (A) the                               
02       amount of taxable oil produced during the calendar year from the lease or property,                               
03       times (B) the average rate of tax that was imposed under this chapter on taxable oil                              
04       produced from all leases or properties in the Cook Inlet sedimentary basin for the 12-                            
05       month period ending on March 31, 2006, times (C) the average prevailing value for                                 
06       oil produced and delivered in the Cook Inlet area for the 12-month period ending on                               
07       March 31, 2006, as determined by the department under AS 43.55.020(f).                                            
08    * Sec. 18. AS 43.55.011(l) is amended to read:                                                                     
09            (l)  When a limitation under (j) or (k) of this section on the tax levied by (e)                             
10       and (o) [(g)] of this section has the effect of reducing the producer's tax on oil or gas                     
11       produced from a lease or property below the amount of tax that would be levied in the                             
12       absence of that limitation, the amount of the reduction is applied first against the tax                          
13       levied by (o) [(g)] of this section. However, that tax may not be reduced below zero.                         
14    * Sec. 19. AS 43.55.011(m) is amended to read:                                                                     
15            (m)  Notwithstanding any contrary provision of AS 38.05.180(i),                                              
16       AS 41.09.010, AS 43.20.043, AS 43.55.024, or 43.55.025, tax credits under                                         
17       AS 38.05.180(i), AS 41.09.010, AS 43.20.043, AS 43.55.024, and 43.55.025 that are                                 
18       allocated to gas produced from leases or properties in the Cook Inlet sedimentary                                 
19       basin and that are available to be applied against a tax levied by (e) of this section for                    
20       [ON] gas produced from leases or properties in the Cook Inlet sedimentary basin                                   
21       during a calendar year may be applied only against the tax levied by (e) of this section                          
22       for [ON] that gas. The amount by which the amount of tax credits that are allocated                           
23       to gas produced from leases or properties in the Cook Inlet sedimentary basin and that                            
24       the producer would otherwise be allowed to use for a later calendar year or transfer to                           
25       another person exceeds the amount of tax credits whose application would reduce the                               
26       tax levied by (e) of this section for [ON] that gas to zero, if any, is considered the                        
27       amount of excess tax credits, and the excess tax credits are subject to the following:                            
28                 (1)  for each lease or property for which a limitation under (j) or (k) of                              
29       this section on the tax levied by (e) and (o) [(g)] of this section has the effect of                         
30       reducing the producer's tax below the amount of tax that would be levied in the                                   
31       absence of that limitation, the producer shall calculate the amount of that reduction;                            
01                 (2)  the producer shall calculate the total of the reductions calculated                                
02       under (1) of this subsection for all affected leases or properties;                                               
03                 (3)  the producer shall reduce the amount of excess tax credits by the                                  
04       total calculated under (2) of this subsection, but not to less than zero;                                         
05                 (4)  any amount of excess tax credits remaining after reduction under                                   
06       (3) of this subsection may be used for a later calendar year, transferred to another                              
07       person, or applied against a tax levied for [ON] oil or gas produced from a lease or                          
08       property located anywhere in the state to the extent otherwise allowed under                                      
09       applicable law governing the tax credits.                                                                         
10    * Sec. 20. AS 43.55.011 is amended by adding new subsections to read:                                              
11            (o)  In addition to the tax levied under (e) of this section, for each month for                             
12       which the producer's average monthly production tax value of the taxable oil and gas                              
13       exceeds $30 for each BTU equivalent barrel, there is levied on the producer of oil or                             
14       gas a tax for all oil and gas produced that month from each lease or property in the                              
15       state, less any oil and gas the ownership or right to which is exempt from taxation or                            
16       constitutes a landowner's royalty interest. Except as otherwise provided under (j) and                            
17       (k) of this section, the tax levied under this subsection is equal to the sum over all                            
18       months of the calendar year of the amount calculated under this subsection. For each                              
19       month for which this subsection applies and for which the average monthly                                         
20       production tax value of the taxable oil and gas is                                                                
21                 (1)  not more than $40 for each BTU equivalent barrel, the tax is equal                                 
22       to 0.2 percent of the gross value at the point of production of the taxable oil and gas                           
23       for that month multiplied by the number that represents the difference between the                                
24       average production tax value for each BTU equivalent barrel of the taxable oil and                                
25       gas for that month and $30;                                                                                       
26                 (2)  more than $40 but not more than $50 for each BTU equivalent                                        
27       barrel, the tax is equal to two percent of the gross value at the point of production of                          
28       the taxable oil and gas for that month plus 0.3 percent of the gross value at the point                           
29       of production of the taxable oil and gas for that month multiplied by the number that                             
30       represents the difference between the average production tax value for each BTU                                   
31       equivalent barrel of the taxable oil and gas for that month and $40;                                              
01                 (3)  more than $50 but not more than $60 for each BTU equivalent                                        
02       barrel, the tax is equal to five percent of the gross value at the point of production of                         
03       the taxable oil and gas for that month plus 0.4 percent of the gross value at the point                           
04       of production of the taxable oil and gas for that month multiplied by the number that                             
05       represents the difference between the average production tax value for each BTU                                   
06       equivalent barrel of the taxable oil and gas for that month and $50; or                                           
07                 (4)  more than $60 for each BTU equivalent barrel, the tax is equal to                                  
08       nine percent of the gross value at the point of production of the taxable oil and gas for                         
09       that month plus 0.5 percent of the gross value at the point of production of the taxable                          
10       oil and gas for that month multiplied by the number that represents the difference                                
11       between the average production tax value for each BTU equivalent barrel of the                                    
12       taxable oil and gas for that month and $60.                                                                       
13            (p)  Notwithstanding other provisions of this section, for a calendar year                                   
14       before 2022, the tax levied under (e) and (o) of this section for each 1,000 cubic feet                           
15       of gas for gas produced from a lease or property outside the Cook Inlet sedimentary                               
16       basin and used in the state may not exceed the amount of tax for each 1,000 cubic feet                            
17       of gas that is determined under (j)(2) of this section.                                                           
18    * Sec. 21. AS 43.55.020(a) is amended to read:                                                                     
19            (a)  For a calendar year, a producer subject to tax under AS 43.55.011(e), (f),                              
20       [(g), OR] (i), or (o), and notwithstanding that a producer may be liable for the tax                          
21       under AS 43.55.011(f) rather than the tax under AS 43.55.011(e), shall pay the tax as                             
22       follows:                                                                                                          
23                 (1)  an installment payment of the estimated tax levied by                                              
24       AS 43.55.011(e) or (f), net of any tax credits applied as allowed by law, is due for                              
25       each month of the calendar year on the last day of the following month; the amount of                             
26       the installment payment is the sum of the amounts calculated under (2) and (3) of this                            
27       subsection, but not less than zero;                                                                               
28                 (2)  the first of the two amounts used to calculate the installment                                     
29       payment for a month under (1) of this subsection is equal to the remainder obtained                               
30       by subtracting                                                                                                    
31                      (A)  1/12 of the tax credits that are allowed by law to be                                         
01            applied against the tax levied by AS 43.55.011(e) for the calendar year; from                                
02                      (B)  the total of the monthly production values calculated                                         
03            under [IN THE MANNER PROVIDED IN] AS 43.55.160(a)(2) of all oil and                                      
04            gas taxable under AS 43.55.011(e) and produced by the producer from leases                                   
05            or properties in the state during the month, multiplied by 25 [22.5] percent;                            
06                 (3)  the second of the two amounts used to calculate the installment                                    
07       payment for a month under (1) of this subsection is the amount calculated for the                                 
08       month under AS 43.55.011(o) [AS 43.55.011(g)];                                                                
09                 (4)  an installment payment of the estimated tax levied by                                              
10       AS 43.55.011(i) for each lease or property is due for each month of the calendar year                             
11       on the last day of the following month; the amount of the installment payment is the                              
12       sum of                                                                                                            
13                      (A)  the applicable percentage rate for oil provided under                                         
14            AS 43.55.011(i), multiplied by the gross value at the point of production of                                 
15            the oil taxable under AS 43.55.011(i) and produced from the lease or property                                
16            during the month; plus                                                                                       
17                      (B)  the applicable percentage rate for gas provided under                                         
18            AS 43.55.011(i), multiplied times the gross value at the point of production of                              
19            the gas taxable under AS 43.55.011(i) and produced from the lease or property                                
20            during the month;                                                                                            
21                 (5)  any amount of tax levied by AS 43.55.011(e), (f), (i), and (o)                                 
22       [AS 43.55.011(e) - (g) AND (i)], net of any credits applied as allowed by law, that                               
23       exceeds the total of the amounts due as installment payments of estimated tax is due                              
24       on March 31 of the year following the calendar year of production.                                                
25    * Sec. 22. AS 43.55.020(d) is amended to read:                                                                     
26            (d)  In making settlement with the royalty owner for oil and gas that is taxable                             
27       under AS 43.55.011, the producer may deduct the amount of the tax paid on taxable                                 
28       royalty oil and gas, or may deduct taxable royalty oil or gas equivalent in value at the                          
29       time the tax becomes due to the amount of the tax paid. If the total deductions of                                
30       installment payments of estimated tax for a calendar year exceed the actual tax for                               
31       that calendar year, the producer shall, before April 1 of the following year, refund the                          
01       excess to the royalty owner. Unless otherwise agreed between the producer and the                                 
02       royalty owner, the amount of the tax paid under AS 43.55.011(e), (f), and (o)                                 
03       [AS 43.55.011(e) - (g)] on taxable royalty oil and gas for a calendar year, other than                            
04       oil and gas the ownership or right to which constitutes a landowner's royalty interest,                           
05       is considered to be the gross value at the point of production of the taxable royalty oil                         
06       and gas produced during the calendar year multiplied by a figure that is a quotient, in                           
07       which                                                                                                             
08                 (1)  the numerator is the producer's total tax liability under                                          
09       AS 43.55.011(e), (f), and (o) [AS 43.55.011(e) - (g)] for the calendar year of                                
10       production; and                                                                                                   
11                 (2)  the denominator is the total gross value at the point of production                                
12       of the oil and gas taxable under AS 43.55.011(e), (f), and (o) [AS 43.55.011(e) - (g)]                        
13       produced by the producer from all leases and properties in the state during the                                   
14       calendar year.                                                                                                    
15    * Sec. 23. AS 43.55.020(g) is amended to read:                                                                     
16            (g)  Notwithstanding any contrary provision of AS 43.05.225, an unpaid                                       
17       amount of an installment payment required under (a)(1) - (4) of this section that is not                          
18       paid when due bears interest (1) at the rate provided for an underpayment under 26                                
19       U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the date                                  
20       the installment payment is due until [THE] March 31 following the calendar year of                            
21       production [DESCRIBED IN AS 43.55.030(a)], and (2) as provided for a delinquent                               
22       tax under AS 43.05.225 after that March 31. Interest accrued under (1) of this                                    
23       subsection that remains unpaid after that March 31 is treated as an addition to tax that                          
