Section 43.55.028. Oil and gas tax credit fund established; cash purchases of tax credit certificates.

   (a) The oil and gas tax credit fund is established as a separate fund of the state. The purpose of the fund is to purchase transferable tax credit certificates issued under AS 43.55.023 and production tax credit certificates issued under AS 43.55.025 and to pay refunds and payments claimed under AS 43.20.046, 43.20.047, or 43.20.053.
   (b) The oil and gas tax credit fund consists of
        (1) money appropriated to the fund, including any appropriation of the percentage provided under (c) of this section of all revenue from taxes levied by AS 43.55.011 that is not required to be deposited in the constitutional budget reserve fund established in art. IX, sec. 17(a), Constitution of the State of Alaska; and
        (2) earnings on the fund.
   (c) The applicable percentage for a fiscal year under (b)(1) of this section is determined with reference to the average price or value forecast by the department for Alaska North Slope oil sold or otherwise disposed of on the United States West Coast during the fiscal year for which the appropriation of revenue from taxes levied by AS 43.55.011 is made. If that forecast is
        (1) $60 a barrel or higher, the applicable percentage is 10 percent;
        (2) less than $60 a barrel, the applicable percentage is 15 percent.
   (d) The department shall manage the fund.
   (e) [See delayed amendment note]. =ro The department, on the written application of a person to whom a transferable tax credit certificate has been issued under AS 43.55.023(d) or former AS 43.55.023(m) or to whom a production tax credit certificate has been issued under AS 43.55.025(f), may use available money in the oil and gas tax credit fund to purchase, in whole or in part, the certificate. The department may not purchase a total of more than $70,000,000 in tax credit certificates from a person in a calendar year. Before purchasing a certificate or part of a certificate, the department shall find that
        (1) the calendar year of the purchase is not earlier than the first calendar year for which the credit shown on the certificate would otherwise be allowed to be applied against a tax;
        (2) the application is not the result of the division of a single entity into multiple entities that would reasonably be expected to apply as a single entity if the $70,000,000 limitation in this subsection did not exist;
        (3) the applicant's total tax liability under AS 43.55.011(e), after application of all available tax credits, for the calendar year in which the application is made is zero;
        (4) the applicant's average daily production of oil and gas taxable under AS 43.55.011(e) during the calendar year preceding the calendar year in which the application is made was not more than 50,000 BTU equivalent barrels; and
        (5) the purchase is consistent with this section and regulations adopted under this section.
   (f) Money in the fund remaining at the end of a fiscal year does not lapse and remains available for expenditure in successive fiscal years.
   (g) [See delayed amendment note]. =ro The department shall adopt regulations to carry out the purposes of this section, including standards and procedures to allocate available money among applications for purchases under this chapter and claims for refunds and payments under AS 43.20.046, 43.20.047, or 43.20.053 when the total amount of the applications for purchase and claims for refund exceed the amount of available money in the fund. The regulations adopted by the department
        (1) may not, when allocating available money in the fund under this section, distinguish an application for the purchase of a credit certificate issued under former AS 43.55.023(m) or a claim for a refund or payment under AS 43.20.046, 43.20.047, or 43.20.053;
        (2) must, when allocating available money in the fund under this section, grant a preference, between two applicants, to the applicant with a higher percentage of resident workers in the applicant's workforce, including workers employed by the applicant's direct contractors, in the state in the previous calendar year; in this paragraph, "resident worker" has the meaning given in AS 43.40.092(b);
        (3) must provide for the purchase of the amount equal to the first 50 percent of the credit repurchase limit for each person under (e) of this section at a rate of 100 percent of the value of the certificate or portion of the certificate requested to be purchased and the amount equal to the next 50 percent of the credit repurchase limit for each person under (e) of this section at a rate of 75 percent of the value of the certificate or portion of the certificate requested to be purchased.
   (h) Nothing in this section creates a dedicated fund.
   (i) In this section, "qualified capital expenditure" has the meaning given in AS 43.55.023.
   (j) [Effective January 1, 2017]. =ro If an applicant or claimant has an outstanding liability to the state directly related to the applicant's or claimant's oil or gas exploration, development, or production and the department has not previously reduced the amount paid to that applicant or claimant for a certificate or refund because of that outstanding liability, the department may purchase only that portion of a certificate or pay only that portion of a refund that exceeds the outstanding liability. After notifying the applicant or claimant, the department may apply the amount by which the department reduced its purchase of a certificate or payment for a refund because of an outstanding liability to satisfy the outstanding liability. Satisfaction of an outstanding liability under this subsection does not affect the applicant's ability to contest that liability. The department may enter into contracts or agreements with another department to which the outstanding liability is owed. In this subsection, "outstanding liability" means an amount of tax, interest, penalty, fee, rental, royalty, or other charge for which the state has issued a demand for payment that has not been paid when due and, if contested, has not been finally resolved against the state.

Authorities

43.05.230;43.20.046;43.20.047;43.20.053;43.55.023;43.55.029

Notes

Recent Bills that will modify this

HB 247 TAX;CREDITS;INTEREST;REFUNDS;O & G
HB 326 OIL & GAS PRODUCTION TAX AND CREDITS
HB5005 TAX;CREDITS;PMTS;INTEREST;LEASE;O & G
SB 130 TAX;CREDITS;INTEREST;REFUNDS;O & G
SB 186 REPEAL OF REFINERY TAX CREDIT
SB5005 TAX;CREDITS;PMTS;INTEREST;LEASE;O & G

Implemented As

15 AAC 55.325
15 AAC 55.850

References

15 AAC 55.325
15 AAC 55.850
AS 43.05.230 Disclosure of tax returns and reports.
AS 43.20.046 Gas storage facility tax credit.
AS 43.20.047 Liquefied natural gas storage facility tax credit.
AS 43.20.053 Qualified in-state oil refinery infrastructure expenditures tax credit.
AS 43.55.023 Tax credits for certain losses and expenditures.
AS 43.55.029 Assignment of tax credit certificate.

History

(Sec. 46 ch 1 SSSLA 2007; am Sec. 12 ch 15 SLA 2010; am Sec. 18 - 20 ch 16 SLA 2010; am Sec. 16, 17 ch 51 SLA 2012; am Sec. 25, 26 ch 10 SLA 2013; am Sec. 4, 5 ch 108 SLA 2014; am Sec. 23 - 25 ch 4 4SSLA 2016)