24       bears interest under (2) of this subsection. An unpaid amount of tax due under (a)(5)                             
25       of this section that is not paid when due bears interest as provided for a delinquent tax                         
26       under AS 43.05.225.                                                                                               
27    * Sec. 24. AS 43.55.020(h) is amended to read:                                                                     
28            (h)  Notwithstanding any contrary provision of AS 43.05.280,                                                 
29                 (1)  an overpayment of an installment payment required under (a)(1) -                                   
30       (4) of this section bears interest at the rate provided for an overpayment under 26                               
31       U.S.C. 6621 (Internal Revenue Code), as amended, compounded daily, from the later                                 
01       of the date the installment payment is due or the date the overpayment is made, until                             
02       the earlier of                                                                                                    
03                      (A)  the date it is refunded or is applied to an underpayment; [,]                             
04            or                                                                                                           
05                      (B)  [THE] March 31 following the calendar year of                                             
06            production [DESCRIBED IN AS 43.55.030(a)];                                                               
07                 (2)  except as provided under (1) of this subsection, interest with                                     
08       respect to an overpayment is allowed only on any net overpayment of the payments                                  
09       required under (a) of this section that remains after the later of [THE] March 31                                 
10       following the calendar year of production [DESCRIBED IN AS 43.55.030(a)] or                                   
11       the date that the statement required under AS 43.55.030(a) is filed;                                              
12                 (3)  interest is allowed under (2) of this subsection only from a date                                  
13       that is 90 days after the later of [THE] March 31 following the calendar year of                              
14       production [DESCRIBED IN AS 43.55.030(a)] or the date that the statement                                      
15       required under AS 43.55.030(a) is filed; interest is not allowed if the overpayment                               
16       was refunded within the 90-day period;                                                                            
17                 (4)  interest under (2) and (3) of this subsection is paid at the rate and                              
18       in the manner provided in AS 43.05.225(1).                                                                        
19    * Sec. 25. AS 43.55.020 is amended by adding a new subsection to read:                                             
20            (i)  A civil penalty shall be added to the amount of an installment payment                                  
21       required under (a)(1) - (4) of this section if the full amount of the payment is not paid                         
22       by the date the payment is due. The penalty is equal to five percent of the difference                            
23       between the amount of the installment payment that was made timely and the amount                                 
24       of the installment payment required under (a)(1) - (4) of this section. If no part of the                         
25       required installment payment was made timely, the penalty is equal to five percent of                             
26       the installment payment required under (a)(1) - (4) of this section. The penalty is in                            
27       addition to the interest imposed under (g) of this section and a penalty added under                              
28       AS 43.05.220, if any.                                                                                             
29    * Sec. 26. AS 43.55.023(b) is amended to read:                                                                     
30            (b)  A producer or explorer may elect to take a tax credit in the amount of the                          
31       [20 PERCENT OF A] carried-forward annual loss multiplied by the nominal tax                                   
01       rate in AS 43.55.011(e). A credit under this subsection may be applied against a tax                          
02       due under AS 43.55.011(e). For purposes of this subsection,                                                       
03                 (1)  a carried-forward annual loss is the amount of a producer's or                                 
04       explorer's adjusted lease expenditures under AS 43.55.165 and 43.55.170 for a                                     
05       previous calendar year that was not deductible for that calendar year under                                       
06       AS 43.55.160(b) and (e); and                                                                                  
07                 (2)  "nominal tax rate" means the tax rate stated in                                                
08       AS 43.55.011(e) that is not the tax determined at the minimum tax rate that may                               
09       be applicable under AS 43.55.011(f).                                                                          
10    * Sec. 27. AS 43.55.023(d) is amended to read:                                                                     
11            (d)  Except as limited by (i) of this section, a person entitled to take a tax                               
12       credit under this section that wishes to transfer the unused credit to another person or                      
13       obtain a cash payment under AS 43.55.028 may apply to the department for a                                    
14       transferable tax credit certificate. An application under this subsection must be in a                            
15       form prescribed by the department and must include supporting information and                                     
16       documentation that the department reasonably requires. The department shall grant or                              
17       deny an application, or grant an application as to a lesser amount than that claimed                              
18       and deny it as to the excess, not later than 60 days after the latest of (1) March 31 of                          
19       the year following the calendar year in which the qualified capital expenditure or                                
20       carried-forward annual loss for which the credit is claimed was incurred; (2) if the                              
21       applicant is required under AS 43.55.030(a) to file a statement on or before March 31                             
22       of the year following the calendar year in which the qualified capital expenditures or                            
23       carried-forward annual loss for which the credit is claimed was incurred, the date the                            
24       statement required under AS 43.55.030(a) or (e) was filed; or (3) the date the                                
25       application was received by the department. If, based on the information then                                     
26       available to it, the department is reasonably satisfied that the applicant is entitled to a                       
27       credit, the department shall issue the applicant a transferable tax credit certificate for                        
28       the amount of the credit. A certificate issued under this subsection does not expire.                             
29    * Sec. 28. AS 43.55.023(g) is amended to read:                                                                     
30            (g)  The issuance of a transferable tax credit certificate under (d) of this                                 
31       section or the purchase of a certificate [ISSUANCE OF A CASH REFUND] under                                    
01       AS 43.55.028 [(f) OF THIS SECTION] does not limit the department's ability to later                           
02       audit a tax credit claim to which the certificate relates or to adjust the claim if the                           
03       department determines, as a result of the audit, that the applicant was not entitled to                           
04       the amount of the credit for which the certificate was issued. The tax liability of the                           
05       applicant under AS 43.55.011(e) and 43.55.017 - 43.55.180 is increased by the                                     
06       amount of the credit that exceeds that to which the applicant was entitled, or the                                
07       applicant's available valid outstanding credits applicable against the tax levied by                              
08       AS 43.55.011(e) are reduced by that amount. If the applicant's tax liability is                                   
09       increased under this subsection, the increase bears interest under AS 43.05.225 from                              
10       the date the transferable tax credit certificate was issued. For purposes of this                                 
11       subsection, an applicant that is an explorer is considered a producer subject to the tax                          
12       levied by AS 43.55.011(e).                                                                                        
13    * Sec. 29. AS 43.55.023(i) is amended to read:                                                                     
14            (i)  For the purposes of this section,                                                                       
15                 (1)  a producer's or explorer's transitional investment expenditures are                                
16       the sum of the expenditures the producer or explorer incurred after March 31, 2003                            
17       [2001], and before April 1, 2006, that would be qualified capital expenditures if they                            
18       were incurred after March 31, 2006, less the sum of the payments or credits the                                   
19       producer or explorer received before April 1, 2006, for the sale or other transfer of                             
20       assets, including geological, geophysical, or well data or interpretations, acquired by                           
21       the producer or explorer as a result of expenditures the producer or explorer incurred                            
22       before April 1, 2006, that would be qualified capital expenditures, if they were                                  
23       incurred after March 31, 2006;                                                                                    
24                 (2)  a producer or explorer may elect to take a tax credit against a tax                                
25       due under AS 43.55.011(e) in the amount of 20 percent of the producer's or explorer's                             
26       transitional investment expenditures, but only to the extent that the amount does not                             
27       exceed 1/10 of the producer's or explorer's qualified capital expenditures that are                               
28       incurred during the calendar year for which the credit is taken;                                                  
29                 (3)  a producer or explorer may not take a tax credit for a transitional                                
30       investment expenditure                                                                                            
31                      (A)  for any calendar year after the later of                                                      
01                           (i)  2013; or                                                                                 
02                           (ii)  the sixth calendar year after the calendar year for                                     
03                 which the producer first applies a credit under this subsection against a                               
04                 tax due under AS 43.55.011(e), if the producer did not have                                             
05                 commercial production of oil or gas from a lease or property in the                                     
06                 state before April 1, 2006;                                                                             
07                      (B)  more than once; or                                                                            
08                      (C)  if a credit for that expenditure was taken under                                              
09            AS 38.05.180(i), AS 41.09.010, AS 43.20.043, or AS 43.55.025;                                                
10                 (4)  notwithstanding (d), (e), and (g) of this section, a producer or                                   
11       explorer may not transfer a tax credit or obtain a transferable tax credit certificate for                        
12       a transitional investment expenditure.                                                                            
13    * Sec. 30. AS 43.55.023 is amended by adding new subsections to read:                                              
14            (l)  A person that is exempt from taxation under this chapter may not apply for                              
15       a transferable tax credit certificate.                                                                            
16            (m)  Notwithstanding the limitation on the use of a transferable tax credit by a                             
17       transferee under (e) of this section and subject to appropriations made by law, if and                            
18       to the extent that purchase of transferable tax credits by the Alaska Retirement                                  
19       Management Board is authorized by law, the department shall issue a cash refund to                                
20       the Alaska Retirement Management Board for a transferable tax credit originally                                   
21       issued to a person under (d) of this section and purchased by the Alaska Retirement                               
22       Management Board.                                                                                                 
23    * Sec. 31. AS 43.55.025(a) is amended to read:                                                                     
24            (a)  Subject to the terms and conditions of this section, a credit against the                               
25       production tax levied by [DUE UNDER] AS 43.55.011(e) [OR (f)] is allowed for                                  
26       exploration expenditures that qualify under (b) of this section in an amount equal to                             
27       one of the following:                                                                                             
28                 (1)  30 [20] percent of the total exploration expenditures that qualify                             
29       only under (b) and (c) of this section;                                                                           
30                 (2)  30 [20] PERCENT of the total exploration expenditures [FOR                                     
31       WORK PERFORMED BEFORE JULY 1, 2007, AND] that qualify only under (b)                                              
01       and (d) of this section;                                                                                          
02                 (3)  40 percent of the total exploration expenditures that qualify under                                
03       (b), (c), and (d) of this section; or                                                                             
04                 (4)  40 percent of the total exploration expenditures that qualify only                                 
05       under (b) and (e) of this section.                                                                                
06    * Sec. 32. AS 43.55.025(b) is amended to read:                                                                     
07            (b)  To qualify for the production tax credit under (a) of this section, an                                  
08       exploration expenditure must be incurred for work performed [ON OR] after                                         
09       December 31, 2006 [JULY 1, 2003], and before July 1, 2016, [EXCEPT THAT AN                                    
10       EXPLORATION EXPENDITURE FOR A COOK INLET PROSPECT MUST BE                                                         
11       INCURRED FOR WORK PERFORMED ON OR AFTER JULY 1, 2005,] and                                                        
12                 (1)  may be for seismic or other geophysical exploration costs not                                  
13       connected with a specific well;                                                                                   
14                 (2)  if for an exploration well,                                                                        
15                      (A)  must be incurred by an explorer that holds an interest in                                     
16            the exploration well for which the production tax credit is claimed;                                         
17                      (B)  may be for either a [AN OIL OR GAS DISCOVERY]                                             
18            well that encounters an oil or gas deposit or a dry hole; [AND]                                          
19                      (C)  must be for a well that has been completed, suspended,                                    
20            or abandoned under AS 31.05.030 at the time the explorer claims the tax                                  
21            credit under (f) of this section; and                                                                    
22                      (D)  must be for goods, services, or rentals of personal                                       
23            property reasonably required for the surface preparation, drilling, casing,                                  
24            cementing, and logging of an exploration well, and, in the case of a dry hole,                               
25            for the expenses required for abandonment if the well is abandoned within 18                                 
26            months after the date the well was spudded;                                                                  
27                 (3)  may not be for [TESTING, STIMULATION, OR COMPLETION                                                
28       COSTS;] administration, supervision, engineering, or lease operating costs;                                       
29       geological or management costs; community relations or environmental costs;                                       
30       bonuses, taxes, or other payments to governments related to the well; costs arising                           
31       from gross negligence or violation of health, safety, or environmental statutes or                            
01       regulations; or other costs that are generally recognized as indirect costs or financing                      
02       costs; and                                                                                                        
03                 (4)  may not be incurred for an exploration well or seismic exploration                                 
04       that is included in a plan of exploration or a plan of development for any unit on or                         
05       before May 13, 2003.                                                                                          
06    * Sec. 33. AS 43.55.025(c) is repealed and reenacted to read:                                                      
07            (c)  To be eligible for the 30 percent production tax credit authorized by (a)(1)                            
08       of this section or the 40 percent production tax credit authorized by (a)(3) of this                              
09       section, exploration expenditures must                                                                            
10                 (1)  qualify under (b) of this section; and                                                             
11                 (2)  be for an exploration well, subject to the following:                                              
12                      (A)  before spudding the well, (i) the explorer shall submit to                                    
13            the commissioner of natural resources the information necessary to determine                                 
14            whether the geological objective of the well is a potential oil or gas trap that is                          
15            distinctly separate from any trap that has been tested by a preexisting well;                                
16            and (ii) the commissioner of natural resources must make an affirmative                                      
17            determination on that question; the commissioner of natural resources shall                                  
18            decide whether to make that determination within 60 days after receiving all                                 
19            the necessary information from the explorer and based on the information                                     
20            received and on other information the commissioner of natural resources may                                  
21            consider relevant;                                                                                           
22                      (B)  for an exploration well other than a well to explore a Cook                                   
23            Inlet prospect, the well must be located and drilled in such a manner that the                               
24            bottom hole is located not less than three miles away from the bottom hole of                                
25            a preexisting well drilled for oil or gas, irrespective of whether the preexisting                           
26            well has been completed, suspended, or abandoned;                                                            
27                      (C)  after completion, abandonment, or suspension under                                            
28            AS 31.05.030 of the exploration well, the commissioner of natural resources                                  
29            must determine that the well adequately achieved the explorer's stated                                       
30            geological objective.                                                                                        
31    * Sec. 34. AS 43.55.025(f) is amended to read:                                                                     
01            (f)  For a production tax credit under this section,                                                         
02                 (1)  an explorer shall, in a form prescribed by the department and,                                 
03       except for a credit under (l) of this section, within six months of the completion of                         
04       the exploration activity, claim the credit and submit information sufficient to                                   
05       demonstrate to the department's satisfaction that the claimed exploration expenditures                            
06       qualify under this section;                                                                                       
07                 (2)  an explorer shall agree, in writing,                                                               
08                      (A)  to notify the Department of Natural Resources, within 30                                      
09            days after completion of seismic or geophysical data processing, completion                                  
10            of [A] well drilling, or filing of a claim for credit, whichever is the latest, for                      
11            which exploration costs are claimed, of the date of completion and submit a                                  
12            report to that department describing the processing sequence and providing a                                 
13            list of data sets available; [IF, UNDER (c)(2)(B) OF THIS SECTION, AN                                        
14            EXPLORER SUBMITS A CLAIM FOR A CREDIT FOR EXPENDITURES                                                       
15            FOR AN EXPLORATION WELL THAT IS LOCATED WITHIN THREE                                                         
16            MILES OF A WELL ALREADY DRILLED FOR OIL AND GAS, IN                                                          
17            ADDITION TO THE SUBMISSIONS REQUIRED UNDER (1) OF THIS                                                       
18            SUBSECTION, THE EXPLORER SHALL SUBMIT THE INFORMATION                                                        
19            NECESSARY FOR THE COMMISSIONER OF NATURAL RESOURCES                                                          
20            TO EVALUATE THE VALIDITY OF THE EXPLORER'S CLAIM THAT                                                        
21            THE WELL IS DIRECTED AT A DISTINCTLY SEPARATE                                                                
22            EXPLORATION TARGET, AND THE COMMISSIONER OF NATURAL                                                          
23            RESOURCES SHALL, UPON RECEIPT OF ALL EVIDENCE                                                                
24            SUFFICIENT FOR THE COMMISSIONER TO EVALUATE THE                                                              
25            EXPLORER'S CLAIM, MAKE THAT DETERMINATION WITHIN 60                                                          
26            DAYS;]                                                                                                       
27                      (B)  to provide to the Department of Natural Resources, within                                     
28            30 days after the date of a request, unless a longer period is provided by the                           
29            Department of Natural Resources, specific data sets, ancillary data, and                                 
30            reports identified in (A) of this paragraph; in this subparagraph,                                       
31                           (i)  a seismic or geophysical data set includes the                                       
01                 data for an entire seismic survey, irrespective of whether the                                      
02                 survey area covers nonstate land in addition to state land or land                                  
03                 in a unit in addition to land outside a unit;                                                       
04                           (ii)  well data include all derivative products, results,                                 
05                 and copies of data collected and data analyses for the well,                                        
06                 including well logs; sample analyses; geophysical and velocity data                                 
07                 including vertical seismic profiles and check shot surveys; and                                     
08                 tangible material including, for each whole core collected, a                                       
09                 lengthwise cut slab that is at least 1/3 of the whole core volume,                                  
10                 and representative samples, as specified by the Department of                                       
11                 Natural Resources, of other gaseous, liquid, or solid material                                      
12                 collected from drilling or testing the well;                                                        
13                      (C)  that, notwithstanding any provision of AS 38, information                                     
14            provided under this paragraph will be held confidential by the Department of                                 
15            Natural Resources                                                                                            
16                           (i)  in the case of well data, until the expiration of the                                
17                 24-month period of confidentiality described in AS 31.05.035(c),                                    
18                 the Department of Natural Resources [FOR 10 YEARS                                                   
19                 FOLLOWING THE COMPLETION DATE, AT WHICH TIME                                                            
20                 THAT DEPARTMENT] will release the information after 30 days'                                            
21                 public notice, unless in the discretion of the commissioner of                                      
22                 natural resources, it is necessary to protect information relating to                               
23                 the valuation of unleased acreage in the same vicinity;                                             
24                           (ii)  in the case of seismic or other geophysical data,                                   
25                 other than seismic data acquired by seismic exploration subject to                                  
26                 (l) of this section, for 10 years following the completion date, at                                 
27                 which time the Department of Natural Resources will release the                                     
28                 information after 30 days' public notice;                                                           
29                           (iii)  in the case of seismic data obtained by seismic                                    
30                 exploration subject to (l) of this section, only until the expiration of                            
31                 30 days' public notice issued on or after the date the production                                   
01                 tax credit certificates are issued under (5) of this subsection; and                                
02                      (D)  that, in the case of well data, the explorer will not make                                
03            a request under AS 31.05.035(c) that the commissioner of natural                                         
04            resources keep the data confidential for longer than the 24-month period                                 
05            of confidentiality described in AS 31.05.035(c);                                                       
06                 (3)  if more than one explorer holds an interest in a well or seismic                                   
07       exploration,                                                                                                      
08                      (A)  each explorer may claim an amount of credit that is                                       
09            proportional to the explorer's cost incurred;                                                                
10                      (B)  in the case of a well, each explorer holding an interest                                  
11            in the well shall agree, in writing, that the explorer will not make the                                 
12            request described in (2)(D) of this subsection;                                                          
13                 (4)  the department may exercise the full extent of its powers as though                                
14       the explorer were a taxpayer under this title, in order to verify that the claimed                                
15       expenditures are qualified exploration expenditures under this section; and                                       
16                 (5)  if the department is satisfied that the explorer's claimed                                         
17       expenditures are qualified under this section and that all data required to be                                
18       submitted under this section have been submitted, the department shall issue to the                           
19       explorer a production tax credit certificate for the amount of credit to be allowed                               
20       against production taxes levied by AS 43.55.011(e); the credit is available for                               
21       immediate use; notwithstanding any contrary provision of AS 38, AS 40.25.100,                                 
22       or AS 43.05.230, the following information is not confidential:                                               
23                      (A)  the explorer's name;                                                                      
24                      (B)  the date of the application;                                                              
25                      (C)  the location of the well or seismic exploration;                                          
26                      (D)  the date of the department's issuance of the certificate;                                 
27            and                                                                                                      
28                      (E)  the date on which the information required to be                                          
29            submitted under this section will be released [DUE UNDER                                                 
30            AS 43.55.011(e) OR (f)].                                                                                     
31    * Sec. 35. AS 43.55.025(g) is amended to read:                                                                     
01            (g)  An explorer, other than an entity that is exempt from taxation under                                
02       this chapter, may transfer, convey, or sell its production tax credit certificate to any                      
03       person, and any person who receives a production tax credit certificate may also                                  
04       transfer, convey, or sell the certificate.                                                                        
05    * Sec. 36. AS 43.55.025(h) is amended to read:                                                                     
06            (h)  A producer that purchases a production tax credit certificate may apply                                 
07       the credits against its production tax liability under AS 43.55.011(e) [OR (f)].                                  
08       Regardless of the price the producer paid for the certificate, the producer may receive                           
09       a credit against its production tax liability for the full amount of the credit, but for not                      
10       more than the amount for which the certificate is issued. A production tax credit                                 
11       allowed under this section may not be applied more than once.                                                     
12    * Sec. 37. AS 43.55.025(i) is repealed and reenacted to read:                                                      
13            (i)  For a production tax credit under this section,                                                         
14                 (1)  a credit may not be applied to reduce a taxpayer's tax liability                                   
15       under AS 43.55.011(e) below zero for a calendar year; and                                                         
16                 (2)  an amount of the production tax credit in excess of the amount that                                
17       may be applied for a calendar year under this subsection may be carried forward and                               
18       applied against the taxpayer's tax liability under AS 43.55.011(e) in one or more later                           
19       calendar years.                                                                                                   
20    * Sec. 38. AS 43.55.025(k) is amended by adding a new paragraph to read:                                           
21                 (4)  "preexisting well" means a well that was spudded more than 540                                     
22       days but less than 35 years before the date on which the exploration well to which it                             
23       is compared is spudded.                                                                                           
24    * Sec. 39. AS 43.55.025 is amended by adding a new subsection to read:                                             
25            (l)  Subject to the terms and conditions of this section, if a claim is filed under                          
26       (f)(1) of this section before January 1, 2016, a credit against the production tax levied                         
27       by AS 43.55.011(e) is allowed in an amount equal to five percent of an eligible                                   
28       expenditure under this subsection incurred for seismic exploration performed before                               
29       July 1, 2003. To be eligible under this subsection, an expenditure must                                           
30                 (1)  have been for seismic exploration that                                                             
31                      (A)  obtained data that the commissioner of natural resources                                      
01            considers to be in the best interest of the state to acquire for public                                      
02            distribution; and                                                                                            
03                      (B)  was conducted outside the boundaries of a production unit;                                    
04            however, the amount of the expenditure that is otherwise eligible under this                                 
05            section is reduced proportionately by the portion of the seismic exploration                                 
06            activity that crossed into a production unit; and                                                            
07                 (2)  qualify under (b)(3) of this section.                                                              
08    * Sec. 40. AS 43.55.025 is amended by adding a new subsection to read:                                             
09            (m)  Subject to appropriations made by law, if and to the extent that purchase                               
10       of transferable tax credits by the Alaska Retirement Management Board is authorized                               
11       by law, the department shall issue a cash refund to the Alaska Retirement                                         
12       Management Board for a transferable tax credit originally issued to an explorer under                             
13       (f) of this section and purchased by the Alaska Retirement Management Board.                                      
14    * Sec. 41. AS 43.55 is amended by adding a new section to read:                                                    
15            Sec. 43.55.028. Oil and gas tax credit fund established; cash purchases of                               
16       tax credit certificates. (a) The oil and gas tax credit fund is established as a separate                       
17       fund of the state. The purpose of the fund is to purchase certain transferable tax credit                         
18       certificates issued under AS 43.55.023 and certain production tax credit certificates                             
19       issued under AS 43.55.025.                                                                                        
20            (b)  The oil and gas tax credit fund consists of                                                             
21                 (1)  money appropriated to the fund, including any appropriation of the                                 
22       percentage provided under (c) of this section of all revenue from taxes levied by                                 
23       AS 43.55.011 that is not required to be deposited in the constitutional budget reserve                            
24       fund established in art. IX, sec. 17(a), Constitution of the State of Alaska; and                                 
25                 (2)  earnings on the fund.                                                                              
26            (c)  The applicable percentage for a fiscal year under (b)(1) of this section is                             
27       determined with reference to the average price or value forecast by the department for                            
28       Alaska North Slope oil sold or otherwise disposed of on the United States West Coast                              
29       during the fiscal year for which the appropriation of revenue from taxes levied by                                
30       AS 43.55.011 is made. If that forecast is                                                                         
31                 (1)  $60 a barrel or higher, the applicable percentage is 10 percent;                                   
01                 (2)  less than $60 a barrel, the applicable percentage is 15 percent.                                   
02            (d)  The department shall manage the fund.                                                                   
03            (e)  The department may, on the written application of the person to whom a                                  
04       transferable tax credit certificate has been issued under AS 43.55.023(d) or a                                    
05       production tax credit certificate has been issued under AS 43.55.025(f), use available                            
06       money in the oil and gas tax credit fund to purchase, in whole or in part, the                                    
07       certificate if the department finds that                                                                          
08                 (1)  the calendar year of the purchase is not earlier than the first                                    
09       calendar year for which the credit shown on the certificate would otherwise be                                    
10       allowed to be applied against a tax;                                                                              
11                 (2)  within 24 months after applying for the transferable tax credit                                    
12       certificate or filing a claim for the production tax credit certificate, the applicant                            
13       incurred a qualified capital expenditure or was the successful bidder on a bid                                    
14       submitted for a lease on state land under AS 38.05.180(f);                                                        
15                 (3)  the amount expended for the purchase would not exceed the total                                    
16       of qualified capital expenditures and successful bids described in (2) of this                                    
17       subsection that have not been the subject of a finding made under this paragraph for                              
18       purposes of a previous purchase of a certificate;                                                                 
19                 (4)  the applicant does not have an outstanding liability to the state for                              
20       unpaid delinquent taxes under this title;                                                                         
21                 (5)  the applicant's total tax liability under AS 43.55.011(e), after                                   
22       application of all available tax credits, for the calendar year in which the application                          
23       is made is zero;                                                                                                  
24                 (6)  the applicant's average amount of oil and gas taxable under                                        
25       AS 43.55.011(e) and produced each day during the calendar year preceding the                                      
26       calendar year in which the application is made was not more than 50,000 BTU                                       
27       equivalent barrels;                                                                                               
28                 (7)  total purchases of certificates from the person during the calendar                                
29       year under this subsection would not exceed $25,000,000, except that this limitation                              
30       does not apply to purchases of certificates from or by the Alaska Retirement                                      
31       Management Board; and                                                                                             
01                 (8)  the purchase is consistent with this section and regulations adopted                               
02       under this section.                                                                                               
03            (f)  Money in the fund remaining at the end of a fiscal year does not lapse and                              
04       remains available for expenditure in successive fiscal years.                                                     
05            (g)  The department may adopt regulations to carry out the purposes of this                                  
06       section, including standards and procedures to allocate available money among                                     
07       applications for purchases the total amount of which exceeds the amount of available                              
08       money in the fund.                                                                                                
09            (h)  Nothing in this section creates a dedicated fund.                                                       
10            (i)  In this section, "qualified capital expenditure" has the meaning given in                               
11       AS 43.55.023.                                                                                                     
12    * Sec. 42. AS 43.55.030(a) is amended to read:                                                                     
13            (a)  A producer that produces oil or gas from a lease or property in the                                 
14       state during a calendar year, whether or not any tax payment is due under                                     
15       AS 43.55.020(a) for that oil or gas, [THE PERSON PAYING THE TAX] shall file                                 
16       with the department on March 31 of the following year [FOLLOWING THE                                          
17       CALENDAR YEAR FOR WHICH THE TAX WAS LEVIED] a statement, under                                                    
18       oath, in a form prescribed by the department, giving, with other information required,                            
19       the following:                                                                                                    
20                 (1)  a description of each lease or property from which [THE] oil or                                
21       [AND] gas was [WERE] produced, by name, legal description, lease number, or                                   
22       accounting codes assigned by the department;                                                                      
23                 (2)  the names of the producer and, if different, the person paying the                             
24       tax, if any;                                                                                                  
25                 (3)  the gross amount of oil and the gross amount of gas produced from                                  
26       each lease or property, and the percentage of the gross amount of oil and gas owned                               
27       by the [EACH] producer [FOR WHOM THE TAX IS PAID];                                                            
28                 (4)  the gross value at the point of production of the oil and of the gas                               
29       produced from each lease or property owned by the [EACH] producer and the costs                           
30       of transportation of the oil and gas [FOR WHOM THE TAX IS PAID];                                              
31                 (5)  the name of the first purchaser and the price received for the oil                                 
01       and for the gas, unless relieved from this requirement in whole or in part by the                                 
02       department; [AND]                                                                                                 
03                 (6)  the producer's qualified capital expenditures, as defined in                                   
04       AS 43.55.023, other lease expenditures [AND ADJUSTMENTS AS                                                    
05       CALCULATED] under AS 43.55.165, and adjustments or other payments or                                          
06       credits under AS 43.55.170;                                                                                   
07                 (7)  the production tax values of the oil and gas under                                             
08       AS 43.55.160;                                                                                                 
09                 (8)  any claims for tax credits to be applied; and                                                  
10                 (9)  calculations showing the amounts, if any, that were or are due                                 
11       under AS 43.55.020(a) and interest on any underpayment or overpayment                                         
12       [AS 43.55.160 - 43.55.170].                                                                                       
13    * Sec. 43. AS 43.55.030(d) is amended to read:                                                                     
14            (d)  Reports required under this section [BY OR ON BEHALF OF THE                                         
15       PRODUCER] are delinquent the first day following the day the report is due. The                               
16       person required to file the report is liable for a penalty, as determined by the                              
17       department under standards adopted in regulation by the department, of not                                    
18       more than $1,000 for each day the person fails to file the report at the time                                 
19       required. The penalty is in addition to the penalties in AS 43.05.220 and                                     
20       43.05.290 and is assessed, collected, and paid in the same manner as a tax                                    
21       deficiency under this title. In this subsection, "report" includes a statement."                              
22    * Sec. 44. AS 43.55.030 is amended by adding new subsections to read:                                              
23            (e)  An explorer or producer that incurs a lease expenditure under                                           
24       AS 43.55.165 or receives a payment or credit under AS 43.55.170 during a calendar                                 
25       year but does not produce oil or gas from a lease or property in the state during the                             
26       calendar year shall file with the department on March 31 of the following year a                                
27       statement, under oath, in a form prescribed by the department, giving, with other                                 
28       information required, the following:                                                                              
29                 (1)  the producer's qualified capital expenditures, as defined in                                       
30       AS 43.55.023, other lease expenditures under AS 43.55.165, and adjustments or other                               
31       payments or credits under AS 43.55.170; and                                                                       
01                 (2)  if the explorer or producer receives a payment or credit under                                     
02       AS 43.55.170, calculations showing whether the explorer or producer is liable for a                               
03       tax under AS 43.55.160(d) or 43.55.170(b) and, if so, the amount.                                                 
04            (f)  The department may require a producer, an explorer, or an operator of a                                 
05       lease or property to file monthly reports, as applicable, of                                                      
06                 (1)  the amounts and gross value at the point of production of oil and                                  
07       gas produced;                                                                                                     
08                 (2)  transportation costs of the oil and gas;                                                           
09                 (3)  any unscheduled interruption of, or reduction in the rate of, oil or                               
10       gas production;                                                                                                   
11                 (4)  lease expenditures and adjustments under AS 43.55.165 and                                          
12       43.55.170;                                                                                                        
13                 (5)  joint interest billings;                                                                           
14                 (6)  contracts for the sale or transportation of oil or gas;                                            
15                 (7)  information and calculations used in determining monthly                                           
16       installment payments of estimated tax under AS 43.55.020(a); and                                                  
17                 (8)  other records and information the department considers necessary                                   
18       for the administration of this chapter.                                                                           
19    * Sec. 45. AS 43.55.040 is amended to read:                                                                        
20            Sec. 43.55.040. Powers of Department of Revenue. Except as provided in                                     
21       AS 43.05.405 - 43.05.499, the department may                                                                      
22                 (1)  require a person engaged in production and the agent or employee                                   
23       of the person, and the purchaser of oil or gas, or the owner of a royalty interest in oil                         
24       or gas to furnish, whether by the filing of regular statements or reports or otherwise,                           
25       additional information that is considered by the department as necessary to compute                               
26       the amount of the tax; notwithstanding any contrary provision of law, the disclosure                              
27       of additional information under this paragraph to the producer obligated to pay the tax                           
28       does not violate AS 40.25.100(a) or AS 43.05.230(a); before disclosing information                                
29       under this paragraph that is otherwise required to be held confidential under                                     
30       AS 40.25.100(a) or AS 43.05.230(a), the department shall                                                          
31                      (A)  provide the person that furnished the information a                                           
01            reasonable opportunity to be heard regarding the proposed disclosure and the                                 
02            conditions to be imposed under (B) of this paragraph; and                                                    
03                      (B)  impose appropriate conditions limiting                                                        
04                           (i)  access to the information to those legal counsel,                                        
05                 consultants, employees, officers, and agents of the producer who have                                   
06                 a need to know that information for the purpose of determining or                                       
07                 contesting the producer's tax obligation; and                                                           
08                           (ii)  the use of the information to use for that purpose;                                     
09                 (2)  examine the books, records, and files of the [SUCH A] person;                                  
10                 (3)  conduct hearings and compel the attendance of witnesses and the                                    
11       production of books, records, and papers of any person; [AND]                                                     
12                 (4)  make an investigation or hold an inquiry that is considered                                        
13       necessary to a disclosure of the facts as to                                                                      
14                      (A)  the amount of production from any oil or gas location, or                                     
15            of a company or other producer of oil or gas; and                                                            
16                      (B)  the rendition of the oil and gas for taxing purposes;                                     
17                 (5)  require a producer, an explorer, or an operator of a lease or                                  
18       property to file reports and copies of records that the department considers                                  
19       necessary to forecast state revenue under this chapter; in the case of reports and                            
20       copies of records relating to proposed, expected, or approved unit expenditures                               
21       for a unit for which one or more working interest owners other than the                                       
22       operator have authority to approve unit expenditures, the required reports and                                
23       copies of records are limited to those reports or copies of records that constitute                           
24       or disclose communications between the operator and the working interest                                      
25       owners relating to unit budget matters; and                                                                   
26                 (6)  assess against a person required under this section to file a                                  
27       report, statement, or other document a penalty, as determined by the                                          
28       department under standards adopted in regulation by the department, of not                                    
29       more than $1,000 for each day the person fails to file the report, statement, or                              
30       other document at the time required; the penalty is in addition to any penalties                              
31       under AS 43.05.220 and 43.05.290 and is assessed, collected, and paid in the                                  
01       same manner as a tax deficiency under this title; the penalty shall bear interest                             
02       at the rate specified under AS 43.05.225(1); notwithstanding authority granted                                
03       under AS 43.05.070 to compromise a penalty, the department may not under                                      
04       that section compromise a penalty under this paragraph by agreeing to accept                                  
05       less than 50 percent of the penalty originally assessed by the department.                                    
06    * Sec. 46. AS 43.55 is amended by adding a new section to read:                                                    
07            Sec. 43.55.075. Limitation on assessment and amended returns. (a) Except                                   
08       as provided in AS 43.05.260(c), the amount of a tax imposed by this chapter must be                               
09       assessed within six years after the latest return was filed.                                                      
10            (b)  A decision of a regulatory agency, court, or other body with authority to                               
11       resolve disputes that results in a retroactive change to a lease expenditure, to an                               
12       adjustment to a lease expenditure, to costs of transportation, to sale price, to                                  
13       prevailing value, or to consideration of quality differentials relating to the                                    
14       commingling of oils has a corresponding effect, either an increase or decrease, as                                
15       applicable, on the production tax value of oil or gas or the amount or availability of a                          
16       tax credit as determined under this chapter. For purposes of this section, a change to a                          
17       lease expenditure includes a change in the categorization of a lease expenditure as a                             
18       qualified capital expenditure or as not a qualified capital expenditure. The producer                             
19       shall                                                                                                             
20                 (1)  within 60 days after the change, notify the department in writing;                                 
21       and                                                                                                               
22                 (2)  within 120 days after the change, file amended returns covering all                                
23       periods affected by the change, unless the department agrees otherwise or a stay is in                            
24       place that affects the filing or payment, regardless of the pendency of appeals of the                            
25       decision.                                                                                                         
26            (c)  If an alteration in or modification of a producer's federal income tax return                           
27       or a recomputation of the producer's federal income tax or determination of                                       
28       deficiency occurs that affects the amount of a tax imposed on the producer under this                             
29       chapter, the producer shall                                                                                       
30                 (1)  within 60 days after the final determination of the alteration,                                    
31       modification, recomputation, or deficiency, notify the department in writing; and                                 
01                 (2)  within 120 days after the final determination of the alteration,                                   
02       modification, recomputation, or deficiency, file amended returns covering all affected                            
03       periods.                                                                                                          
04            (d)  In this section,                                                                                        
05                 (1)  "qualified capital expenditure" has the meaning given in                                           
06       AS 43.55.023;                                                                                                     
07                 (2)  "return" includes a report, a statement, and an amended return,                                    
08       report, or statement.                                                                                             
09    * Sec. 47. AS 43.55.110 is amended by adding new subsections to read:                                              
10            (e)  The department may require that returns, statements, reports, notifications,                            
11       and applications filed under this chapter be filed electronically in a form and manner                            
12       approved or prescribed by the department.                                                                         
13            (f)  The department may require that payments required under this chapter be                                 
14       made electronically in a form and manner approved or prescribed by the department.                                
15            (g)  Notwithstanding AS 44.62, the department may issue, for the information                                 
16       and guidance of producers, explorers, and other interested persons, advisory bulletins                            
17       stating the department's interpretation of provisions of this chapter and of regulations                          
18       adopted under this chapter. Unless otherwise provided by the department by                                        
19       regulation, interpretations stated in the advisory bulletins are not binding on the                               
20       department or others.                                                                                             
21    * Sec. 48. AS 43.55.150(a) is amended to read:                                                                     
22            (a)  For the purposes of AS 43.55.011 - 43.55.180, the gross value at the point                              
23       of production is calculated using the reasonable costs of transportation of the oil or                            
24       gas. The reasonable costs of transportation are the actual costs, except when the                                 
25                 (1)  parties to the transportation of oil or gas are affiliated;                                        
26                 (2)  contract for the transportation of oil or gas is not                                               
27                      (A)  an arm's length transaction; or                                                       
28                      (B)  [IS NOT] representative of the market value of that                                       
29            transportation; or [AND]                                                                                 
30                 (3)  method of transportation of oil or gas is not reasonable in view of                                
31       existing alternative methods of transportation.                                                                   
01    * Sec. 49. AS 43.55.150(b) is amended to read:                                                                     
02            (b)  If the department finds that a condition [THE CONDITIONS] in (a)(1),                                
03       (2), or [AND] (3) of this section is [ARE] present, the department shall determine the                    
04       reasonable costs of transportation, using the fair market value of like transportation,                           
05       the fair market value of equally efficient and available alternative modes of                                     
06       transportation, or other reasonable methods. Transportation costs fixed by tariff rates                           
07       that have been adjudicated as just and reasonable by [PROPERLY ON FILE                                        
08       WITH] the Regulatory Commission of Alaska or other regulatory agency shall be                                     
09       considered prima facie reasonable.                                                                                
10    * Sec. 50. AS 43.55.160(a) is amended to read:                                                                     
11            (a)  Except as provided in (b) of this section, for the purposes of                                          
12                 (1)  AS 43.55.011(e), the annual production tax value of the taxable                                    
13                      (A)  oil and gas produced during a calendar year from leases or                                    
14            properties in the state that include land north of 68 degrees North latitude is                              
15            the gross value at the point of production of the oil and gas taxable under                                  
16            AS 43.55.011(e) and produced by the producer from those leases or                                            
17            properties, less the producer's lease expenditures under AS 43.55.165 for the                                
18            calendar year applicable to the oil and gas produced by the producer from                                    
19            those leases or properties, as adjusted under AS 43.55.170; this                                         
20            subparagraph does not apply to gas taxable under AS 43.55.011(p);                                        
21                      (B)  oil and gas produced during a calendar year from leases or                                    
22            properties in the state outside the Cook Inlet sedimentary basin, no part of                                 
23            which is north of 68 degrees North latitude, is the gross value at the point of                              
24            production of the oil and gas taxable under AS 43.55.011(e) and produced by                                  
25            the producer from those leases or properties, less the producer's lease                                      
26            expenditures under AS 43.55.165 for the calendar year applicable to the oil                                  
27            and gas produced by the producer from those leases or properties, as adjusted                                
28            under AS 43.55.170; this subparagraph does not apply to gas taxable                                      
29            under AS 43.55.011(p);                                                                                   
30                      (C)  oil produced during a calendar year from a lease or                                           
31            property in the Cook Inlet sedimentary basin is the gross value at the point of                              
01            production of the oil taxable under AS 43.55.011(e) and produced by the                                      
02            producer from that lease or property, less the producer's lease expenditures                                 
03            under AS 43.55.165 for the calendar year applicable to the oil produced by the                               
04            producer from that lease or property, as adjusted under AS 43.55.170;                                        
05                      (D)  gas produced during a calendar year from a lease or                                           
06            property in the Cook Inlet sedimentary basin is the gross value at the point of                              
07            production of the gas taxable under AS 43.55.011(e) and produced by the                                      
08            producer from that lease or property, less the producer's lease expenditures                                 
09            under AS 43.55.165 for the calendar year applicable to the gas produced by                                   
10            the producer from that lease or property, as adjusted under AS 43.55.170;                                    
11                      (E)  gas produced during a calendar year from a lease or                                       
12            property outside the Cook Inlet sedimentary basin and used in the state is                               
13            the gross value at the point of production of that gas taxable under                                     
14            AS 43.55.011(e) and produced by the producer from that lease or                                          
15            property, less the producer's lease expenditures under AS 43.55.165 for                                  
16            the calendar year applicable to that gas produced by the producer from                                   
17            that lease or property, as adjusted under AS 43.55.170;                                                  
18                 (2)  AS 43.55.020(a)(2)(B) [AS 43.55.011(g)], the monthly production                                
19       tax value of the taxable                                                                                          
20                      (A)  oil and gas produced during a month from leases or                                            
21            properties in the state that include land north of 68 degrees North latitude is                              
22            the gross value at the point of production of the oil and gas taxable under                                  
23            AS 43.55.011(e) [AS 43.55.011(g)] and produced by the producer from those                                
24            leases or properties, less 1/12 of the producer's lease expenditures under                                   
25            AS 43.55.165 for the calendar year applicable to the oil and gas produced by                                 
26            the producer from those leases or properties, as adjusted under AS 43.55.170;                                
27            this subparagraph does not apply to gas subject to additional tax under                                  
28            AS 43.55.011(o);                                                                                         
29                      (B)  oil and gas produced during a month from leases or                                            
30            properties in the state outside the Cook Inlet sedimentary basin, no part of                                 
31            which is north of 68 degrees North latitude, is the gross value at the point of                              
01            production of the oil and gas taxable under AS 43.55.011(e)                                              
02            [AS 43.55.011(g)] and produced by the producer from those leases or                                          
03            properties, less 1/12 of the producer's lease expenditures under AS 43.55.165                                
04            for the calendar year applicable to the oil and gas produced by the producer                                 
05            from those leases or properties, as adjusted under AS 43.55.170; this                                    
06            subparagraph does not apply to gas subject to additional tax under                                       
07            AS 43.55.011(o);                                                                                         
08                      (C)  oil produced during a month from a lease or property in                                       
09            the Cook Inlet sedimentary basin is the gross value at the point of production                               
10            of the oil taxable under AS 43.55.011(e) [AS 43.55.011(g)] and produced by                               
11            the producer from that lease or property, less 1/12 of the producer's lease                                  
12            expenditures under AS 43.55.165 for the calendar year applicable to the oil                                  
13            produced by the producer from that lease or property, as adjusted under                                      
14            AS 43.55.170;                                                                                                
15                      (D)  gas produced during a month from a lease or property in                                       
16            the Cook Inlet sedimentary basin is the gross value at the point of production                               
17            of the gas taxable under AS 43.55.011(e) [AS 43.55.011(g)] and produced by                               
18            the producer from that lease or property, less 1/12 of the producer's lease                                  
19            expenditures under AS 43.55.165 for the calendar year applicable to the gas                                  
20            produced by the producer from that lease or property, as adjusted under                                      
21            AS 43.55.170;                                                                                            
22                      (E)  gas produced during a month from a lease or property                                      
23            outside the Cook Inlet sedimentary basin and used in the state is the gross                              
24            value at the point of production of that gas taxable under AS 43.55.011(e)                               
25            and produced by the producer from that lease or property, less 1/12 of                                   
26            the producer's lease expenditures under AS 43.55.165 for the calendar                                    
27            year applicable to that gas produced by the producer from that lease or                                  
28            property, as adjusted under AS 43.55.170.                                                                
29    * Sec. 51. AS 43.55.165(a) is amended to read:                                                                     
30            (a)  Except as provided under (e) [(c) - (e)] of this section, for the purposes of                       
31       AS 43.55.160, a producer's lease expenditures for a calendar year are the ordinary and                            
01       necessary costs upstream of the point of production of oil and gas that are incurred                              
02       during the calendar year by the producer after March 31, 2006, and that are direct                                
03       costs of exploring for, developing, or producing oil or gas deposits located within the                           
04       producer's leases or properties in the state or, in the case of land in which the                                 
05       producer does not own a working interest, that are direct costs of exploring for oil or                           
06       gas deposits located within other land in the state. In determining whether costs are                             
07       lease expenditures, the department shall consider, among other factors,                                           
08                 (1)  the typical industry practices and standards in the state that                                     
09       determine the costs, other than items listed in (e) of this section, that an operator is                          
10       allowed to bill a working interest owner that is not the operator, under unit operating                           
11       agreements or similar operating agreements that were in effect before December 2,                                 
12       2005, and were subject to negotiation with at least one working interest owner with                               
13       substantial bargaining power, other than the operator; and                                                        
14                 (2)  the standards adopted by the Department of Natural Resources that                                  
15       determine the costs, other than items listed in (e) of this section, that a lessee is                             
16       allowed to deduct from revenue in calculating net profits under a lease issued under                              
17       AS 38.05.180(f)(3)(B), (D), or (E).                                                                               
18    * Sec. 52. AS 43.55.165(b) is amended to read:                                                                     
19            (b)  For purposes of (a) of this section,                                                                    
20                 (1)  direct costs include                                                                               
21                      (A)  an expenditure, when incurred, to acquire an item if the                                      
22            acquisition cost is otherwise a direct cost, notwithstanding that the                                        
23            expenditure may be required to be capitalized rather than treated as an                                      
24            expense for financial accounting or federal income tax purposes;                                             
25                      (B)  payments of or in lieu of property taxes, sales and use                                       
26            taxes, motor fuel taxes, and excise taxes;                                                                   
27                      (C)  a reasonable allowance, as determined under regulations                                       
28            adopted by the department, for overhead expenses directly related to exploring                               
29            for, developing, and producing oil or gas deposits located within leases or                                  
30            properties or other land in the state;                                                                       
31                 (2)  an activity must be physically located in the state [DOES NOT                                  
01       NEED TO BE PHYSICALLY LOCATED ON, NEAR, OR WITHIN THE                                                             
02       PREMISES OF THE LEASE OR PROPERTY WITHIN WHICH AN OIL OR GAS                                                      
03       DEPOSIT BEING EXPLORED FOR, DEVELOPED, OR PRODUCED IS                                                             
04       LOCATED] in order for the cost of the activity to be a cost upstream of the point of                              
05       production of the oil or gas.                                                                                     
06    * Sec. 53. AS 43.55.165(b), as amended by sec. 52 of this Act, is amended to read:                                 
07            (b)  For purposes of (a) of this section,                                                                    
08                 (1)  direct costs include                                                                               
09                      (A)  an expenditure, when incurred, to acquire an item if the                                      
10            acquisition cost is otherwise a direct cost, notwithstanding that the                                        
11            expenditure may be required to be capitalized rather than treated as an                                      
12            expense for financial accounting or federal income tax purposes;                                             
13                      (B)  payments of or in lieu of property taxes, sales and use                                       
14            taxes, motor fuel taxes, and excise taxes;                                                                   
15                      (C)  a reasonable allowance, as determined under regulations                                       
16            adopted by the department, for overhead expenses directly related to exploring                               
17            for, developing, and producing oil or gas deposits located within leases or                                  
18            properties or other land in the state;                                                                       
19                 (2)  an activity must be physically located on the premises of the                                  
20       lease or property from which oil or gas is recovered [IN THE STATE] in order for                              
21       the cost of the activity to be a cost upstream of the point of production of the oil or                           
22       gas.                                                                                                              
23    * Sec. 54. AS 43.55.165(e) is amended to read:                                                                     
24            (e)  For purposes of this section, lease expenditures do not include                                         
25                 (1)  depreciation, depletion, or amortization;                                                          
26                 (2)  oil or gas royalty payments, production payments, lease profit                                     
27       shares, or other payments or distributions of a share of oil or gas production, profit, or                        
28       revenue;                                                                                                          
29                 (3)  taxes based on or measured by net income;                                                          
30                 (4)  interest or other financing charges or costs of raising equity or                                  
31       debt capital;                                                                                                     
01                 (5)  acquisition costs for a lease or property or exploration license;                                  
02                 (6)  costs arising from fraud, wilful misconduct, [OR] gross                                            
03       negligence, criminal negligence, violation of law, including a violation of 33                                
04       U.S.C. 1319(c)(1) or 1321(b)(3) (Clean Water Act), or failure to comply with an                               
05       obligation under a lease, permit, or license issued by the state or federal                                   
06       government;                                                                                                   
07                 (7)  fines or penalties imposed by law;                                                                 
08                 (8)  costs of arbitration, litigation, [OR OTHER] dispute resolution,                               
09       lobbying, public relations advertising, or policy advocacy [ACTIVITIES THAT                                   
10       INVOLVE THE STATE OR CONCERN THE RIGHTS OR OBLIGATIONS                                                            
11       AMONG OWNERS OF INTERESTS IN, OR RIGHTS TO PRODUCTION FROM,                                                       
12       ONE OR MORE LEASES OR PROPERTIES OR A UNIT];                                                                      
13                 (9)  costs incurred in organizing a partnership, joint venture, or other                                
14       business entity or arrangement;                                                                                   
15                 (10)  amounts paid to indemnify the state; the exclusion provided by                                    
16       this paragraph does not apply to the costs of obtaining insurance or a surety bond                                
17       from a third-party insurer or surety;                                                                             
18                 (11)  surcharges levied under AS 43.55.201 or 43.55.300;                                                
19                 (12)  for a transaction that is an internal transfer or is otherwise not an                             
20       arm's length transaction, expenditures incurred that are in excess of fair market value;                          
21                 (13)  an expenditure incurred to purchase an interest in any                                            
22       corporation, partnership, limited liability company, business trust, or any other                                 
23       business entity, whether or not the transaction is treated as an asset sale for federal                           
24       income tax purposes;                                                                                              
25                 (14)  a tax levied under AS 43.55.011;                                                                  
26                 (15)  [THE PORTION OF] costs incurred for dismantlement, removal,                                       
27       surrender, or abandonment of a facility, pipeline, well pad, platform, or other                                   
28       structure, or for the restoration of a lease, field, unit, area, tract of land, body of                       
29       water, or right-of-way in conjunction with dismantlement, removal, surrender, or                                  
30       abandonment [, THAT IS ATTRIBUTABLE TO PRODUCTION OF OIL OR GAS                                                   
31       OCCURRING BEFORE APRIL 1, 2006; THE PORTION IS CALCULATED AS A                                                    
01       RATIO OF THE AMOUNT OF OIL AND GAS PRODUCTION, IN BARRELS OF                                                      
02       OIL EQUIVALENT, ASSOCIATED WITH THE FACILITY, PIPELINE, WELL                                                      
03       PAD, PLATFORM, OTHER STRUCTURE, LEASE, FIELD, UNIT, AREA, BODY                                                    
04       OF WATER, OR RIGHT-OF-WAY OCCURRING BEFORE APRIL 1, 2006, TO                                                      
05       THE TOTAL AMOUNT OF OIL AND GAS PRODUCTION, IN BARRELS OF                                                         
06       OIL EQUIVALENT, ASSOCIATED WITH THAT FACILITY, PIPELINE, WELL                                                     
07       PAD, PLATFORM, OTHER STRUCTURE, LEASE, FIELD, UNIT, AREA, BODY                                                    
08       OF WATER, OR RIGHT-OF-WAY THROUGH THE END OF THE CALENDAR                                                         
09       MONTH BEFORE COMMENCEMENT OF THE DISMANTLEMENT,                                                                   
10       REMOVAL, SURRENDER, OR ABANDONMENT]; a cost is not excluded under                                                 
11       this paragraph if the dismantlement, removal, surrender, or abandonment for which                                 
12       the cost is incurred is undertaken for the purpose of replacing, renovating, or                                   
13       improving the facility, pipeline, well pad, platform, or other structure; [FOR THE                                
14       PURPOSES OF THIS PARAGRAPH, "BARREL OF OIL EQUIVALENT" MEANS                                                      
15                      (A)  IN THE CASE OF OIL, ONE BARREL;                                                               
16                      (B)  IN THE CASE OF GAS, 6,000 CUBIC FEET;]                                                        
17                 (16)  costs incurred for containment, control, cleanup, or removal in                                   
18       connection with any unpermitted release of oil or a hazardous substance and any                                   
19       liability for damages imposed on the producer or explorer for that unpermitted                                    
20       release; this paragraph does not apply to the cost of developing and maintaining an oil                           
21       discharge prevention and contingency plan under AS 46.04.030;                                                     
22                 (17)  costs incurred to satisfy a work commitment under an exploration                                  
23       license under AS 38.05.132;                                                                                       
24                 (18)  that portion of expenditures, that would otherwise be qualified                                   
25       capital expenditures, as defined in AS 43.55.023 [AS 43.55.023(k)], incurred during a                     
26       calendar year that are less than the product of $0.30 multiplied by the total taxable                             
27       production from each lease or property, in BTU equivalent barrels, during that                                    
28       calendar year, except that, when a portion of a calendar year is subject to this                                  
29       provision, the expenditures and volumes shall be prorated within that calendar year;                          
30                 (19)  costs incurred to construct, acquire, or operate a refinery or                                
31       crude oil topping plant, regardless of whether the products of the refinery or                                
01       topping plant are used in oil or gas exploration, development, or production                                  
02       operations; however, if a producer owns a refinery or crude oil topping plant                                 
03       that is located on or near the premises of the producer's lease or property in the                            
04       state and that processes the producer's oil produced from that lease or property                              
05       into a product that the producer uses in the operation of the lease or property in                            
06       drilling for or producing oil or gas, the producer's lease expenditures include the                           
07       amount calculated by subtracting from the fair market value of the product used                               
08       the prevailing value, as determined under AS 43.55.020(f), of the oil that is                                 
09       processed;                                                                                                    
10                 (20)  costs relating to office buildings, fixtures and equipment, and                               
11       real property that are not located in the state.                                                              
12    * Sec. 55. AS 43.55.165(h) is amended to read:                                                                     
13            (h)  The department shall adopt regulations that provide for reasonable                                      
14       methods of allocating costs between oil and gas, between gas subject to                                       
15       AS 43.55.011(p) and other gas, and between leases or properties in those                                      
16       circumstances where the determination of the lease expenditures that are applicable to                            
17       oil or to gas, that are applicable to gas subject to AS 43.55.011(p) or to other gas,                         
18       or that are applicable to oil and gas produced from different leases or properties,                               
19       requires an allocation of costs.                                                                                  
20    * Sec. 56. AS 43.55.170(a) is amended to read:                                                                     
21            (a)  A [UNLESS THE PAYMENT OR CREDIT HAS ALREADY BEEN                                                    
22       SUBTRACTED IN CALCULATING BILLABLE OR BILLED COSTS UNDER                                                          
23       AS 43.55.165(c) OR (d), A] producer's lease expenditures under AS 43.55.165 must                                  
24       be adjusted by subtracting payments or credits, other than tax credits, received by the                           
25       producer or by an operator acting for the producer for                                                            
26                 (1)  the use by another person of a production facility in which the                                    
27       producer has an ownership interest or the management by the producer of a                                         
28       production facility under a management agreement providing for the producer to                                    
29       receive a management fee;                                                                                         
30                 (2)  a reimbursement or similar payment that offsets the producer's                                     
31       lease expenditures, including an insurance recovery from a third-party insurer and a                              
01       payment from the state or federal government for reimbursement of the producer's                                  
02       upstream costs, including costs for gathering, separating, cleaning, dehydration,                                 
03       compressing, or other field handling associated with the production of oil or gas                                 
04       upstream of the point of production;                                                                              
05                 (3)  the sale or other transfer of                                                                      
06                      (A)  an asset, including geological, geophysical, or well data or                                  
07            interpretations, acquired by the producer as a result of a lease expenditure or                              
08            an expenditure that would be a lease expenditure if it were incurred after                                   
09            March 31, 2006; for purposes of this subparagraph,                                                           
10                           (i)  if a producer removes from the state, for use outside                                    
11                 the state, an asset described in this subparagraph, the value of the asset                              
12                 at the time it is removed is considered a payment received by the                                       
13                 producer for sale or transfer of the asset;                                                             
14                           (ii)  for a transaction that is an internal transfer or is                                    
15                 otherwise not an arm's length transaction, if the sale or transfer of the                               
16                 asset is made for less than fair market value, the amount subtracted                                    
17                 must be the fair market value; and                                                                      
18                      (B)  oil or gas                                                                                    
19                           (i)  that is not considered produced from a lease or                                          
20                 property under AS 43.55.020(e); and                                                                     
21                           (ii)  the cost of acquiring which is a lease expenditure                                      
22                 incurred by the person that acquires the oil or gas.                                                    
23    * Sec. 57. AS 43.55 is amended by adding a new section to article 4 to read:                                       
24            Sec. 43.55.890. Disclosure of tax information. Notwithstanding any contrary                                
25       provision of AS 40.25.100, and regardless of whether the information is considered                                
26       under AS 43.05.230(e) to constitute statistics classified to prevent the identification of                        
27       particular returns or reports, the department may publish the following information                               
28       under this chapter, if aggregated among three or more producers or explorers,                                     
29       showing by month or calendar year and by lease or property, unit, or area of the state:                           
30                 (1)  the amount of oil or gas production;                                                               
31                 (2)  the amount of taxes levied under this chapter or paid under this                                   
01       chapter;                                                                                                          
02                 (3)  the effective tax rates under this chapter;                                                        
03                 (4)  the gross value of oil or gas at the point of production;                                          
04                 (5)  the transportation costs for oil or gas;                                                           
05                 (6)  qualified capital expenditures under AS 43.55.023(k);                                              
06                 (7)  exploration expenditures under AS 43.55.025;                                                       
07                 (8)  production tax values of oil or gas under AS 43.55.160;                                            
08                 (9)  lease expenditures under AS 43.55.165;                                                             
09                 (10)  adjustments to lease expenditures under AS 43.55.170;                                             
10                 (11)  tax credits applicable or potentially applicable against taxes                                    
11       levied by this chapter.                                                                                           
12    * Sec. 58. AS 43.55.900 is amended by adding new paragraphs to read:                                               
13                 (22)  "producer" means an owner of an operating right, operating                                        
14       interest, or working interest in a mineral interest in oil or gas;                                                
15                 (23)  "unit" means a group of tracts of land that is                                                    
16                      (A)  subject to a cooperative or a unit plan of development or                                     
17            operation that has been certified by the commissioner of natural resources                                   
18            under AS 38.05.180(p);                                                                                       
19                      (B)  subject to a cooperative or a unit plan of development or                                     
20            operation that has been certified by the United States Secretary of the Interior                             
21            under 30 U.S.C. 226(m);                                                                                      
22                      (C)  subject to an agreement of the owners of interests in the                                     
23            tracts of land to validly integrate their interests to provide for the unitized                              
24            management, development, and operation of the tracts of land as a unit, within                               
25            the meaning of AS 31.05.110(a); or                                                                           
26                      (D)  within the unit area of a unit created by order of the                                        
27            Alaska Oil and Gas Conservation Commission under AS 31.05.110(b);                                            
28                 (24)  "used in the state" means delivered for consumption as fuel in the                                
29       state, including as fuel consumed to generate electricity.                                                        
30    * Sec. 59. AS 43.55.165(c) and 43.55.165(d) are repealed.                                                          
31    * Sec. 60. AS 43.55.011(g), 43.55.011(h), and 43.55.160(c) are repealed.                                           
01    * Sec. 61. The uncodified law of the State of Alaska is amended by adding a new section to                         
02 read:                                                                                                                   
03       APPLICABILITY. (a) Sections 26, 29, 51, 52, 54, 56, and 59 of this Act, and                                       
04 AS 43.55.023(l), enacted by sec. 30 of this Act, apply to oil and gas produced after                                    
05 March 31, 2006.                                                                                                         
06       (b)  Sections 15 - 24, 31 - 34, 36 - 39, 44, 50, 55, and 60 of this Act apply to oil and                          
07 gas produced after December 31, 2006.                                                                                   
08       (c)  Sections 42 and 44 of this Act apply to statements and reports under                                         
09 AS 43.55.030(a), as amended by sec. 42 of this Act, and AS 43.55.030(e) and (f), as added                               
10 by sec. 44 of this Act, required to be filed after December 31, 2007.                                                   
11       (d)  Sections 31 - 34 and 38 of this Act apply to exploration expenditures incurred for                           
12 work performed after December 31, 2006, that are the basis of tax credits that may be                                   
13 claimed against taxes levied for oil and gas produced after December 31, 2006.                                          
14       (e)  AS 43.55.075(a), enacted by sec. 46 of this Act, applies to any tax liability under                          
15 AS 43.55 with respect to which the period of limitations on assessment under AS 43.05.260                               
16 had not expired before the effective date of secs. 14 and 46 of this Act.                                               
17       (f)  Section 28 of this Act applies to transferable tax credit certificates issued under                          
18 AS 43.55.023(d), as amended by sec. 27 of this Act, and to transferable tax credit certificates                         
19 issued under AS 43.55.023(d), as amended by sec. 27 of this Act, in effect before January 1,                            
20 2008, for which a cash refund has not been issued under AS 43.55.023(f) before January 1,                               
21 2008.                                                                                                                   
22       (g)  AS 43.55.020(i), enacted by sec. 25 of this Act, applies to any installment                                  
23 payment due after the effective date of sec. 25 of this Act that is not paid timely.                                    
24       (h)  The penalty in AS 43.55.030(d), enacted by the amendment to AS 43.55.030(d)                                  
25 in sec. 43 of this Act, applies to any report required to be filed after the effective date of sec.                     
26 43 of this Act that is not filed timely.                                                                                
27       (i)  The penalty in AS 43.55.040(6), enacted by the amendment to AS 43.55.040 in                                  
28 sec. 45 of this Act, applies to any report, statement, or other document required to be filed                           
29 after the effective date of sec. 45 of this Act.                                                                      
30    * Sec. 62. The uncodified law of the State of Alaska is amended by adding a new section to                         
31 read:                                                                                                                   
01       TRANSITION: ASSIGNMENT OF OIL AND GAS AUDITORS IN THE                                                             
02 DEPARTMENT OF REVENUE AND DEPARTMENT OF NATURAL RESOURCES.                                                              
03 Notwithstanding any contrary provision of law, employees employed as oil and gas auditors                               
04 performing production tax audits or as their immediate supervisors in the Department of                                 
05 Revenue and employees employed as oil and gas auditors performing royalty audits,                                       
06 including net profit share audits, or as their immediate supervisors in the Department of                               
07 Natural Resources are assigned to the exempt service in accordance with AS 39.25.110(42),                               
08 added by sec. 10 of this Act, and may not be included in the general government or                                      
09 supervisory collective bargaining units of state employees except as provided in this section.                          
10 All oil and gas auditors performing production tax audits or royalty audits and their                                   
11 immediate supervisors hired before the effective date of sec. 10 of this Act have the option of                         
12 (1) continuing in the general government or supervisory collective bargaining units and being                           
13 subject to their respective collective bargaining agreements; or (2) being removed from those                           
14 bargaining units. Those employees have 90 days from the effective date of sec. 10 of this Act                           
15 to exercise the option to continue in the collective bargaining units. The option taken under                           
16 this section by the employee is irrevocable. The employees choosing to be removed from                                  
17 those bargaining units are removed after any notice period required by a collective                                     
18 bargaining agreement.                                                                                                   
19    * Sec. 63. The uncodified law of the State of Alaska is amended by adding a new section to                         
20 read:                                                                                                                   
21       TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding any                                                     
22 contrary provision of AS 44.62.240,                                                                                     
23            (1)  if the Department of Revenue expressly designates in the regulation that                                
24 the regulation applies retroactively to that date, a regulation adopted by the Department of                            
25 Revenue to implement, interpret, make specific, or otherwise carry out                                                  
26                 (A)  secs. 26, 29, 51, 52, 54, 56, and 59 of this Act may apply                                         
27       retroactively to April 1, 2006;                                                                                   
28                 (B)  secs. 15 - 24, 31 - 34, 36 - 39, 42, 44, 50, 55, and 60 of this Act                                
29       may apply retroactively to January 1, 2007;                                                                       
30            (2)  a regulation adopted by the Department of Natural Resources to                                          
31 implement, interpret, make specific, or otherwise carry out statutory provisions for the                                
01 administration of oil and gas leases issued under AS 38.05.180(f)(3)(B), (D), or (E), to the                            
02 extent the regulation deals with the treatment of oil and gas production taxes in determining                           
03 net profits under those leases, may apply retroactively to April 1, 2006, if the Department of                          
04 Natural Resources expressly designates in the regulation that the regulation applies                                    
05 retroactively to that date.                                                                                             
06    * Sec. 64. The uncodified law of the State of Alaska is amended by adding a new section to                         
07 read:                                                                                                                   
08       TRANSITION: PENDING APPLICATIONS. If an application made under                                                    
09 AS 43.55.023(f) is received by the Department of Revenue before January 1, 2008, and is                                 
10 still outstanding on that date, the application is considered to be an application under                                
11 AS 43.55.028, enacted by sec. 41 of this Act.                                                                           
12    * Sec. 65. The uncodified law of the State of Alaska is amended by adding a new section to                         
13 read:                                                                                                                   
14       TRANSITION: REGULATIONS. The Department of Natural Resources and the                                              
15 Department of Revenue may proceed to adopt regulations to implement this Act. The                                       
16 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the                               
17 effective date of the law implemented by the regulation.                                                                
18    * Sec. 66. The uncodified law of the State of Alaska is amended by adding a new section to                         
19 read:                                                                                                                   
20       RETROACTIVITY OF CERTAIN PROVISIONS OF THIS ACT. (a) Section 35 of                                                
21 this Act is retroactive to July 1, 2003.                                                                                
22       (b)  Sections 26, 29, 51, 52, 54, 56, and 59 of this Act, and AS 43.55.023(l), as                                 
23 enacted in sec. 30 of this Act, are retroactive to April 1, 2006.                                                       
24       (c)  Sections 15 - 22, 31 - 34, 36 - 39, 50, 55, and 60 of this Act are retroactive to                            
25 January 1, 2007.                                                                                                        
26    * Sec. 67. The uncodified law of the State of Alaska is amended by adding a new section to                         
27 read:                                                                                                                   
28       CONTINGENT EFFECT. Section 53 of this Act takes effect only if a court of                                         
29 competent jurisdiction enters a final judgment on the merits, the final judgment is no longer                           
30 subject to appeal, and the final judgment nullifies the effect of AS 43.55.165(b), as amended                           
31 by sec. 52 of this Act.                                                                                                 
01    * Sec. 68. If sec. 53 of this Act takes effect, it takes effect on the day after the last day on                   
02 which the final judgment described in sec. 67 of this Act is no longer subject to appeal.                               
03    * Sec. 69. Except as provided in sec. 68 of this Act, this Act takes effect immediately under                      
04 AS 01.10.070(c).                                                                                                        
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